It has been well-documented that newspapers as we know them are in a major freefall in their ad revenues.
Sometimes the deeper value of something to its community of advertisers, readers, consumers, etc. is not obvious – particularly when that something has been around for a very long time. As an example of this problem, Marshall McLuhan once pointed out that IBM for many years assumed that their value was in making office equipment and business machines. It almost sunk them, until they finally realized that their real value was in processing information. Unless I’m mistaken, newspapers have operated for years on the assumption that their value to readers was in great news content. I wonder, though, if their value was instead all along in giving people a sense of community – both geographic and interest-based (political, industry, etc). In 1835, Sociologist Alexis DeTocqueville wrote of America that
“They need some means of talking every day without seeing one another and of acting together without meeting. So hardly any democratic association can carry on without a newspaper.” 
Newspapers really took off in the late 17 and 1800’s – a time in the U.S. where the states were trying to make sense of their new found, loosely-knit country. Newspapers were really the only medium which could do that efficiently – to facilitate national communities of interest (what Tocqueville called “associations” like the political parties, etc.) as well as local communities (townships).
Perhaps what has been hurting newspapers of late (and I’m probably not the first to say this) is that they assumed that their value was in their news content, which as Esther Dyson and others might say is an infinite good – producible and reproducible by anyone with a computer and a camera – even more so when there are groups of them, which happen to include experts in their midst, who are now empowered to publish at the press of a button.
Perhaps what newspapers need is to really get back to their deepest roots, where great content was only one part of their role in facilitating community-building, which is what people really paid for. I’m not exactly sure how they will do this, but i have some ideas which may be food for another post soon.
 McLuhan, M. (1964). Understanding media: the extension of man. Routledge & Kegan Paul.
 Tocqueville, Alexis.  1988. Democracy in America. Ed. J. P. Mayer. New York: Harper Perennial.
 In 1995 Esther Dyson predicted that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”