So what could Engadget do so that it doesn't have to resort to advertising as the only model for revenue? Well, how about providing additional features for paying subscribers? Paying subscribers could get feeds with additional analysis, tips, comments, or whatever. Including high quality images or extra images related to the story is another option. Paying subscribers could be allowed to update their feeds as often as every 5 minutes, or have access to feeds that don't have news items that are slightly time delayed. The list goes on and on.
By the way, I'm still working on a scheme so that I can figure out a way to make money off of Engadget / Weblogs Inc. every time I refer to them. That's free publicity for them, and I'll be damned if I can't squeeze everyone under the sun for some money. Going Nowhere: RSS Advertisements
I tend to agree with these comments. Having advertising as your only way to support yourself isn't that great of a business model. As mentioned in the examples above, giving paying subscribers value adds just seems so much better than "we'll just slap some advertising in the RSS feeds". Of course, this all depends on you having good content to begin with.
Ed Brill writes about advertising in the eWeek RSS feeds:
Should the RSS feed itself be viewed as a way to generate revenue, or the content on the pages that the RSS entry leads to? Because if the signal to noise ratio drops, RSS is going to be a whole lot less interesting.
People like Robert Scoble insist on full-text feeds, and I tend to prefer these as well (I paid for Daring Fireball in part so that I could get access to full-text feeds). Again, I would prefer to pay for good content (high signal to noise) rather than have it "polluted" by ads.