There are many reasons for the slow wasting away of newspapers. One that has been missed is this: Newspapers were accustomed to being the only game in town, and the market for current events has become much more segmented than their traditional model.
Oh, sure, TV came along in the 1950s and brought competition. However, at the time, TV took its news values from print. It covered stories in something approaching depth, and it had pictures to boot. Still, there were only three networks, and they were broadcasting.
Even before cable, though, entertainment values oozed in. Remember weather girls? Now all news readers have to be beautiful. No more dour serious journalists. Sports segments got longer and longer. Eventually, the hard news pieces got softer to keep up, and network executives found that they could capture a lot more eyeballs with puppies and missing persons than with the arcana of the federal budget.
Still, newspapers didn't adjust their audience expectations. True, virtually all the evening papers closed, the need for them erased by the nightly news. But the big three were broadcasting to everyone, so newspapers continued to write for everyone.
The advent of cable TV news further segmented the market. It wasn't, of course, the only force. News magazines spawned celebrity gossip-zines.
Newspapers refused to give up their long lost broad audience, but cable started narrowcasting to niche audiences. Bill O'Reilly owns the delusional, ossified, egotistical gasbag segment, despite lots of competition, but even his audience is not very large. Multiplying him a hundred times (oh, god, please, NOOO!) chips a lot of eyeballs off the front page of the Boston Globe. Chris Matthews takes the blithering sexists with poor impulse control. Jon Stewart takes the kids who grew up with TV and already know it's all bullshit. Keith Olbermann wins people who want to giant slalom between news and punch lines, while Stewart is in a quick slalom.
Newspapers kept trying to be everything to everyone, and no matter how many soft features they add or news you can use they deliver about how to get your Christmas tree out the door without scratching the paint, they're still bleeding readers. They're even bleeding guys like me, and the reason is that they're in a niche market, too, but they haven't dealt with that yet.
Meanwhile, the core audience for newspapers, people like me who want deeper coverage of the news, even when there's no way to get good art, are finding less and less in them to justify the gray ink all over our hands. We want to know what actually happened yesterday. We don't want reporters striving for a scoop to pretend to know what's going to happen tomorrow or next week. We want some seasoned insight about what topics touch what other topics and the benefit of the reporter's contacts, as long as the reporter vets the quotes for bullshit and bluntly puts it in context.
Instead, newspapers are taking their news values from TV, which means they value entertainment more than information. Their medium is just not well-positioned to compete in entertainment (though the web is changing that).
True, the core readers of newspapers are not 100% of adults, not even close. But we're at least a quarter of the population, and we tend to be affluent, aware, and sometimes even influential, just the perfect eyeballs to deliver to advertisers.
And the papers are screwing that up, too, alienating us by trying to hang onto what they've already lost.
