As newspapers see a decline in their traditional revenue streams, they are increasingly looking online to find new income sources. But that endeavour turned out to be difficult as consumers constantly refuse to pay for news, and online advertising sales are way below their offline counterparts.
As their audience moves to the web, papers are forced to follow but didn't find a viable business model yet. Subscription models usually don't work, with the one exception of the Wall Street Journal. Some have managed to grow a self-sustaining online business, but that doesn't pay the bills for their offline editors.
Most papers face a difficult situation: Their traditional business is shrinking and layoffs are inevitable while online would require significantly higher investments to grow. For many, it might be already too late. They missed the opportunity to invest in better times and now can no longer afford to cross-subsidise their online activities.
Which essentially means they are doomed, at least in the long run.
I think we can expect some more efforts to put the content behind a pay wall. In this case, media brands risk losing their own brand value as they essentially disappear from search result pages and Google News. Is there a way to make the consumer pay without sacrifying the Google traffic?
In short: No.
Subscriptions don't work because there is no reason for it. In the offline world, I have to choose which morning paper I want delivered to my postbox. On the web there is no such need. My bits of news can easily flow from as much different sources as I like. There is no limit but one - my limited time, attention and intellect.
With an abundance of supply and limited demand, prices for news inevitably fall to the bottom, i.e. zero. There are only two possible ways to go: give your news away or go out of business. Publish or perish.
For newspapers, the Share Economy is a strong force that will put many of them out of business. The question is: Will we miss them?
I don't entirely agree with this analysis for two reasons:
1) "Is there a way to make the consumer pay without sacrifying the Google traffic?"
Well yes actually. That's how Google Scholar works. Publications let Google in to index their content.
2) Once we finally have an extremely convenient micro-payment mechanism, then I believe it will be no issue for most people to pay (say 5 - 15c) to read an article that has been socially recommended to them. The time one invests in reading an article is considerably more valuable than that.
I have reason to believe we are not so far away from such a mechanism.