Just a little nit-pick here: the BBC is not tax-funded. You only have to pay the TV licence fee if you own (or hire) equipment that can receive and decode broadcast TV signals.

2) That’s the big question. I’m a bit more optimistic than most about the potential for news gathering by “bloggers” - just look at Talking Points Memo - and bear in mind that blogging is in its infancy. I doubt there was much quality original reporting five years after the first newspaper-like thing emerged. That said, I do think we need something like newspapers in the new era. I don’t see why online newspapers shouldn’t be as successful as print ones in the long run - indeed, given the advantages of online distribution and technology, they should be more profitable. In the medium term, I think the way forward is for newspaper sites to provide plenty of ancillary services. In the UK, many (most?) local newspapers have websites with classifieds, entertainment listings, weather, dating and so on. There’s a bigger picture debate about whether we need to do something to preserve public service journalism in the face of market pressures, but I think it’s too early to panic.

In addition to the issues you outlined, two others concern about the future of newspapers here in the U.S.:

1. How many people who have never habitually purchased a printed newspaper will have an interest in reading a newspaper’s web site?

2. Much (most?) of the fodder that fuels much (most?) of the new media is original reporting from newspapers and the news agencies that sell to them. Few bloggers, for example, have the inclination, skills or resources to do sustained original reporting. If and when they do acquire those attributes, they’re no longer blogging. We already have a generation of TV watchers who think “news” is screenful of pundits with agendas yapping at each other. Each newspaper lost means that much less original news production.

As for whether online revenues are making up for lost print revenues, it’s very hard to say (you’d probably have to look through the financials of those papers that are publicly listed), but I doubt they are yet. Still, in some cases it’s got to be close. The Graun, for instance, sells only 400k copies but has 19m online readers. The big battle, if you ask me, is convincing the advertising industry that online readers are worth as much as print readers. There are lots of good reasons why that should be so, but it may well take a generational change before that happens and a shift away from brand advertising to more niche or product driven ads.

Another issue is that during the last 20 years or so Wall Street has come to see 20%-25% profit margins as their divine and eternal right when it comes to newspaper companies, which seems insane to me. If owners just scaled back their expectations to, say, 10%, then the “crisis” would seem much more like a smooth transition. Even if we weren’t in a period of massive change and increased competition in the media landscape, 25% profit margins for what are effectively public service companies just don’t make sense.

This is OT, but the problem facing U.S. newspapers is declining revenue and rising costs. Is that the case for the major London dailies? My local daily has done a fine job of using the web — one of the first in the nation, actually — but, like many other papers, has not yet been able to draw enough revenue from its web side to compensate for the lost revenue on its traditional side. Hence, downsizing and offshoring of some noneditorial functions.

In any case, when I lived in the UK, I could never figure out how the London broadsheets made their money. They carried precious few ads. Do they make it on sales and subscriptions only? I can’t believe their production costs are significantly lower than here.