"Undeniably, there is money to be made in digital publishing with free reader access, but whether that revenue leads to profits depends upon the scale and scope of the organization. The potential revenue does not appear to be of the magnitude that will support the massive operations of existing news organizations. What works in today’s web landscape are lean and mean organizations with little or no management bureaucracy — operations where nearly every employee is working on producing actual content."
John Gruber hits it out of the park in his article Charging for Access to News Sites.
This seems to be the crucial factor separating the news sites making money from the news sites hemorrhaging money. As Gruber points out, the old media dinosaurs who refuse to see the light about online profitability are precisely those whose jobs are all about management, and not about content.
