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But I do think you're going to see more and more journalists leave news organizations to try to start up a new model on their own. I don't think we'll see it in central Pennsylvania just yet, but you're right: Since newspapers have taken their sweet time, the future business model is there for the taking. No journalism experience necessary.
I would like to see regional journalists band together and create a central website to aggregate their feeds in one location. Something similar to All Top which would send readers out to each writers blog. This could give them the power of sharing readers and centralizing the ad revenue and in many ways shield them from angering advertisers.
Small weeklies can kill it if they are lean and mean. Reason being: the dailies are cutting back and axing suburban and small town coverage. So small weeklies covering school boards, athletics and city councils, cops, etc., are seeing increased circulation. The dailies are fading for obvious reasons: timeliness, ad competition, overhead costs.
One other point about dailies: they are losing faith in their own product, and that is a fundamental problem.