How much will people pay for news?

Don't click this if you've already reached your 20-article limit for the month:

The Times Announced Digital Subscription Plan

Basically, the Times is shifting to a paid subscription plan.  You can access 20 articles on their website for free each month, not counting what you find via search engines and links on social networking sites such as Facebook.  However, if you search via Google, you will be limited to 5 articles per day.

This is an interesting concept, because it comes at a time when publishers are also trying to figure out how much people are willing to pay for ebooks.  I think the Times is doing the right thing by ensuring that people can still access their articles for free via search engines and social networking — can you imagine the frustration if you are researching something, and come across an article that you can't see unless you pay for a subscription?  (Okay, there are some sites that do that, and it's really annoying — but they aren't major news outlets, so I don't think most people run into that very often.)  Or if someone you know links to an article on Facebook, and you can't view it because you're not a subscriber?

I have very mixed feelings about this.  On one hand, I agree that a newspaper should be able to put a value on their work and charge some money for online subscriptions.  A lot of people read the news online now, and I'm sure it cuts into subscriptions for the physical paper.  But at the same time, I'm not sure if people will be willing to pay $195 a year (for the cheap plan) when they can just go to a different news site and get basically the same information there.  The mobile app is a good idea and may actually provide enough incentive for people to pay the fee, but again, I think the price is a little steep.

Of course, depending on how the NYT fares with their digital subscription plan, other news sites may follow suit — and then you may not be able to just go to another site in order to read the news.  This scares me a little, because I think it will seriously handicap the Internet if people can no longer access authentic articles online.  The deluge of crappy content is already a serious problem — what will happen if that becomes the only thing that users have free access to online?

What are your thoughts?  Do you think the NYT's move balances the value of writing with the ideal of the Internet as a source of "free" (or at least readily available) information?