Yesterday, the news made news: the Associated Press reported that newspapers’ weekday print circulation, still their core business, is down 2.1 percent in the last six months. At that rate, the total readership is halved every 15 years—and that’s assuming the industry doesn’t fall into the accelerating death spiral that it seems to have entered. Every major national newspaper has had multiple rounds of layoffs in the last few years, and many have reduced their page dimensions even as they print fewer pages. TIME magazine, under a new head editor, has recently completed heavy layoffs and a redesign in which it has retreated from the idea of first-hand factual reporting in favor of commentary and lifestyle pieces. Specialized magazines, with their topical niche audiences, are faring relatively well. As magazine critic Rex Hammock puts it, “magazines that people display on coffee tables will exist as long as there are coffee tables.” 

But why are the big standard-bearers doing so badly? Journalists, who cannot always be relied on to keep their own role in perspective, often speculate that newsroom layoffs are causing, rather than following from, the economic decline—fewer journalists mean a less profitable product. Others make much of the costly physical infrastructure of offline publication, which becomes a liability as media consumers move to online alternatives that have much lower overhead.

I think the real reasons for this shift lie not with reporters, or with readers, but with advertisers. In the early 20^th century, when the department stores first emerged as a potent force in retailing, there were suddenly wealthy advertisers whose prosperity depended on their ability to reach a broad cross-section of the consumers in a city, without regard to political belief or specialized interest.

These advertisers were historically anomalous, and so were the neutralist city newspapers that emerged as one of their primary advertising vehicles.  As Alan Rusbridger, the editor of Britain’s Guardian newspaper, observed last year, advertising created an independent, general-interest and neutralist news media where partisanship and niche focus were the historical norm.

Media organizations assemble and sell audiences, and the broad audience that a value-neutral news reporting operation tends to attract is no longer in demand, online or off.

Look at the current state of business: Just-in-time supply chains, massively customized manufacturing, a concentration of value in intellectual property rather than in physical capital, and other factors have splintered the markets for a tremendous range of products. Paying to reach everyone through a single dominant platform such as a general interest news outlet is a proposition that makes business sense for fewer and fewer advertisers. The problem is not that traditional news organizations are on paper. The problem is deeper: Media organizations assemble and sell audiences, and the broad audience that a value-neutral news reporting operation tends to attract is no longer in demand, online or off.

What can still work, online and offline, is specialized content that appeals to a particular audience. The Economist, The Wall Street Journal and the Financial Times are outperforming other papers. Titles like Bon Appetit and Southern Living bring together a strong topical focus with a natural raison d’etre débranché—that they fit on the kitchen table or the living room shelf, respectively—and they are profitable.

These trends are far from conceptual on the business side of your average newspaper. The Washington Post may produce a guide to ski vacations that attracts just the winter warriors that North Face wants to reach to sell its parkas—but the salesman or woman who goes out to sell those ads will be up against the ad sales team of skinet.com, who focus their entire working lives on selling ads to the likes of North Face. It doesn’t look good for the generalists.

In the immediate term we seem headed toward the celebrated and feared “Daily Me,” where the media world fragments into as many niches as the marketers can dream up—each one a specialized venue for reaching just the right audience with just the right message. 

But the long-term trend may be just the opposite. The context-sensitive, automatically targeted ads pioneered by Google are becoming an industry standard. The privacy concerns that have inhibited marketers from keeping individuated profiles on web visitors are gradually yielding to the convenience that comes from letting web sites remember what you want. Context-sensitive ads that change depending on which story they are next to, or which viewer is looking, can be equally at home in any venue. In effect, in the world of contextual advertising, every story is its own publication, its own audience to be separately sold to whomever a computer algorithm finds to be the ideal advertising buyer.

At that point—years distant if indeed it ever comes—the whole idea of an advertising market will be turned on its head as automated computer context-matching takes the place of human buyers and sellers of audiences. The resources invested in assembling specialized audiences at the publication level, rather than the individual-viewer, single-story level, will be largely wasted, much as the resources devoted to pulp farms are today. Individual articles may be evaluated not only on their journalistic merit, but on their likelihood of drawing some particular lucrative demographic or other.

Where does that leave the high-minded chatter about the public service role of the press, or journalistic ethics? We'll have to wait and see.

David Robinson is managing editor of The American.

Editor's note: If you have something to say, feel free to blog about it. The "blog comments" button, below, is designed to steer readers to blog posts that respond to this story.