A reader keeps the discussion going:
I think the piece you're missing from the equation are the advertisers themselves. For years they've counted on the interruptive model. And the advent of digital showed everyone how bogus those circulation numbers were. And quantitative metrics on engagement with display have shown how useless those units are.
But who says traditional media companies have to be the only ones publishing content? There's a nascent brand journalism industry forming, with varying levels of sophistication and commercial intent. A lot of it is just brand and audience building. Bring in as many people as possible with content they would find entertaining elsewhere, but you don't have to serve them any ads. Because the brand OWNS the page. (See: theadrenalist.com and Unilever, tablespoon.com and General Mills)
We're still a long ways off from the quality of content a normal publisher can achieve – but how far out are we? A brand has the money to pay writers, and they're not beholden to pageview models for revenue. Now, brands of course can't be responsible for public service journalism, but they might be able to underwrite non-profits to cover government and industry. Or maybe not.