One of my first jobs was delivering newspapers. I began working as a journalist while still in college. So, I bring a certain bias to the debate over the value of newspapers.
I began reading the day with a long rant about how newspapers don't matter. Just now, I have been reading the transcript of an interview aired on the program "On the Media" a few days ago.
You can listen to the interview here:
Take home message: newspapers matter a lot - for civic involvement and education, and hence for democracy.