One citizen journalist's fantasy:
The optimum newspaper device will have a thin organic screen that can be folded or rolled just like a piece of laminated note book paper and have the life of a plasma television. It will be user operated by a touch screen and be able to display full color animation.
The organic screen will have to be bright enough so you can read it easily in daylight and all this technology will be operated by a thin printed low voltage power storage source that has the weight of less than a penny and a charge that can last up to 24-36 hours of continuous use.
It will have WIFI and Bluetooth built in so that it can update automatically wherever in the world you happen to be. It will sport a single or maybe a double page format that you can operate with your finger just like todays touch screens but be a feather weight device.
You will be able to subscribe to whatever content you like and you will most likely pay for that privilege on a subscription basis because advertising revenues alone will not be able to support the price it takes to produce the quality content needed to be as relevant as todays printed newspaper.
The cost of these appliances will have to be extremely inexpensive because they are going to be made for the masses. Like the personal computer or cell phone almost every single person on the planet will eventually own one of these gizmos.