As a primarily print journalist, one question I often get asked is how long do newspapers and magazines have left? I have given the same answer for the last ten years: as long as it takes to get an electronic reader with the visual quality of paper, that weighs no more than a thin paperback, with the battery life of an alarm clock and costs tens of dollars to buy. Actually, the battery life can come down a bit: a couple of weeks is just dandy, thank you. When all those things come together, you have the effective death of mass-produced print. It's difficult to think of any reason why you would not use an electronic reader over paper with those features other than stubbornness or vanity. However, vanity is powerful motivator, so I give books - some of them at least - a much longer lifespan.
Printed paper is no more than a distribution mechanism. As Mark Cuban pointed out, it is a distribution mechanism that is becoming prohibitively expensive compared with the alternative: electronic distribution. I disagree: print has always been expensive. It just happened to be cheaper than hiring town criers or minstrels to spread your words. Oddly, printing and distributing paper media has never been cheaper (well, barring some rises in paper costs recently). Go into a bookstore like Borders and just look at the racks and racks of mags. Many of them come from small independent operations, not just big publishers with deep pockets.
Individual circulations might be declining in a number of cases, but the number of titles remains higher than 20 years ago. Maybe even 10 years ago. Some news magazines have seen circulations climb, not fall, at the expense of other titles. However, the main gainer has been online news - not a big surprise. There are many bloggers who believe this shift provides an opportunity to remake the newspaper in their own image - that the change in distribution mechanism provides an opportunity to throw out the old ways of researching and publishing stories.
For printed newspapers, brand loyalty is important. That's how you get the money. People buy your paper everyday because, in the main, they like it more than the other ones out there. With a big enough circulation, you get advertising. And everybody's happy. Online, there is no brand loyalty. Just the stories that look interesting at the time. This makes getting serious money for your product a whole lot more difficult. This is why Cuban and others suffer "an onslaught of ads, popups and intrusions". Each one is cheap: having a lot might just pay for your staff, if you're lucky. It's no surprise to find that publishers are happy to continue working in print when the trend is towards online. It might be a decline, but it can be profitable, managed decline if they play their cards right. If not, you just lost a good newspaper and wound up with a collection of old press releases.
Personally, I reckon there will be a split in online publishing. Newspapers and mags that survive the transition best will disappear behind payment screens and only a fraction will make the necessary leap. These will be operations that can break their own stories. The others will sit in a ring around these and will be mixtures of blog and mag, in various proportions. They are those that can live off Adsense and its successors.
The effect on the book market, however, might be even more dramatic.