Burdened as they are
with these “legacy” print costs, newspapers typically spend about 15
percent of their revenue on what, to the Internet world, are their only
valuable assets: the people who report, analyze, and edit the news.
Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand”-related expenses. But most of the money a
typical newspaper spends is for the old-tech physical work of hauling paper around. Buying raw newsprint and using it costs more than the typical newspaper’s entire editorial staff. (The pattern is different at
the two elite national papers, The New York Times and The Wall Street Journal. They each spend more on edit staff than on newsprint, which is part of the reason their brands are among the most likely to survive the current hard times.)

Publishers would be overjoyed to stop buying newsprint–if the new
readers they are gaining for their online editions were worth as much to advertisers as the previous ones they are losing in print. Here is a crucial part of the Google analysis: they certainly will be. The news business, in this view, is passing through an agonizing transition–bad enough, but different from dying. The difference lies in the assumption that soon readers will again pay for subscriptions, and online display ads will become valuable.–James Fallows, The Atlantic