Everyone making the "all newspapers should've all done paywalls from the very beginning" argument is missing something really important: TV stations didn't. Here in Tulsa, we were behind a hard paywall when I got here. And we got virtually nothing from it -- no clicks, no subscribers, no ad revenue. Meanwhile, the TV sites dwarfed us in views. And many stories were stations rewriting us or chasing us (our old executive editor used to call stations and complain and get them taken down when it was too egregious). It took years to recover.
This, right here.
In the pre-Internet days, there was a pretty clear separation between newspapers & electronic media. Now that everything is digital, TV stations put news on their websites (albeit often poorly-written and with very little depth - basically print versions of their 60-second hits) and promote their personalities, who foster a connection to viewers through being on TV all the time. While it's nowhere near the quality of newspaper journalism (and often, stories are borrowed after being reported by the newspaper first), that's enough. The reality is, most news consumers consider TV news the be-all, end-all of journalism and because its revenue model is based on cable subscriber fees and advertising on the 11 p.m. news. The (free) website is simply a promotional vehicle to get people to connect with that news station (and there's competition in town).
For those in print, the website IS the product, and while it provides depth and quality reporting, there's no other revenue stream than the website now that the printed page is declining or disappearing in many markets. If we charge and they're giving the news away for free, the vast majority of consumers will naturally go to what's free and assume that's all they need.
The problem is TV news is comparatively superficial and very consultant-driven. The reporting isn't often driven by what is good journalism, but what drives ratings (or what consultants believe drive ratings), and there's a lot of self-promotion packed into those newscasts. The ethical standards we hold ourselves to are a bit less there - especially in sports (just watch the local news in an NFL market on a Sunday, especially if the local team is in the playoffs. It's highly likely the anchors will be wearing team colors and even jewelry with the team logo, and often, the stations have paid arrangements with players to appear on their newscasts). There was a time when TV stations began trying to compete with newspapers by hiring journalists and columnists from newspapers - in our area, Rick Bozich and Bob Kravitz both going to TV. Not sure if Bozich is still in TV, but Kravitz was laid off by the highest-revenue TV station in Indiana in a cost-cutting move (which came at the same time the station sent the entire morning news over to Britain to cover the royal wedding, which has no news value in Indiana that couldn't be covered by NBC). The revenue/readership on the "free" website for those columnists just wasn't deemed worth the cost.
Unfortunately, in many of these markets, people will then wonder how they elected so many corrupt public officials. The tiny suburban daily (once 10K circ, now about 5K) I used to work for has broken stories that has led to the arrest of several elected officials (including a significant graft case), exposed problems at the local animal control, et al. Without money, those stories don't get reported. No TV station is going to care about local town/county government in a suburban county (much less have time to investigate city government in the metro). Those stories don't generate enough ratings to be worth the cost, even if they are newsworthy.