Although the article focuses is on the USA, the principles in play are just as relevant to the UK, where the co-ordinated cry of magazine publishers is "show us the money". But thinking about how to make online or digital publishing pay – in and of itself – is very unlikely to reach a worthwhile conclusion, and here's a quote from Fallows that shows why:
One Google employee who asked not to be named mentioned another report on journalism’s future and pointed out a section called “Focus on the User.” “They just mean, ‘Get money out of the user,’” he said. “Nowhere do they talk about how to create something people actually want to read and engage with and use.”Read, engage with and use – these are the keystones of successful magazine publishing. If you published that as a formula for success in print it would be ridiculed as a statement of the bleedin' obvious.
So why panic about doing it outside of print?
Full text (over several pages): http://www.theatlantic.com/magazine/archive/2010/04/how-to-save-the-news/8095/1/