What do Swiss watchmakers and newspapers have in common?
Soon, they'll have history. As in "banished to history".
The Swiss watchmakers' paradigm is a classic example of failure to react to change, and is most likely to be heard in the context of paradigm paralysis. (You may also have heard this called paradigm shift, but apparently some people believe we shouldn't speak of it that way.)
The idea is that businesses assume that the way things are now is the way they will always be. When things begin to change, they continue to think about the way that things were, and so they fail to adjust to the way things are becoming. Eventually, change overwhelms them, and they are lost to history. (For the Swiss, the problem was the quartz clock. They did not see the need to develop it or patent it, because that's not how they made watches then. They quickly lost their hold on the watch market and have a fraction of the market they used to control.)
Newspapers are in that position now. Once dial-up access became commonplace, people suddenly had access to immediate news: they didn't have to wait for Sunday morning to read about something that happened Saturday night. (Of course, if you ever delivered papers, you learned that sometimes it had to happen by Friday night or Saturday morning to make some parts of the paper.) With broadband access spreading, suddenly people can watch entire stories online. For free.
Some people get this. Some do not. The New York Times, ironically, has an opinion column about micropayments and newspapers. A former editor of Time (old world) believes that micropayments will save newspapers: you see, people will pay little bits of money for content they can easily get for free now because ... because ... right. An author and, um, internet historian, I guess (new world), says otherwise. People don't like to pay for anything. In fact, people get angry if you make them pay for something that used to be free. (See: McDonald's, sauces.)
In fact, let's look at that. Right now, if you go to McD's, you've obviously got questionable taste, and you need to get real food, but let's just play along for the sake of argument. You ask for a couple of extra sauces and they charge you 20 cents. You probably get them anyway because you're accustomed to that amount of sauce and there is no other source of sauce readily available to you.
Now imagine that you go to McD's, they give you one sauce, and you want more, but there's an Arby's next door, and they'll give you all the sauce you want for free, even if you don't order anything from them. (Again, play along, please.) What do you do?
Well, a few people will spend the 20 cents, because it's not worth their time to go next door. But I think most people will go to Arby's. Newspapers will learn this the hard way, I fear. It's pretty hard to justify charging people to read the same stuff they can read in many other places for free ...