The really good news for newspapers is that Print on Paper is the best way to search for information in the physical world. Since everyone lives in the physical world, with only brief excursions into hyper space, that means we can bring real value to networking with Google.
Try this: Think of your "newspaper" as a search platform in the physical world supported by advertising. Sound familiar? As in "Google is a search platform in the Cloud supported by advertising."
Face the fact that most newspapers are ad machines. They aggregate eyeballs and sell them to people who think they need eyeballs. That's how they made money. Journalists bemoan the fact. But it was the excess revenue by being the best ad machine for a long time that supported their reporting. It puts into a clearer perspective all the hand wringing about the "end of journalism and the threat to democratic government" and blablabla.
Meanwhile, it was alot easier to be an ad machine when there was no reliable way to accurately measure the number of eyeballs. Measured clicks, instead of eyeballs, easily flow into spreadsheets. Business people love spreadsheets. Turns out, however, that filling spreadsheets is not the same as selling stuff. Business people don't want to advertise. They want to sell stuff.
Some still believe newspapers can attract more eyeballs by "breaking news" or "great reporting". But in a Google Mart economy, while the value of information high, the correct price point is either free, or very close to free.
Consider the New Yorker magazine.
They are in the enviable position of having an audience of readers. When you Google "New Yorker", this comes up on the search page:
Online version of the weekly magazine, with current articles, cartoons, blogs, audio, video, slide shows, an archive of articles and abstracts back to 1925.The customer gets all that for free. There are are very few outside ads on the website. All the ads are in the right hand sidebar. Away from the stories. Easily ignored. In the Print version there are full page ads. But most of the ads are also in the sidebars. (remind you of Google Ad Sense?)
So the way to make money is by selling stuff to fans. If you can identify the reading fans, it's pretty easy. Here's a cut and paste of ads from one page at the New Yorker's website.
Or take a look at the Guardian Book Shop in the UK.
Lots of stuff for sale.
But "my readers don't read. How can I copy this successful model?
My bet is that about 5% of the population reads, either for enjoyment or as the best way to learn something about the world. Except for the short lived Tina Brown era (error?), The New Yorker stays focused on readers. They have earned a national, and probably now an international, audience of English speaking readers.
In every locality, probably around 5% of viewers are readers. If you are part of a chain that's not an insignificant niche market. In any case, where ever you find them, it's a growth market. Given the new emphasis on Smart by President Obama, et al. it may turn into an explosive market.
Many of you have under used Print capacity. If not, it's easy and inexpensive enough to network with a commercial printer in your area. Plus you have the long tail of content production. Plus you have at least a couple of really great editors and journalists/writers.
So make stuff readers will willingly buy. Start with books. Who knows? Every once in a while you may produce a book that goes mainstream and brings in tons of money. Don't forget that President Obama hit a homerun with a book. It accounts for most of his personal wealth. It could happen to you.
Don't split the revenue with a "publisher" who has a "distribution channel." You have a web site that identifies potential customers more efficiently than almost any "publisher." You can take orders, then print the book and deliver it to customers in the time it takes for the "publishers" with "channels" to push books out, many of which will be returned in 3 months later. No returns. Minimal distribution costs. Maybe make a deal with some independent bookstores. They have the closest contact with reading fans. Not a bad business.
While you're getting that to go mainstream, keep the ad machine running with local ads. Sell web and print ads as one package. Call it "multi media marketing services" for small local business". (The Chamber of Commerce will love it.). If you network with a local Printer, you can also sell them brochures and signs and pencils with their names on them.
Meanwhile take the chump change you get from clicks on the web. But harvest the information you're getting from the web to identify new tribes of fans. Then keep inventing new stuff to sell to your fans. If they don't read, sell them t-shirts or flowers or concert tickets.
Hint: You might want to get in touch with the best design talent you can get to. They specialize in inventing new stuff.
If the folks who sell stuff don't need newspapers, why not get into the selling stuff business. It's a much easier way to earn a living.