Newspapers are not expensive to produce. In fact, even with the cost of people, newsprint, delivery fuel, etc., etc., the per-paper cost is still relatively small. I’m going to guess that circulation revenue comes close to covering the nut. Well managed operations can still make a vast piles of money.

I believe the underlying problem is that each new generation in the United States READS less then the previous one. Not just newspapers, but magazines, books — yes, even Internet pages. More and more people USE the Internet, sure, but most people don’t READ on the Internet.

We are raising generations of observers who want to be entertained by the mass media, not informed by it. They want to WATCH non-sensical content like “American Idol” and most of what passes for programming on YouTube.

READING requires effort. People in the U.S. just don’t want to be bothered.

Of course it is easy to agree on the necessity of moving “beyond”, that is: beyond ways of thinking that reify the existing ways of doing things, that function to solidify entrenched loyalties to routines and practices that served traditional models and relationships (between owners, editors, reporters, sources, advertisers and audiences) so well.

And yes, the key to the “new” mixed media ecology is starting from the basic premise that all those roles and players are still here, but that they are converging, mixing, becoming more fluid or liquid.

That also means that new business models cannot be premised on a notion of structural stability. We need to embrace liquidity as the foundation for moving beyond.

That said, we cannot forget that all these news and media companies to a large extent are not just governed by journalists or owners or advertisers, but also by investors and stockholders - and THAT is a system that seems particularly locked into a 19th century industrial-capitalist way of thinking (with a fixation on growth and increasing R-O-I).

I am not anti-capitalism, but as someone smarter than me said to me recently: why are we never critically discussing the underlying issue determining most of our concerns about the survival of quality and creativity in media work: capitalism (more specifically: its dark side).

People come into the news site from all kinds of directions — Google searches, blog links, RSS feeds. They land on any one of thousands of pages. They stay on a page for (average) less than a minute. Then they move on.

Which people will land on which pages? Hard to say.

Who will see your ad? Very, very hard to say.

Yet lots of people are landing on those newspaper Web site pages. Lots of eyeballs. The numbers are there, but in the aggregate. Single-copy numbers are blown to smithereens.

So if Company X could buy a space on every single page of a news Web site — woot, what a lot of eyeballs that would be!

But that ad would have to cost about $1 million to support all the work that produced all those pages.

The Long Tail is working against the advertising business model.

What hasn’t been seen yet is whether *traditional* news organizations (ie: newspapers) can figure out how to a) draw enough readers to their sites in order to earn ad revenue, and b) structure their newsrooms so they have the right number of staff (and the right skill sets) to deliver online news.

There are non-traditional news organizations that are doing just fine financially. Talking Points Memo is one example.

The reason why newspapers think online advertising isn’t a sufficient business model to support journalism is because they’re asking the wrong question. They’re asking: “How can we make enough money to fund the way we used to operate in the past?”

Instead, they should be asking: “What do we need to do to attract and retain readers online?” and “How should we structure our organizations in order to deliver news in the ways that attracts and retains readers?”