The traditional news media in the US are in a state of turmoil. Some of the biggest newspaper chains - first Knight Ridder and now Tribune Company - have put themselves up for sale. Network news broadcasters are slashing their budgets, the latest and most savage example being the cuts heralded by NBC Universal two weeks ago. No wonder there is a siege mentality in newsrooms around the land. Investors seem to be concluding that this is an industry with no future.
As is often the case, though, the mood swing has gone too far. It is true that revenue growth is stagnating, as readers and viewers spend more time with digital media and advertising is spread across a wider range of media outlets. Even among an older audience readership is falling: 10 years ago, 70 per cent of Americans aged 65 or more were regular newspaper readers, whereas the figure today is 58 per cent.
But these are still very profitable businesses. The US newspaper industry boasts daily sales of 55m copies, profit margins well into double digits and strong cash flows. There are indications that the long-term decline in readership may have stabilised in recent years and most people use the internet as a supplement, rather than a substitute, for newsprint.
So the big question is not whether the traditional news media will continue to exist in the foreseeable future. Most of them clearly will. But what kind of service will they provide to the public as they adapt their business model - and with it their editorial content - to a much more competitive environment?
With a few exceptions, the big newspaper publishers in past decades operated in metropolitan or regional markets and were not accustomed to head-on competition. Back in the early 1980s, the three network news broadcasters shared a combined audience of around 60m for their nightly shows, more than twice the current figure, and provided a shared experience for American families - a "nightly national seance" in the words of one contemporary.
This was a profitable world in which it was possible to run enormous editorial budgets, with large numbers of foreign correspondents for even quite modest metropolitan dailies. Most newspapers were privately owned, free from the pressures of the stock exchange. Owners were driven as much by civic pride and political influence as by the bottom line.
Competition is changing all that. The television networks have closed down most of their expensive foreign bureaus and have become subsidiaries of much bigger businesses that are driven in good measure by the need for quarterly earnings progress and an unsentimental view of the news business. The result is that viewers have a lot greater chance of learning about the latest health fad than about what is going on in Putin's Russia. There are plenty of willing buyers for newspapers. But most new owners will want to maximise their returns rather than take a broader view of their public role.
Here is the worry. It is true that the new digital media have made available an extraordinary cornucopia of information and ideas for those people who want to look for it. But what about those people who are not willing or not capable of making the effort?
A few decades ago, you could hardly avoid exposure to the network news or the daily paper. Today, you can find a myriad of other forms of entertainment. There is already evidence that Americans with relatively modest educational attainments are simply tuning out of the news altogether. A quarter of all Americans with a high school education or less take in no news of any kind - online or otherwise - on a typical day.
In an effort to catch their attention, news publishers are becoming more partisan and more strident. The Iraq war has not been a triumph for judicious journalism. The early stages were presented as a cross between July 4 and Halloween with flags fluttering, martial music, and no unpleasant images of mayhem and death to disturb the viewer. Some senior reporters were compromised by their unwillingness to challenge the White House line.
In today's competitive environment, what commercial interest would a news publisher have in seeking to interest a poorly educated and uninterested person in what is happening in the world? And will market forces, left to themselves, be enough to support that vital component of democracy - an informed citizenry?
The writer is director-general of the CBI, the UK employers' organisation. This article is based on the annual Wincott Foundation lecture.