According to Engadget, you won't save that much money by reading magazines or newspapers on the iPad: The Wall Street Journal will cost $17.99 for a monthly iPad subscription (which is 11 dollars less than a paper subscription,) and, while Esquire looks like it'll be cheaper, many other magazines are going to be the same price as the newsstand edition.
Sources told the WSJ that the April issue of Hearst's Esquire magazine (no stranger to new media) will arrive in downloadable format without advertisements for $2.99, $2 less than the newsstand price, and will include five music videos (each containing the phrase "somewhere in Mississippi," oddly enough) to take advantage of the device's multimedia capabilities. On the other hand, a full iPad issue of Men's Health with match the glossy's $4.99 price.
First of all: Why would a magazine sell an ad-less edition? Part of the reason I read magazines is for the ads. I love that they're ridiculous and pure fantasy and often more current than the content in the magazine I'm reading. If you stick an ad in an e-book, I'll lose my shit. But a magazine? Ads are part of what make magazines into magazines. As long as they don't interrupt the content or force me to linger until a video finishes playing, I want them around. I say, stick the ads back in Esquire and lower the selling price by another dollar or buck fifty.
Second of all: While I'm not a believer in micropayments, I do think that if you lower your price to a certain level, more people will buy your magazine. $4.99 is obviously not that level.