Newspapers: On The Digital Ropes

Newspapers are in trouble, and things keep getting worse. With circulation dropping and currently at the same level as 1946 (!), papers sold per capita are at a fraction of former levels. The death spiral could become fairly dramatic since newspapers have a lot of fixed costs and many are already losing money. Unlike internet enterprises, papers cannot easily scale back expenses as advertising revenues flow online. This will likely lead to continued consolidation of local papers and probably will become a death knell for many others.

Newsosaur has a nice summary post and Henry Blodget at Silicon Alley Insider has a good mini-analysis of the potential advertising revenue shakeout.