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I’m just catching up to a report this morning from Citigroup’s William Bird in which he downgraded New York Times (NYT) shares to Sell from Hold.

He makes many of the same points that other skeptics of the newspaper sector have made in recent months: the steady shift of classified ads to the Internet at a time when readers are abandoning newsprint in favor of the Web. And here’s the stat that got my attention: from 2000 to 2005, about 18% of all U.S. broadband households dropped their newspaper subscription. By 2010, 35% of all households will have dropped their subscriptions, he asserts.

Concludes Bird: “the pace of Internet substitution is accelerating so fast, it’s overwhelming two positive undelrying trends: older demographics and slowing broadband adoption.”

For the newspaper industry, that is a worrisome situation, indeed.

In Tuesday’s session, New York Times shares fell 69 cents to $23.21.

Source: Citi: New York Times Headed Downhill Due To Internet