Justin Fox is right to take issue with David Lazarus' argument that newspapers "give away the store online" by allowing people to read their work for free:
News was already pretty close to free long before the Internet came along. It was free on TV, free on the radio, and effectively free in newspapers when you consider all the valuable stuff that came packaged with it for 25 or 50 cents, from comics to crosswords to classifieds to supermarket ads.
You can actually take this a step further. The money that people fork over for print newspapers isn't some premium for the value of the content inside. It's money that goes to covering the cost and distribution of the actual paper. (See Kinsley on this point, for instance.) So the notion that you would pay nothing for a paperless product actually isn't so crazy. Lazarus either doesn't know this or is obscuring it.
The crux of the issue is (and has been) about advertising revenue. First, despite huge and ever-increasing traffic, papers have not been able to charge rates for online ads equivalent to those they charge for print ads. The question for papers is how to close this gap -- how to convince advertisers that they're not paying enough or, more likely, how to make web advertising more appealing to consumers and thus advertisers. (Incidentally, my suspicion has been that papers are getting somewhat screwed by all of the information that can be generated for online ads: Advertisers can measure click-through rates, while measuring the efficacy of a print ad is quite a bit trickier. The conventional operating assumption seems to be that paper ads are more appealing to readers, but I've never had a problem ignoring them.) Second, papers are losing many of their advertisers, whether in print or online, because people who in the past would've run ads in classifieds sections can now just use Craigslist and other websites for free.
In any event, this is where I would focus my attention -- not on trying to convince people to pay because the product is so great, because they've been conditioned not to believe that. That may be unfortunate -- for all of their failings, newspapers are still pretty great things -- but that's the reality and it's not likely to change. In the meantime, perhaps papers like the LA Times can focus on making sure that their business writers demonstrate some meaningful knowledge of their subjects and can write about them with a decent amount of clarity.
