I agree with comments (other places) that much of the discussion about the demise of newspapers did not distinguish newspaper publishing and journalism. The newspaper publishing business model is on its last legs. While I will miss the physical artifact I don't mind seeing it go. Journalism, however, is needed now more than at any other time in its history.
Government at all levels encompasses more of people's lives that ever before. It is huge: from products to processes to places there is not much that is not touched by a regulation. Without investigative journalism we, as a country, will be lost. Any corruption we have now will pale in comparison to what we will have. Any danger we have now will pale in comparison to the future dangers we will have. Journalists study these things. They are the nudge that gets answers. Journalism needs to be supported.
There is talk that David Geffin will buy the New York Times and make it a non-profit. Something like what was done for the St Petersburg Times in Florida. On the surface this seems like a good thing for the New York Times. However, given how much debt the Times has it is already a non-profit. But seriously, making all news entities non-profits does not make long term sense. I am sure that there is enough philanthropic money out there to do it but journalism needs to stand on its own feet. We don't want "journalism" to have the same air as "academic" has today -- work distinct and unrelated to everyday lives.
What to do? My opinion is that news organizations need three products. The products are distinguished by factors of intellectual effort and historical perspective. Each has a different business model. They all derive benefit from skills and act of investigative journalism.
The first product is the "news stream." The recently released Times Wire is a model presentation for this. News streams represent the events and reportage happening now. A better Twitter for the news room. The content is enough for the reader to get the gist of the story. Sometimes the content comes from journalists but content can automatically from the raw data available from sources such as government administration, police, fire, hospitals, etc. Overall, there is very little editing that does into the news stream. The news stream is paid for by advertising. It is free to the reader.
The second product is the "news edition." Its primary function is to present a day's or a week's worth of general local and regional news and information to the public. It is similar to the newspapers and news magazines we have today. This contains some of what is in news stream but in longer form. Long form investigative pieces are its bread and butter. What is investigated is, in part, driven by the readers choices. The news edition is paid for by advertising, subscriptions, and single issue purchases. Advertisements must be subscriber specific (just as Google search is today) so a higher advertising rate can be charged.
The third product is the "news horizon." They are reports containing a deep investigative analysis of a single topic. "Commercial Fishing in South Kingstown", for example. It is informed by the current and historical trends and the current and historical facts. Depending on the topic it is updated biennially , yearly, or quarterly. It is considered the principle source of an objective perspective on the topic. Its readers are businesses and investors and sometimes the general public. The news horizon is a subscription service and single issue purchases. Any advertising would be limited to an underwriting notice.