The Internet wrecks the old newspaper business model in two ways. It moves information with zero variable cost, which means it has no barriers to growth, unlike a newspaper, which has to pay for paper, ink and transportation in direct proportion to the number of copies produced.
And the Internet's entry costs are low. Anyone with a computer can become a publisher, as Matt Drudge demonstrated when he broke the Monica Lewinsky story in 1998 and countless bloggers have shown in the decade since. These cost advantages make it feasible to make a business out of highly specialized information, a trend that was under way well before the Internet.
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One of the rules of thumb for coping with substitute technology is to narrow your focus to the area that is the least vulnerable to substitution.
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Newspapers might have a chance if they can meet that need by holding on to the kind of [specialized, investigative] content that gives them their natural community influence. To keep the resources for doing that, they will have to jettison the frivolous items in the content buffet.
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