I think it doesn’t look good. Papers are on the way out — all of them. Even the NYT is losing money hand over fist.
Once this happens, you would *hope* that something would have to change about online journalism. It could no longer subsist as an echo of legitimate reporting, if there was no legitimate reporting left to latch onto.
I sense however that the lust for free content will result in a decline in the quality of all kinds of things — fiction, news, you name it. The paradigm will become (is becoming) american idol style amateur writing contests and/or “citizen journalists” who all provide substandard content for free to audiences that have to comb through and vote on the whole mess of it, never sure what is worthwhile or accurate. But at least nobody pays, or gets paid! (except advertisers).
I personally don’t blame technology for any of this — I blame traditional media for failing to adapt.