That question has been asked and answered. Merely look at the stock prices of the company in question. McClatchy (MNI), NY Times (NYT), Gannett (GCI), Time Warner (TWC), etc. All are at prices not seen in over ten years while the overall market is near all-time highs.

The true value of any company is nothing more than its ability to deliver a product or service for which a customer will pay. It’s always been so and will never change.

Companies that become cash cows, particularly if they rely on subscriptions for the bulk of their revenues, are in my experience especially prone to the insularity and inertia you describe. At one–currently very profitable–company, this condition was exacerbated by a combination of extremely low turnover throughout the organization accompanied by an enforced promote-from-within policy.

In these cases, especially if the company is still highly profitable, I don’t think you can just bring in a crop of new executives to make changes because they may not gain the support of either the rank and file and middle management constituencies (which may largely consist of clock-punchers there for the paycheck and pension and thus may not grasp the need for change). Because cash cows tend to be very hierarchical organizations, the voices of younger workers who may not have been indoctrinated into the company’s culture–and thus perhaps better able to understand the competitive environment–may not carry much weight.

I don’t know what the solution is, but I’d be interested to know if any companies have ever been able to successfully make this transition. Semi-failed firms like GM and Ford for example didn’t have to adjust from distributing physical manufactured goods (somewhat analogous to branded, packaged aggregated intellectual property) to whatever impossible-to-describe dynamic organism that the web has become.