Is free the price of the future for literature?

We've written before that advertising revenue could enable publishers to make fiction and poetry available for free, to those who read it electronically. Now DailyLit is testing this theory, albeit relying on sponsorship, rather than advertising. Or at least DL is sort of doing this - in the course of a virtual leaf-through of their site, I didn't spot much of anything anyone would pay for, in print or electronic form. So perhaps DL's announcement is an attention-grab, and nothing more. If that's the case, who will be the first publisher to start pushing premium content in this way?