Where Are Newspaper Readers Going?

Newspaper circulation continues to decline in the U.S., according to a story in the New York Times. In the six-month period ended Sept. 30, average daily circulation for 770 newspapers fell 2.8%, while circulation for Sunday papers was down 3.4%. So where are all these newspaper subscribers going? Is it the Web that's capturing their attention or DVDs or iPods or their PVRs? An optimist will suggest many (some?) readers are going to newspaper Web sites rather than having the paper delivered. In theory, this means newspapers could generate more advertising revenue online. A pessimist will suggest newspaper readers are moving online (but perhaps not to newpaper sites) and dying off. Before anyone hits the panic button that newspapers are doomed (other than tree-loving environmentalists), the reality is newspapers are just being squeezed by a new medium – much like radio suffered but didn't disappear when TV appeared on the scene. The challenge for newspapers is adjusting their operating and economic models to account for more competition for the attention of advertisers and readers.
Update: Circulation among Canadian newspapers is also down, highlighted by major declines at the National Post.