Information may want to be free, but InterActiveCorp‘s chairman thinks we’re all going to be paying for it soon. Speaking at the second annual Advertising 2.0 conference in New York Wednesday, Barry Diller was emphatic that the free period of the Internet is coming to a close:

People will pay for content. They always have.”

The digital media chief disparages the idea that consumers
expect free content online, calling it “an accident of a historical moment that
will be corrected.”

According to Diller, we’re currently at the very earliest period of monetizing the Internet: “Right now, everyone’s at cross purposes, but that’s natural. At the beginning.” The solution, according to Diller, lies in combining the creative strengths of old media with the new formats of the online space.

For starters, he thinks many publications will start (or revert to) charging for content. “At some point, they are going to say: ‘We have no choice, we have to go behind a pay wall.'” That will of course shrink the size of audiences, but Diller doesn’t see that as a tragic flaw.

“It will happen. It is absolutely inevitable. There’s no way around it.
It’s going to happen. And some people will pay and some people won’t.”

IAC has seen revenue success in its varied portfolio of companies such
as Match, Citysearch, Vimeo, and Urbanspoon through a variety of models
that include advertising, subscription models and transactional costs.

But one thing that does not interest Diller is display advertising, which he thinks has been crippled by the standardization process. Rather than buying 200×300 boxes, he thinks advertisers want more flexibility: “We may want institutional, we may want traffic, we may want transactions… the whole range for action versus impressions is only possible in Internet form.”

As creative talent fully migrates online, Diller envisions many more “contextual
sponsorships.” And Tina Brown, who heads the IAC backed Daily Beast concurs. She tells Econsultancy that “we’ve been going a different
route. We’re pursuing a new integrated ad model. For us, it’s more
about creative advertising and getting the user excited and more
involved.”

The less than a year old Beast is still sorting out its business model, but Diller points to some other IAC owned properties to demonstrate the future of online revenue streams:

“Look at the iPhone. Thre are examples there. On Citysearch and Urbanspoon. When people come to those sites through the iPhone, we get paid. People are now getting paid for transactions.”

But will the gaming model prove successful for media companies and other content? Diller thinks so:

“What do you think a game is? A game is content.”

Image: Deadline Hollywood