How can newspapers survive?

According to Nicholas Carlson of Business Insider, "Printing The NYT (New York Times) Costs Twice As Much As Sending Every Subscriber A Free Kindle:

It costs the Times about twice as much money to print and deliver the newspaper over a year as it would cost to send each of its subscribers a brand new Amazon Kindle instead.

How can newspapers survive? Here is a suggestion from Walter Isaacson of the Huffington Post who said, "last month: more people in America got their news online for free than paid for it by buying newspapers and magazines.":

The key for attracting online revenue, I think, is coming up with an iTunes-easy, quick micropayment method. We need something like digital coins or an E-Z Pass digital wallet -- a one-click system that will permit impulse purchases of a newspaper, magazine, article, blog, application, or video for a penny, nickel, dime, or whatever the creator chooses to charge.

It seems clear to me that the market is acting. Will newspapers be able to react before they just die? I think we are going to find out sooner rather than later.

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