The difficulty that newspapers face for charging for on-line versions is that their marginal cost per incremental on-line subscriber approaches zero.
Nearly all the costs are incurred upfront, before anyone actually reads the paper on-line. The cost of "printing" one more copy is nearly zero, the cost of "delivering to the door" one more copy is nearly zero.
This means that the attempt to charge for content will always be subject to the most severe price competition. For general circulation papers, only folks who develop an economic model that doesn't rely on subscriptions will win.
Furthermore, because the on-line versions are eating into the paid hard copy subscription base, eventually, only general circulation newspapers that develop a free hard copy circulation model along with a free Internet model will really thrive in the future.
In the Washington, DC area, we've already seen the first fully subscription-free general circulation newspaper, the DC Examiner. It is entirely dependent on advertising. Circulated free to about 210,000 households, with another 50,000 copies given away through street boxes, if this paper catches on, say buh-bye to the Washington Post.
sitetest
Or the Washington Times. I love the content of the Wash. Times, but I'm mortified by it's ownership and provenance.