Final answer:
The decline in American newspapers' fortunes is primarily due to their overreliance on advertising revenue over customer subscriptions. Adapting to digital platforms has not fully compensated for this loss. Newspapers have cut costs through downsizing, which has impacted the quality of news coverage.
Step-by-step explanation:
The most likely reason for the decline in fortunes of American newspapers, and their inability to exploit their competitive advantage is option 2) Relying too heavily on advertising, rather than customer subscriptions, for revenue. As many Americans have moved away from the tradition of reading print newspapers, this exodus has been compounded by the migration of classified ads to online platforms like Craigslist and specialized job websites. Newspapers have tried to adapt by turning to social media to stay visible and relevant, and while this has allowed for some engagement, it has not fully offset the loss in advertising revenue.
The shift from print to digital media has been significant, with a clear preference for digital news consumption among younger audiences and the growth of digital ad revenue offering a lifeline to the industry. However, this has not been enough to compensate for the overall loss incurred by the decline of print advertising. Consequently, many newspapers have had to downsize, which has led to a reduction in the depth and scope of their reporting.
Competition from television and radio has also contributed to the decline, but the availability of news on these platforms is also being eschewed by younger demographics in favor of digital sources. This evolution in news consumption patterns indicates a continued challenge for traditional newspapers in maintaining their relevance and financial stability in the digital age.