Paul Graham, has an interesting essay on Post Medium Publishing. The general gist of is that publishers have never really been in the "content business." They have been in the business of selling paper (the embodiment of the content). Digital publishing, with its ease of replication, devalues paper as the embodiment of content and exposes the weakness of a pure content business. Publishers can either give content away and look for ad revenues or they can come up with some new embodiment that is both desirable and defensible. Personally, I think that publishers are in the audience business. They command an audience that advertisers are willing to reach. But the audience business has become more difficult with the increased competition from all sorts of information sources. Many people, like Graham, are looking for that new embodiment or channel that will bring back the exclusive audience attention that was so profitable back in the golden years of publishing.
Graham also invalidates some of the successful content market examples publishers are looking to emulate. For example, Graham says that iTunes (held as the gold standard for a successful content business) is not really a content store. Rather, it is a "toll-booth" that charges people to access the most direct path to their listening devices. Apple controls the path, it gets to charge a fee. If you don't control the device or the channel, you are back in the unprofitable content business. It appears that Time, Inc. has a strategy here but who knows if they will be able to create that market.