I wrote about this a li'l bit on my personal blog last week:
http://metroidpolitan.com/blog/2013/3/5/for-the-love-of-the-gamePublications have two ways to get money that I can see:
1. Subscribers
You can also choose, within this model, to reward people for subscribing. Some ways include: free merch (t-shirts, tote bags, etc), the privilege of being allowed to comment on the site, access to the content at all, or access to more content. Obviously this means if a reader can't afford to subscribe to the magazine, then they don't get to read it, so the publisher have an accessibility problem for people who can't afford them and has to decide whether those people matter more than the ability to pay their writers ... who need to eat.
I see this model as similar to the "old school" model of patrons paying artists to work. Several rich people fund a magazine and then, hopefully, "everyone" gets to reap the benefits of the product. ... Unless only subscribers get to see the product. (In case you couldn't tell, I'm not thrilled about that model. I always want everybody to be able to have access to everything. And yet I also believe writers deserve money. I know, I know.)
2. Advertisements.
The problems with this model have been laid out pretty well by previous comments (Gameranx's dissonant ads, the appearance of games websites being biased by their game-related ads, et al).
I think one solution to this is to find advertisements that have nothing to do with games but that still might appeal to gamers: ads for couches, for TVs, for computer parts, for cables, for internet providers, and so on and so forth. Advertising video games on a game review site seems like a terrible idea to me, and yet, so many websites continue to do it.
But, even getting better advertisers (if you CAN -- a lot of companies have cut back on their marketing budgets b/c of the recession, meaning it's harder to find advertisers now than ever before) does not guarantee that your audience will click on the ads. They might be using an ad blocker, or they might not be but just aren't interested in your ads.
Publications complain about ad blockers A LOT, but that's not the real problem either. The real problem is people hate internet ads far, far more than they ever hated ads in print publications. For some reason, having a pop-up ad, or an ad that "interrupts" our online
content (like a bar across the screen in the middle of a piece, say) annoys us more than flipping a magazine page and seeing an ad and then flipping the page over again and seeing more content. No one has yet figured out a good way to put ads online, ads that people will like and click on, ads that won't actively bother people.
I don't think this problem is unsolvable, no one has solved it yet. I'm glad to hear Five out of Ten is doing well with its subscriber model, though (see: other thread about Five out of Ten where someone asked Alan about that). That subscriber system worked pretty well for Kill Screen,
at first, before Kill Screen changed its model. I don't know WHY Kill Screen changed its model, though. Wish I could have sat in on a couple of those meetings.
I'm mostly biased towards a subscriber model because I know about the inefficacy of internet ads. But the subscriber model assumes that people have money in the first place (they don't, especially right now), AND that they're willing to spend that money on content that they have been socialized to believe should be free (the advent of the internet has devalued journalism in a way that it was not devalued, say, 20 years ago when people happily paid to subscribe to a print newspaper). So there are both economic and cultural problems right now, surrounding the "value" of writers and writing.