Editor and Publisher picked up on the issue last month, but ironically put the story behind a pay wall — it’s broken free of its chains and is available here.
Jennifer Saba did a good job of covering various angles related to the free vs. paid debate.
Recently, I came across some data — which I can’t find now (wish I’d used del.icio.us like I should have) — that showed how US papers have failed to raise circulation prices, as compared to many European newspaper companies, which both charge more for papers and have higher household penetration rates. The data suggests that actually, people will pay for content. However, it also suggests that newspapers let that genie out of the bottle long before the Web came along. By not adjusting subscription fees to keep pace with inflation, newspapers have educated that audience that its content is not all that valuable.
If anybody can help me find that data again, that would be lovely.
But even so, we’re still only talking about print subscription fees. There is still no evidence, either in the US or elsewhere, that people will pay for general news content online.