ABSTRACT. Besieged and threatened by new technologies, the business models that historically supported news organizations have been undermined during an era of “creative destruction.” Reviewing key challenges facing traditional media companies from the perspectives of shareholder, journalist and economist, this article imagines a path toward renewal for battered news organizations and speculates on a transformed marketplace as the digital era approaches its 20th anniversary. Far from heralding in a golden age of communication, the Internet produced a knock-out punch that destroyed barriers to entry, pricing leverage, and entire categories of advertising. An examination of 16 publically-traded companies – reviewed for their stock performance in relation to the S&P 500 over the past decade – revealed that both news organizations and media conglomerates have trailed the S&P since the turn of the century. Clinging to old business models, traditional news organizations failed to address operational and organizational issues with their legacy business, and to invest in transformation to a new digital model. To resolve this issue, a three-pronged game of “catch-up” is proposed: shedding legacy costs, re-creating loyal community online, and tapping into new sources of marketing and advertising revenue, nurtured by the Internet. A recent unprecedented 10% year over year newspaper circulation decline, coupled with increased use of digital services by younger audiences, indicates news organizations need to see their digital operations as the “future”, and not the “stepchild.” But change can be difficult for dominate players who have found success in certain patterns of business behavior.  Regaining audiences takes more than a minor adjustment. News organizations must become niche-oriented, mini-aggregators, fashioning a compel- ling interactive experience online, as well as providing proprietary information and analysis designed to appeal to communities with special interests.  In addition, they must re-evaluate how they sell advertising. Currently only 8% of traditional ad budgets in the US are allocated to online media, even though a recent survey calculated Americans consume roughly 30% of their content online. Publishers need to think beyond online banner ads and move to aggressively establish competence in “new” and developing forms of interactive marketing, sometimes referred to as “below the line,” or “nontraditional,” advertising (which includes event sponsorship, couponing, sampling and competitions). A return to the “good old days” is not an economic option. But there is an alternative future, if companies are willing to commit to change. At a minimum, a publicly owned company should strive to transform its current business model at the rate of 6% annually – mirroring the rate and pace of change of the S&P 500 – if it is to stay in the game.  pp. 9–30

Keywords: news, digital, business, organization, online, publish