"I find that the best of the political bloggers are easily equal of the best opinion columnists at the New York Times," he said. "I don't see the added value there and I question whether newspapers should be paying large sums of money for that anymore."
Newspapers are charging for stale bread - a day old paper - while "giving away fresh bread for free," he said, citing PR guru Matthew Freud.
"I do think the media is going to be strongly impacted by citizen journalism, by citizen participation. I think the models that are going to be successful are hybrid models."
But, Wales said, not all newspaper content is being replaced by community reporting: "The basic nuts and bolts reporting ... what the local councils is doing, is something we're not seeing replaced by communities. It's really hard for people as volunteers, no matter how passionate they are to cover that sort of thing."
Wales' commercial arm, Wikia, separate from the non-profit Wikipedia and the Wikimedia Foundation, now has over 75,000 different communities and recently purchased a new stocks information site. Wikia has produced different sites "that are far more comprehensive than we could have produced with a top down publishing model," he said.
In its first three years Wikia's traffic doubled each year and it now ranks as the 75th most popular site on the internet, with over 25 million users each month. Its traffic now rivals that of the New York Times, he said.
"When I look at the things we're doing there ... it's really in a certain way replacing a lot of the traditional niche magazines," he said.
Wales' daughter, used as an example of an online consumer, likes the children's gaming Club Penguin Wiki site, he said. If there was an equivalent magazine with around 50-100 pages, she would be disappointed, he said, adding that on Club Penguin she would find thousands of pages.
"She expects to be able to get that kind of intense depth of information on the internet."
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