Will newspapers die? Hopefully not.
Are they dying right now? Yes.
Or, more accurately, they're being killed from within. What you have to remember is that newspapers aren't run by journalists, they're run by managers and salesmen who don't seem to understand their target market (readers) or their product (quality reporting). They don't seem to look further than the next issue -- if that hits the streets then great, job done. Who cares how it's achieved.
Here in the UK, so many quality journalists and photographers are being let go because managers see staff as an expendable resource. Got 20 journalists working their arses off to produce the paper? Cool, sack 10 of them and use agency copy. The public will never notice, right? That's Â£200,000 saved per year. When the readership halves because of rubbish content, we'll dream up some other excuse to explain that away. And then we'll sack more staff. Never the managers. They're not expendable. Always the journalists.
I'll give you an insight in to where the power lies at newspapers. About 2 years ago I was working at a great bi-weekly city newspaper. We were working on a story for the next day's paper and I went over to talk to the news editor. He told me that there might not be space to run the story anymore, because four news pages had been dropped. Why? Because the paper liked to have a 50/50 split between editorial and adverts. The ad sales team had sold a full four pages less adverts than they were meant to. So to make everything look right with the upper management, the manager of the ad sales team simply had four news pages dropped.
It wasn't like we were short-staffed that week or there had been a shortage of stories. The news was written, the photos had been taken, the pages were being made up. And four pages were wiped out, just like that, to make one sales guy look good.
Ask anyone who works in newspapers if they've ever heard of the editorial team having ad pages dropped to make space for news. Go on, have a guess how often that happens.
tl;dr: Newspaper sales are dropping. Managers try to save money by making the newspapers worse. Sales drop further. And so on.