Mr Schwartz,  the owner of Black Inc., which publishes Quarterly Essay, The Monthly and The Saturday Paper, said it was time publishers and the public accepted the reality of the digital era.

“We feel that life without printed newspapers would be a diminished one, but we better get prepared for it.”

He was speaking at the recent 2014 AN Smith Lecture in Journalism, presented by the Centre for Advancing Journalism.

Mr Schwartz said the owners of first world newspapers were “proprietors of doom” who were “harvesting” — a marketing term for  cutting costs while squeezing out as much revenue as possible before the business goes broke. 

“They know it’s wrong — but they don’t have a choice,” he said. “They can’t ditch printers yet. The revenues of their online-only product cannot pay for even a fraction of the cost of gathering and producing the news.”

“ . . . life without printed newspapers would be a diminished one, but we better get prepared for it.”

Mr Schwartz said it was possible that some of today’s legacy newspapers would survive the transition to a fully online product, but it would not be easy — or pretty — and they should follow in the footsteps of Amazon founder and chief executive, Jeff Bezos, who bought the Washington Post in 2013.

Mr Bezos is developing a “worldwide digital newspaper” in an endeavour dubbed ‘Project Rainbow’, essentially a tablet app that will offer curated news and photos from The Washington Post. The project will include advertising but will rely mostly on subscriptions and will be distributed initially through Amazon’s Kindle Fire tablet.

“Like the rest of Amazon, it’s [about] enormous scale,” said Mr Schwartz. “It’s about capturing a much bigger market than what was possible for any one company before the digital era. This enables a paid content model: a very large number of people pay a very small amount to access the news.”

While Mr Bezos was well placed commercially to succeed, such a paid content model would only succeed if the journalism was of high quality. Mr Schwartz said readers in the era of online journalism “will carry a much greater burden than they did in the printing era”.

“This will bring with it many blessings. The greatest blessing will be that in order to be successful, media companies will need to offer such valuable and desirable content that people are willing to pay for it.”

Mr Schwartz said legacy newspapers were focusing too much on experimentation with advertising, such as native and targeted advertising, which would never be enough to make money. “These are medicines that will surely poison them before it heals them.”

Native advertising is “sponsored content” online and is viewed by many media companies as being more effective than regular ads. Targeted advertising relies on collected data to aim ads at different user groups.

But Mr Schwartz said neither was making enough money or supported an ethical media model.

He said the purpose of native advertising was to deceive the reader into thinking that particular content was written by a news source. It would “diminish the trust that has always been the true value, the commercial underpinning of serious newspapers”.

And he said targeted advertising, which is used extensively by Facebook and Google and tracks users’ online habits, could “only be called surveillance. It’s invasive, ubiquitous. We should be almost as wary of commercial surveillance as we are about government surveillance.”

“[Newspapers] can’t ditch printers yet. The revenues of their online–only product cannot pay for even a fraction of the cost of gathering and producing the news.”

Facebook was a “fickle autocrat” around which newspapers needed to tread carefully — and often fearfully. “If Facebook is a fickle autocrat . . . Google is God. And the ways of gods are unknowable to us mortals, so don’t be too surprised if one day Google decides to become a mighty news originator itself.”

Mr Schwartz said that such “international digital giants” could replace today’s newspapers as they could easily control international and national news content, and that “globalisation of the news is not a far-fetched idea”. He added that they would have to break national stories and scrutinse those in power, as these functions were “the currency of audience respect and demand, the commercial basis of the news business”.

But he did not believe such media giants would manage this at a local level, and “there’s a sense in which the survival of the news is the survival of the local”. However, no feasible online-only model for local news had so far emerged.

Mr Schwartz raised the prospect of a digital-only news site that might be called “Melbourne Voice”. He said such a site would serve one city, reporting primarily on “something that people will pay for: hard, relevant, essential, local intelligence with a focus on local business information and detailed consumer information.” It would not imitate the old news model because it would be online only, much smaller than its predecessors and without any “legacy baggage”.