Free is such a relative term, and the relationship we have with free depends entirely on what the product or service is as well as who provides it.
Apparently free services aren't free because we pay through advertising or sponsors. Well duh. I thought all this time that those TV ad things were part of the programme, and my TV licence was really a licence.
People aren't stupid. They understand that free normally means advertising (google), or limited features (Open Office), or allowing for bias (Wikipedia). When people say things online should be free, they understand that means advertising.
When Rupert Murdoch said about charging for his services, it showed a classic lack of understanding of the online world. Free with ads means no loss to us, as soon as you have to pay for content you have something to lose if it isn't right. The only way this will work for those of us with more sense than cash is if every provider goes paid-for, but then someone will create something for free and we will all flock there. Or is it? If the brand and the content is good enough will people trust in the value inherent and accept the financial hit? After all, it is relative...
I can't wait to see.