Has hell frozen over? Will pigs swoop past your window? The Pulitzer Prize board has deemed The National Enquirer a legitimate contender for its coveted prize in journalism, after the staple of supermarket checkout lines broke the news of the John Edwards scandal. This unexpected announcement is just another sign that traditional media must change or die.

Just another death rattle?
Back in 2008, the Edwards story hit the mainstream only after Disney's (NYSE:DIS) ABC aired an interview in which the former Presidential contender admitted his affair. In the aftermath, companies like The New York Times (NYSE:NYT), CBS (NYSE:CBS), and Washington Post were left looking like a bunch of losers, scooped by a supermarket tabloid.

To its credit at the time, News Corp.'s (NYSE:NWS) Wall Street Journal admitted that Internet sources like The Drudge Report, Washington Post's Slate, and the Huffington Post "recognized the possibility the [Edwards] story might be true and questioned the old guard's inaction." Meanwhile, the titans of that old guard largely greeted the Enquirer's scoop with scorn and disbelief. That may be understandable, but underestimating even a seemingly nutty and inconsequential underdog can be fatal for any industry.

There are ample reasons why the Enquirer gets so little respect; in particular, it's known to pay its sources, which is frowned upon in journalism for good reason. Still, that practice hasn't kept the tabloid from breaking several big stories. The Enquirer also reported on the possibility that Tiger Woods was messing around right before the fateful SUV accident that started that particular media frenzy. Other wins under its belt over the years include true dirt on the O.J. Simpson case, Jesse Jackson, Gary Hart, and Rush Limbaugh.

A wakeup call for big media
The world will seem strange indeed if The National Enquirer wins a coveted Pulitzer. Could The Weekly World News win next year, for providing conclusive proof of Bat Boy's existence?

The death of journalism at supermarket tabloids' hands may be a horrifying prospect for anyone nostalgic for old-school news. But if they want to survive, even venerated industries must keep their arrogant and myopic tendencies in check, and remember how to aggressively compete. A prestigious masthead can't compensate if these companies fail to gather high-quality news. As the Enquirer's bid for a Pulitzer makes clear, upstarts can emerge where you least expect them.

Even if viewers increasingly reject broadcast TV and newsprint in favor of the Internet -- a much bigger threat to traditional media than supermarket tabloids -- there's still hope for journalism.  Companies like Google (NASDAQ:GOOG), Amazon.com (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) can help media businesses reach audiences through platforms such as Google News, the Kindle, or the iPad, not to mention social networking sites like Facebook.

I'm not alone in my belief that journalism itself isn't dying. The only endangered species here are media companies that underestimate real competitive threats. Investors need to beware any lumbering dinosaur of a business that can't keep an eye out for hungry, nimble predators.

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool's disclosure policy is not, we repeat, not Elvis's space alien love child.