The answer to whether people are still reading the news in outlets ranging from the New York Times to the NZ Herald in the age of the Web is a resounding ... YES ! The following two minute brilliant presentation explaining the reason why by Bharat Anand (who teaches a course on the media at Harvard Business School) is well-worth watching. See:
He argues that the financial decline of many of the old big names in the newspaper industry comes from a loss of advertising revenues from the classifieds, not from an especially dramatic decline in terms of those reading the news in these outlets.