When creating a website is it better to charge a subscription or make it free and charge for advertising?

Depends on if they can get similar content elsewhere. If check http://www.drudgereport.com every day for news, but if they started charging I would just go to other news sites. On the other hand I pay for a subscription to Ad Age because they have content on there I have a hard time finding anywhere else. And for stuff like videos and music you will find some people who are willing to pay for it to be ad free and other who are willing to endure ads to keep it free. Think Spotify and Pandora and iTunes Radio.

The typical revenue from an ad is $1 per 1,000 impressions. So let's say your site has one ad on it. That would mean you'd need 5 million visits in a month to generate $5,000. 2.5 million visits if you have two ads. 1.25 million visits if you have four ads. If your website caters to a specific niche, you can command a higher price. So let's say $10 per 1,000 impressions. If you had four ads on the site, that means you'd need about 125,000 visits per month to generate $5,000 per month. If you want to make a lot of money through advertising on your site, you need to provide a strong reason why someone should buy your ad, and not any other site with a lot of traffic. The easiest way to do this is to fit some sort of niche. For example: if I'm an advertiser selling vegan dogfood, I'd be willing to pay a lot more per-impression to advertise on a website catering to vegan pet owners. So catering to a niche not only means people will buy ads period, but also that advertisers were pay more for those ads. To increase the profit-per-view, you may want to consider affiliate marketing.