This ends up being a specific instance of the general model that Umair Haque discusses – which he calls nichepapers:

Nichepapers are the future of news because their economics are superior. All the Nichepapers above are “real” enterprises, with staff, offices, and fixed and variable costs. Nichepapers offer more bang for the buck: greater benefits for far less cost. Readers get more, better, and faster content — while publishers realize lower capital intensity, lower distribution, marketing, and production costs, and less risk. What is different about them is that they are finding new paths to growth, and rediscovering the lost art of profitability by awesomeness.

One of the drivers of this awesomeness, according to Haque is that the nichepapers are intent on creating value, while the existing newspapers are more built around taking advantage of their monopoly on local news (and on access to local readers). I guess it’s another example of just how hard it is for well-established firms to generate new business models in the face of external change. If you’re in a well-established firm, it might pay to be thinking about this issue now, rather than waiting. And the key question is: as the environment around you changes, what are you doing to create genuine value? Answering this question incorrectly is often the cause of failures to adapt.