This will be only marginally successful, if that. Most people are simply not interested in paying $50/year for general news that you can find for free on the Internet. Paywalls have only worked in a handful of cases, and only then when the content is not generally available - with the best examples being the wsj (for their good financial stuff) and consumer reports.
While the iPad's success had demonstrated a market for a new type of computing device, I don't think it has demonstrated that these people are any more willing to pay for news content than anyone else is.
So, news is free? Interesting assertion.
I think you're missing the point here. The end game isn't getting people to subscribe to this particular source. The end game is developing a model that works for the entire periodical publishing industry. All you have to do is look at the state of magazine distribution in the digital realm to see that the industry is at sea right now. They're searching for a way to make it work. This may be it.