Alan Murray, executive editor of The Wall Street Journal Online, doesn’t believe the canard that only financial news outlets can charge for content on the Internet. He concedes that the Journal has a built-in advantage — its audience reads the newspaper for business and profit — but in an interview this weekend, Murray told me, “The truth of the matter is there are tons of people out there paying large amounts of money, billions of dollars, to buy information every day.”

Check out the the first set of highlights from our conversation in the video above. (There’ll be a few more.) I’ve also sussed out five pieces of advice that Murray had for news organizations considering some sort of pay wall:

1. The best model is a mix of paid and free content. “It’s not pay wall/no pay wall,” Murray told me. The Journal allows free access to all of its political, arts, and opinion coverage, in addition to certain breaking news stories and all of its blogs. But the rest of the site requires a subscription.

2. You can’t charge for exclusives that will just be repeated elsewhere. This was my favorite lesson from Murray, who explained, “If it’s a big news story, if we report a takeover and — we could hold that behind the pay wall, but if we do, BusinessWeek or someone else will simply write a story saying ‘The Wall Street Journal is reporting x,’ and they’ll get all the traffic. Why would we do that?” So they drop the pay wall, “and take the traffic ourselves, thank you very much,” Murray said.

3. Don’t charge for the most popular content on your site. “That’s the been the mistake that some people have made in the past,” Murray said. Items with broad appeal are better used to build traffic that can be turned into advertising revenue.

4. Content behind a pay wall should appeal to niches. It may be easier to identify those opportunities with financial news, but Murray suggested, for instance, that a local newspaper could consider charging for coverage of high school sports. “To the people who want to read it,” he said, “they really want to read it because maybe their kids are involved. Maybe they’re willing to pay for that or maybe there’s a photography service that’s connected to that where you can download pictures of your kids or of the game. But only if you’re a subscriber.”

5. The narrower the niche, perhaps the better. This was the bit of news in our interview: The Journal is planning what Murray called a “premium initiative” to sell “narrower information services” at a higher subscription rate to subsets of its readership. He was coy about what services will be offered but mentioned, as examples, energy coverage and some sort of news service for chief financial officers. (According to someone else I know at the Journal, those are, in fact, likely to be among the first offerings of this tiered-premium service.)

One item that I cut from the video but might be of note: Murray said that, despite frequent claims otherwise, less than 30 percent of the Journal’s online subscribers expense their subscriptions or take a tax write-off for them. I also asked Murray about the Financial Times, which allows free access to 20 articles before kicking in a pay wall. “I have to confess, I don’t really understand it,” Murray said. “It’s very confusing to me. You get some and then all of a sudden you start paying.”

Finally, I should note that while I met Murray for the first time this weekend, I worked in the Journal’s Boston bureau for a year in 2006 and 2007.

Here’s a full transcript of the above video:

Alan Murray: What’s happened in the last year and a half or two years is that we’ve discovered this is not a binary issue. It’s not pay wall/no pay wall. We’ve put more and more of our content outside of the pay wall. You can get all our political coverage, all our opinion coverage, all our arts and leisure coverage — free, available to anybody. A lot of big news stories, even business news stories, the coverage is available free because we know that if we don’t put it out there, you’ll just go to somebody else. […]

Look, if it’s a big news story, if we report a takeover and — we could hold that behind the pay wall. But if we do, BusinessWeek or someone else will simply write a story saying “The Wall Street Journal is reporting x,” and they’ll get all the traffic. Why would we do that? So if it’s that kind of a big, broad-interest news story, we’ll put it outside the pay wall and go ahead and take the traffic ourselves, thank you very much. […]

The Google News arrangement was an experiment. We thought, you know, let’s let people who are looking for a story come in and read one story, any one story. Seems to have worked pretty well. You know, when people go to Google News, they’re not, by and large, people who have a relationship with The Wall Street Journal. They’re just looking for the best story on a subject. If we happen to have that story, we let them read it. But if they like it enough that they want to have a relationship with us, if they care about our business and financial coverage, eventually they’ll have to subscribe. […]

So, in a sense, we’re having our cake and eating it, too — by making those clear distinctions between what’s going to be most broadly popular, what’s most likely to attract traffic on the wider web, but keeping in mind what the core value proposition is that we offer to subscribers who come to us for business and financial news they can’t get anywhere else. […]

The key is not to take your most popular stuff and put it behind a pay wall. That’s the been the mistake that some people have made in the past. You know, this is the story that most people want to read; therefore, that’s the one we’re gonna make them pay for. That’s not the right answer. The broad, popular stuff is the stuff you want out in the free world because that drives traffic, that builds up your traffic, and you can, of course, serve advertising to that audience.

I think what you have to think about is sort of narrower groups of interest where the interest might be deeper and more intense and therefore might make people willing to pay for it. I had this conversation with one newspaper editor where I said, look, what’s your equivalent of our business readers — a group of people who really need to read you because there’s something they desperately care about? And one of those editors said to me, it’s really local sports. You know, it’s the high school football game or the high school basketball game. Not necessarily of interest to all the paper’s readers — but to the people who want to read it, they really want to read it because maybe their kids are involved. Maybe they’re willing to pay for that. Or maybe there’s a photography service that’s connected to that where you can download pictures of your kids or of the game. But only if you’re a subscriber. That’s just one example, but I think that’s the kind of thing.

Look, the truth of the matter is there are tons of people out there paying large amounts of money, billions of dollars, to buy information every day. […] I mean, there were a couple of guys in Texas who started the ultimate news service on the oil business with oil rig counts and all that. They sell it. They’re driving around in Mercedes. Well, why didn’t The Houston Chronicle do that? Why did that have to be some outsider? So the question is to find the information that has an enormous value to not necessarily a big group of people — maybe it’s a small group of people — but enough value that they’re willing to pay for it. And I think those opportunities are out there for lots of newspapers. […]

We’re working on a premium initiative to launch a series of, as you say, niche or narrower information services that we can sell at a premium to smaller groups of subscribers on subjects that they care most about.

Question: What sort of subjects?

Murray: Oh, I mean, there are potentially thousands of them. Energy might be an example. Obviously a lot of our readers are deeply interested in financial subjects. Perhaps some sort of a news service for chief financial officers. There are a lot of ideas that are on the table. We’ve started prioritizing them — got a few that will probably come out first. But I’m not going to break that news on your video.