David Carr of the NYT provided an interesting suggestion, that perhaps news can be sold the way music is sold--to an iPod-like device.
Rich Gordon of Poynter begs to differ and highlights one very important point: Unlike music, news stories don't get replayed.
Says Gordon: "Even if you imagine a future in which the Kindle (or some superior electronic reading device) is as ubiquitous and easy to use as the iPod/iTunes package, there's one critical reason to think people won't pay for news content like they do for music: When people discover a song they like, they want to hear it over and over again. This was the principle that drove AM radio decades ago, and it drives iTunes today. As much as I love great journalism, it's awfully rare that I want to read any article more than once."
I totally agree with Gordon. The future of the news industry lies with the free model. You can't fight consumer expectation, which is that news should be free. That has already been burned into the consumer psyche.
What you can do is to try to monetize the traffic. Online advertising is but one way. Creative sponsorship is something that can really pay for a lot of news content. Then, there is e-commerce. If you have a lot of traffic, you can tap on that traffic and offer them stuff to buy online.
The business model possibilities are great but first of all, you need massive traffic to make them viable. And the only way to get such huge traffic is to give your news away for free.