When we look at the MSM we see that readers do not pay most of the bills; advertisers do. If blog revenue is going to increase, the same will be true on that medium.
The indispensable innovator is the advertising genius who will make internet advertising a serious competitor for print, TV, and radio. Once that happens, ad money will flow to the audience bloggers attract.
But right now, blog ads and pop-ups just don't fit the needs for most big advertisers. This is reflected in the numbers discussed here.
In 2004 Internet advertising was only $9.6B in a total domestic advertising market of $257B.
(HT: Carnival of the Capitalists)