Chicken Little gained some credibility this week, sad to say. Don’t look up without wearing some sort of Internet-based protective eyewear. The worst news was the semi-annual report on paid newspaper circulation, which showed a 2.6 percent decline in weekday readers among 788 daily newspapers across the country.

That’s a loss of 1.2 million readers for the six-month period that ended Sept. 30, compared with the same period in 2004.

The San Francisco Chronicle had the worst numbers, losing an average of 15.7 percent of its Monday and Tuesday editions, and 17 percent for Wednesday through Saturday. The Boston Globe lost 8.2 percent of its weekday average, or 37,246 copies. The Miami Herald lost 4.3 percent and the Philadelphia Inquirer fell 3.3 percent.

Bright spots were reported. The New York Times and U.S.A. Today reported increases of less than 1 percent.

The circulation report came out the same week that media executives at the World Association of Newspapers were told that “newspapers have no future without online and digital services.”

“Digital revenue is serious business … Online business is a growth business, while newspapers are not,” said Helmar Hipp of Austria’s Voralberger Nachrichten. He spoke at the WAN meeting in Madrid. His company earns 15 percent of total revenues from Internet products. Another speaker, Simon Waldman of London’s Guardian newspaper, told delegates that within “six to seven years” his group plans to dedicate 80 percent of its time to digital products. Currently the company devotes 20 percent of its time to online and other digital products.

Another interesting and related development was the announcement that The Associated Press and Microsoft were teaming to create the AP Online Video Network to provide news video for AP member web sites. AP will provide the content, Microsoft the video player and advertising sales staff. AP members will get the network videos for free and will share in the advertising revenue.

I find this news interesting because the AP has historically stayed out of selling advertising. The AP wires and the AP Radio Network historically were sold to newspapers and radio stations, and the members sold the advertising around the content.

The video network is a change in the model. It looks to me that the AP is concerned that it won’t be able to get adequate funding from its traditional member rate assessments. The Microsoft partnership allows the AP to start receiving advertising revenue based on its member’s online products.

The circulation report, the warnings at the World Association of Newspapers conference and the AP-Microsoft partnership are symptoms of change.

We’re all going to need new business models.

(Marc Wilson is ceo of TownNews.com and president of The Job Network. He is reachable at marcus@townnews.com.)