We talk a lot at Podcasting News about how new media gives anyone the potential to publish to people all around the world.

This poses challenges to traditional media, though, especially newspapers, because they are faced with tens of thousands of nimble new competitors. As a result, newspapers are losing advertisers to Web media, losing future readers to Web media and losing value in the face of Web media competition.

An article in the New York Times today shows that mainstream media is awakening to these facts, and that it’s clear that some newspapers are facing extinction:

“For newspapers, the news has swiftly gone from bad to worse. This year is taking shape as their worst on record, with a double-digit drop in advertising revenue, raising serious questions about the survival of some papers and the solvency of their parent companies.

Over all, ad revenue fell almost 8 percent last year. This year, it is running about 12 percent below that dismal performance, and company reports issued last week suggested a 14 percent to 15 percent decline in May.”

The decline in readers and revenues are bigger than even what pessimistic forecasts predicted, which will force painful changes for the industry:

“Analysts and newspaper executives find themselves revising their forecasts downward every few months, unable to gain a stable footing on a sinking floor.

Since the fall, when Media General, the owner of a major newspaper chain in the South, set its 2008 budget, ‘We have pulled our thinking down twice with respect to revenue,’ said Marshall N. Morton, the chief executive.

Over the next few years, he predicted, ‘There’s got to be some assimilation,’ with some major American newspapers going out of business or merging. At the corporate level, he said, ‘I would guess that rather than bankruptcies, you’d see combinations.'”

According to an Ad Age report, the top 100 advertisers in the U.S., who represent 41 percent of total advertising spending, shifted about $1 billion last year from TV and newspapers to the Web.

How much more of this can newspapers take?