"Same number of readers" is deceptive since the overall population has increased. In 1990 there were about 220 million people in the US. Today, there are 320 million.

So newspapers have a smaller market share and a much older demographics.

It's more than "ad revenue generated per subscriber", it's also operating cost to generate revenue. Most newspapers are unionized and salaries, benefits, costs, etc have increased while revenue stagnated. That's why newspapers have to constantly lay people off. If costs stayed stagnant along with revenue, then newspapers theoretically could be fine. But inflation doesn't allow that.

Due to legacy ( essentially what advertisers know and are comfortable with ), advertisers spend more for each pair of eyeballs on print, tv, etc. Since digital is new, advertisers spend less per pair of eyeballs. That's can't last forever as digital gets more established. It's why large newspapers are moving quickly onto social media and the internet. It's where eyeballs and ad spending is going to be.

Also, local and mid tier newspapers are facing digital headwinds as social media focuses on boosting "trusted authoritative sources". So the big boys - The NYTimes, WSJ, Bloomberg, etc are going to thrive as they eat the smaller newspapers' lunch with the help of google, facebook, apple, etc.

What we are seeing is a form of stealth media consolidation. Smaller newspapers are being bought up by larger newspapers. Sadly, it's happening in every industry. More consolidation, less competition.

Yes. The problem is the internet has created advertising avenues that are way more efficient than any newspaper can hope to replicate. Only the most trusted newspapers that can turn to subscription and affiliate revenue will be able to survive.