Everywhere you look, newspapers are in trouble. For one example a study from last fall showed that every major US paper was shrinking readership except WSJ and USA Today. There is a neverending series of disturbing stories about the financial viability of newspapers. Yet newspapers in general have some valuable content, it just gets created, distributed, and monetized differently now, and the industry has obviously failed to adapt.
It reminds me a lot of legacy architectures. Newspapers have a lot of fixed expenses due to legacy concerns, but times are changing - you need reporters everywhere, but if there were nobody paying Tom Friedman's room service all those years, then we don't get "Lexus and the Olive Tree."
Obviously they are adding some value despite their lack of agility. There are parallels I think with airlines, which have been huge destroyers of investor capital for decades. Warren Buffett famously said that while airlines have greatly improved human's quality of life that any real capitalist would have shot down Wilbur and Orville at Kittyhawk.
Interestingly, some airlines do run effective businesses, low cost operators and those focused on specific routes, as well as Buffett's own Netjets. Similarly, highly focused newspapers are probably here to stay. The question is if the rest of the herd will figure out how to create value and have an effective (read- profitable) distribution model. Newspapers still have a lot of content (which is an infrastructure component in the information age), but no idea how to efficiently and profitably distribute it.