Don't think the market can support multiple newspapers behind paywalls, the leaders will take control with better coverage + features and the differentiator will be the editorial slant.

Most markets with zero distribution and switching costs are winner-take-all. The only reason newspapers were regional to begin with was that it cost a lot of money to print and ship them, once the Internet made that stop being true, the natural equilibrium was toward only a few large papers and the rest dying off.

That's not it.

Newspapers used to have a monopoly on advertising, at least in the local area. Once they lost their monopoly they were no longer financially viable.

They never had a monopoly: direct mail, billboards, Yellow Pages, TV, radio, leaflets…

The local movie theatre wasn't going to be advertising show times anywhere but it the newspaper!

If you wanted to sell a car, or fill a job opening, or rent out an apartment, you needed to advertise in the classifieds.

There were classifieds other than the daily paper. All around town were newspaper boxes with ads for cars, apartments, and jobs. There were also weekly papers with classifieds.

Even during the time when towns had just one daily paper, this paper did not have a monopoly on nearly any form of advertising.