The study, by the Project for Excellence in Journalism, is intended to be the first of an annual look at electronic, print and online journalism.
It painted a picture of a business going through fragmentation and convergence at the same time. For example, Americans are turning to more and different sources for news, yet outlets are increasingly owned by a few giant companies.
More people are competing to tell stories but, as witnessed by the repetition of cable news networks, fewer stories are actually being told.
Others are usurping the traditional role of journalist as gatekeeper at the same time there's a need for it, said Tom Rosenstiel, the project's director. One recent example is how newspapers chased Internet and talk radio stories about John Kerry's alleged affair, which was later denied by all parties.
"We don't have one role any more," Rosenstiel said. "We have multiple roles, and it changes depending on the story."
The so-called old media — newspapers and television — are generally chasing smaller audiences, the study said.
Online, ethnic and alternative media are the only sectors seeing growth. The circulation of Spanish-language newspapers has tripled in the past decade, as English-language newspaper readership shrinks.
Much of the new investment in journalism goes toward distributing the news, not gathering it, the study said. Newspapers have about 2,200 fewer newsroom employees today than in 1990, and network TV news has cuts its correspondents by a third since the 1980s.
News companies may have been shortsighted in failing to invest in new strategies to reach their audiences, Rosenstiel said.
"Has the business of journalism been so good that it didn't worry about the long-term enough?" he asked. "Or is in some ways the old media — television and newspapers in particular — so mature that they are dying out?"
At the same time, the public is taking an increasingly dimmer view of journalists.
The number of Americans who think news organizations are highly professional shrunk from 72 percent in 1985 to 49 percent in 2002. People who feel journalists try to cover up mistakes rose from 13 percent to 67 percent in the same time, according to polling done by the Pew Research Center for the People and the Press.
Conservatives have long been suspicious of an alleged liberal bias in the press; now many liberals believe there's a conservative tint, Rosenstiel said.
Despite sobering statistics, Rosenstiel said journalists shouldn't be pessimistic.
"The notion that some of the old media are in decline is probably not true," he said. "It's just that the old version of the old media needs to change."
Increasingly, big companies are beginning to realize this. CBS News and The New York Times used to be in different businesses, he said, now they often compete with stories and images online.
"We are approaching the day where I may be watching Dan Rather on the telephone on the subway on the way home — not when he's on but when I choose to watch him," he said.
Even though it isn't established as a successful business model yet, Rosenstiel said he believes a company that invests substantially in original online reporting will eventually see that pay off.
The Project for Excellence in Journalism is affiliated with the Columbia University School of Journalism. The study was funded by the Pew Charitable Trusts.