I am sure I could rattle off a myriad of problems at newspapers - changing lifestyles, the explosion of free content over the Internet, competition from cable TV, etc. Built into these trends are some structural problems that newspapers probably cannot overcome. At some point, there comes a time of survival when you have to stop fighting trends and start figuring out how to make money in the new regime.
Here is one thing I can say with certainty: Every single newspaper in this country, with the possible exceptions of the WSJ and USAToday, but including the NY Times, are under-scale.
How do I know? Just listen to the situation. If they cut costs, they fear the quality of the product will fall and they will lose readership. But the readership is already not covering costs and is in fact already falling. This is a classic death-spiral of an under-scale entity. It almost does not matter what caused the company to suddenly be under-scale when it previously was fairing OK -- technology change, new competition, shifts in customer expectations in habits, or all of the above.
There is no tweaking one can do in an underscale business. One either needs to get much bigger, or find a defensible niche. The latter is hard in the newspaper business, since these publications have essentially focused on just one metropolitan area or city, its hard to find a tighter niche that both has a customer following and would allow massive cost cutting. Community newspapers are one example. The only forward-looking idea I can come up with is a metropolitan sports-only daily. Could such a thing sell in New York? Possibly -- one can argue that is what the Dallas Morning News is, a sports daily with some news sections attached.
This scale problem should not be a particularly surprising finding. The local newspaper business has always known it had a scale problem. With thousands of newspapers across the country all reporting many of the same stories, there has always been a huge issue of duplication of effort. Newspapers took a swipe at this problem with the formation of the Associated Press, which effectively acts as a shared reporting resource.
But it has been decades since this model has even been tweaked. In that time, sophisticated new readers expect more than just bland 5-paragraph AP stories, and newspapers who rely on such content find most of their stories online for free, if not in their own paper, then in others. And most large papers have been progressively tempted, for a variety of reasons, to have their own writers on national stories. Ever seen the press pool for a Superbowl game? The staff and talent they have built that could serve a whole country is only serving one city.
Many other local distribution models are dying or dead. Local TV network affiliates were created when local re-broadcast was the only technologically feasible approach to getting TV signals to homes. They survive today only through constant lobbying which has produced must-carry rules on cable and TV operators, or most of us would be just fine getting the network feed without local content (after all, how many folks watch CNN and FOX and MSNBC?). Local auto distributorships and beverage wholesalers similarly fight rear-guard actions in the legislature against new national channels.
I think the time has come for publications like the NY Times to give up its city-centric model and go to full-bore national distribution. My Arizona Republic has 4-5 standard sections plus an additional section (e.g. "Scottsdale") customized to my neighborhood. I don't see why such a model would not work nationally (the WSJ does something a bit similar but it is only customized regionally). I would love a Washington Post delivered here that had an Arizona/Phoenix section and possibly a local sports section.
I can hear the cries now - but what about competition? We will see thousands of newspapers collapse to 7 or 8 national brands. But this is a false view of competition here. Right now I have one newspaper choice. Even having two or three national offerings with an Arizona section would increase my choice substantially.