Why newspapers are screwed

I saw this a while ago but only got around to posting something about it.

Since I'm not a numbers person and it's hard to argue with someone like Henry Blodget, who often knows what he's talking about, I was intrigued by his argument that newspapers, even if they shift over to the Web, are doomed. (Link to Blodget's full post here.)

In short:

• Content creation will remain too expensive.
• The bulk of advertising currently goes to the print product. and remains the most profitable part of the business. (Using The New York Times as example, 7.5 million online readers generate only 10 percent of the company's revenue.)
• Even if every newspaper were to shift online and printing/distribution costs were eliminated the bulk of ads would dissipate onto other non-newspapers sites -- eBay, Yahoo, etc.

OK, it's hard to argue with the numbers but I'm still convinced that those who can create compelling, relevant content in a way people find usable will find great success. Perhaps not the degree they did before but there will always be a need for information and people willing to fund some part of it (the info itself or access to the eyeballs.)