Peneberg says newspapers should worry, because of a demographic shift away from reading them in younger people. I'm not so sure, for two reasons. First, I think younger people traditionally haven't read papers. Second, I think they read them even less now because they're simply not as interested in reading in general. Peneberg counts online time as reading - I think that's off. Surfing Fark is not equivalent to reading the WSJ.
So should newspapers worry? Yes and no. The industry will shift to even more extreme winner-take-all dynamics, because the net extends natural monopolies across local geographies. So in each niche, there will be one winner - one NYT, one WSJ, one Economist, etc. This means newspapers won't go away; there will simply be less of the,
The industry should worry that the fundamental value driver in such a market are about succesfully co-opting, on internet time, the innovations in the online publishing space - from blogs, to coming ones, like sell-side ads, viral revenue chains, open-source journals, etc.
Upshot: I expect to see newspapers essentially evolve into publishing markets
, much like Lloyd's is a market for insurance underwriting.