Media economics pundit Robert H. Picard asks this rhetorical question: "Have journalists gone mad?" He then proceeds to lay out a case why things are less bleak than they seem.

From The Media Business blog (posted March 10):

It some ways they have. They are panicking at problems in big city media and ignoring the fact that most newspapers are relatively stable and reasonably healthy. The only newspapers experiencing serious competitive difficulties are those in the top 25 markets (about 1 percent of the total) and these are joined in suffering by corporate newspaper companies whose executives have made serious managerial mistakes.

Journalists are sometimes their own worst enemies, and this is one such time. Through overly pessimistic outlooks and sweeping generalization, they may be hastening the obituaries of some weak papers by making readers and advertisers think their serve no purpose today.

Discussion of the newspaper industry’s situation is confused because many observers do not separate its short-term problems with the economy from the challenges of long-term trends. Then they compound that problem by using papers as examples of industry developments that are unrepresentative because of their market situations and managerial errors.

Most newspapers continued making profits up to the current financial crisis and many papers whose parents went into bankruptcy were doing likewise. They will make profits again when the recession ends as they have done in the past.

The Rocky Mountain News did not die because the newspaper industry is in trouble, but because it was the secondary paper in the market and the joint operating agreement was not enough to save it. Several other JOA papers are on their way to oblivion for the same reasons. The Journal Register Co. and Tribune Co. went into bankruptcy not because its newspapers were unable to survive but because its management took on far too much corporate debt.

Clearly, large metro papers are suffering from the effects of competition from television, cable, and Internet. But that same pain is not being felt by most of the nation’s papers that operate in small and mid-sized towns and are the primary or only significant provider of news in their communities. They will continue to survive for many years because their content is unique and because their local advertisers are not well served by other media options.

What we need is a dose of realism in the discussion of the journalistic situation today. Most papers are NOT in the hospital, let alone comatose. The dead and the dying may be there and if so it is because they can't figure out how to give readers something worth paying for.