LOS ANGELES, CA (Catholic Online) - "This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense," Buffett wrote in a letter to editors and publishers. "We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need."

Buffett is adding to Berkshire's newspaper holdings with the $142 million deal announced May 17 for Media General Inc. publications including the Richmond Times-Dispatch of Virginia. Buffet bought the Buffalo News in 1977 and said in 2009 that newspapers have the potential for "unending losses", now says that papers with a community focus can profit as they change their business models.

According to Buffet, newspapers only fail when there are dailies competing in the same town, a publication forfeits its position as the primary source of locally important information or the market doesn't have a sense of identity, he said.

"We don't face those problems," the 81-year-old Buffett wrote in the letter dated and posted on the Web site of Berkshire's Omaha World-Herald. "Berkshire will probably purchase more papers in the next few years. We will favor towns and cities with a strong sense of community."

Berkshire is the largest shareholder of Washington Post Co. (WPO) and purchased the World-Herald last year. Buffett said the company's newspapers won't "move the needle in terms of Berkshire's economic value" in the letter.

The newspaper industry, suffering from drops in print advertising, has recently embraced digital subscription plans. The New York Times Media Group began charging readers to access its news stories online last year, attracting about 454,000 paying subscribers as of last March. The so-called "paywall" is estimated to bring in $125 million next year for Times Co., according to Douglas Arthur, an analyst at Evercore Partners Inc.

Press+, a startup that sells online subscription technology, is used by more than 300 publications, including some owned by MediaNews Group Inc., Tribune Co., GateHouse Media Inc., McClatchy Co. (MNI) and Lee Enterprises Inc. Press+, based in New York, was founded by former Wall Street Journal publisher L. Gordon Crovitz, along with Steven Brill and Leo Hindery in 2010.

The billionaire investor said that newspaper editors should focus on making the papers "indispensable" to local communities.

"Our future depends on remaining the primary source of information in certain subjects of great importance to our readers," Buffett wrote. "Technological change has caused us to lose primacy in various key areas, including national news, national sports, stock quotations and employment opportunities. So be it. Our job is to reign supreme in matters of local importance."

© 2012, Distributed by NEWS CONSORTIUM.