R. told me about this a weekish ago when the news was fresh. Newsday, a New York newspaper you probably don't read, lost a bunch of money last year and decided it was time to start charging their online readers. Three months ago, they rolled it out. R.'s summary was that 35 people subscribed. To be fair, a Whole Lot of People get free subscriptions (like, anyone with a paper subscription or cable service in the area); nevertheless, traffic to the website has taken a substantial hit and one can only imagine that in addition to not paying enough to cover the cost of making the website subscriber only, the paying subscribers are also not paying enough to cover the loss in advertising revenue which will materialize if it has not already.
I am in no way suggesting that Newsday should not have done this. I'm not much of a believer in "information wants to be free", altho I do believe that people often will take free things that they wouldn't even pay a penny for. A penny that someone handed them to give back to "pay" for it. I actually don't think there's a good way out of the hole that newspapers are in.
I will further note that while I still cannot bring myself to subscribe to the New York Times, either online, on a kindle, or on paper, if Gail Collins were to make it so that I had to pay someone something for me to read her column, whoever was collecting could probably stick me for up to $10/week for the privilege of reading the two columns and, when I felt like it, the one she does with what's-his-name. There are bloggers out there who charge for the privilege of reading them, and while I haven't stepped up to pay for any of that, either, if Calculated Risk and/or Nate Silver decided to stick it to their readers, I'd probably pony up a similar amount to them, possibly more, because they produce a larger quantity of stuff I like to read about. In other words, I'd pay $30/week, or a little over $1500/year for the privilege of reading the output of three-five people. There are hypothetical online newspapers that could make a bundle by, er, bundling popular bloggers and columnists.
When I was in college, there were a number of people in my degree program got quite heated about how the world needed a good online micropayments scheme. Had such a thing come to pass (which it very much did not, and if you say PayPal, I will laugh at you), that might have created some space between free and detectable amounts of cash -- that step is nearly insuperable right now.
In any event, while it is clear that the troubled content providers (aka newspapers and their relations, magazines) are hoping that the kindle and/or iPad might provide some assistance, that stream seems awful small right now to attempt to factor into any analysis of the future of e-readers.
Apparently this is what comes of giving it away for free.