To survive, newspapers need to create significantly more value for readers and advertisers to drive demand and revenue, and lower their cost structures to about 10% of their historical levels. Any incremental steps, from pay walls to moderate layoffs, are totally inadequate to turn their fortunes around.

Let me explain.

The value proposition of most newspapers for both readers and advertisers pales in comparison to many new media options. For instance, who here gets their technology or sports news from a national or local newspaper? Who looks to newspapers for the latest stock market performance, restaurant reviews, or movie showtimes?

Since their value proposition is depressed, newspapers are attracting fewer readers (and subscription dollars) and, in turn, fewer advertising dollars.

And then you have typical newspapers' unwieldy cost structures. Many newspapers are still operating with staff levels that are multiples greater than their new media counterparts. I don't have any current examples, but during the 2008 elections the Huffington Post was driving as much online traffic as the Washington Post, with a headcount of about 6.25% (50 employees versus 800).

In short, lower value begets lower revenue, and if we assume a high cost structure, it's a downward spiral to oblivion.