"Prices keep getting driven down by competitors who offer stuff for free," Musk said. "VCs (venture capitalists) look to monetize these competing alternatives in other ways, beyond subscription." McClure made the point, that the successful approach taken by most online content providers is to start out providing a free service and ultimately introduce a unique service that's based on paid subscription.

He added that the trick is to figure out what's unique about what you're doing and charge a fee for what people would consider unique value - a sort of up-sell.

McClure estimated that a paid subscription model might stick with 10 per cent or less of your total subscriber base. Most of the panel insisted that a more reasonable target is probably closer to two per cent or three per cent of regular subscribers who could be converted to paid subscribers.

On another point, Digg operator Rose was asked whether those who contributed content should be compensated for their contributions, particularly if Digg and other online businesses make money from their work. "I hope it's not work," Rose said, explaining that Digg and other sites like his are a way for people to promote and share their passion and interests. It shouldn't be their job, he said. Rose explained he listens to the folks from whom he leverages content, and then build the tools they want and evolve the site to something that this community of contributors wants it to become. That's the value for them.

"They realize we have to make money," he said. "At the end of the day the most important thing for us is innovating in our own way and listening to where they want to take it. As long as we let them shape the future direction of the site, we'll be OK. Without the community we're nothing so we have to listen to them."

The future of monetizing online communities is all about being smart. Me.dium, for example, is building a means of tracking the online activity of users, through Internet Explorer 8. Among other things, Me.dium's service will allow users to know what are friends - and others who share similar online habits and activities - doing. Those who use the tools will be able to understand what these people do on the Web, based on an analysis of their online activity.

"People will be able to see where their friends go - and follow them," Musk said. Eventually Me.dium will be able to create a Web advertising serving engine that serves uniquely targeted advertising based on the history of what people do and an analysis of what are their activity patterns. It begged the question to the panel - What about privacy? What are the privacy implications of targeted advertising?

Robert Scoble of FastCompany.com put it bluntly.

"Privacy is dead," he said. "My 14-year-old kid just doesn't care about privacy."

Kimbal claimed he hasn't had a single negative comment on privacy, while Rose said Digg is open about what it does with information. "If we share information with advertisers," he said. "We'll be up front about it...we'll tell people and give them the means to opt out."