The challenge newspapers must meet immediately is to find more revenue on the Internet, according to the Project for Excellence in Journalism's study, called "The Changing Newsroom: What is Being Gained and What is Being Lost in America's Daily Newspapers."
Newspaper managers need to "find a way to monetize the rapid growth of Web readership before newsroom staff cuts so weaken newspapers that their competitive advantage disappears."
Stories are shorter overall, the study found, and staff coverage tends to focus on local and community news.
"America's newspapers are narrowing their reach and their ambitions and becoming niche reads," the study said.
Even when foreign and national news makes it into the papers, it is being relegated to less prominent pages.
"To make the front page, it has to be a significant development or a story that we can see through Florida eyes," said Sharon Rosenhause, managing editor of the Fort Lauderdale-based South Florida Sun-Sentinel and a longtime newspaper executive.
The reasons for the newsroom cutbacks are well known: Newsprint costs have jumped, and advertising and circulation revenue have quickened their descent this year as advertisers follow readers online. Newspaper Web sites capture only a small fraction of the revenue lost as they sell fewer print ads, which fetch more money.
"The seams and threads are beginning to show in U.S. journalism even though newspapers are by far the greatest source of news," Lou Ureneck, chairman of the journalism department at Boston University, said Friday.
The PEJ study surveyed senior newsroom executives at more than 250 newspapers and interviewed editors at papers in 15 cities to document the way these cuts have affected newsrooms and the quality of their product.
The results show that papers carry fewer stories on foreign and national news and devote less space to business, science and arts reporting, and many have reduced the crossword puzzle and eliminated television and stock listings.
Many editors said they must ask reporters to cover more beats, reducing their ability to produce authoritative stories. Others said, in what may create a vicious circle, that staff cutbacks reduce their ability to shape coverage to fit their communities' needs, and Ureneck said that coverage is shrinking.
"This is a strategic move not driven by lack of demand but (by) a revenue model that is broken," Ureneck said.
Still, 56 percent of the editors surveyed said their news product is better than it was three years ago because coverage is more targeted.
"There's an improvement in enterprise, in investigations and in the coverage of several core beats," the study quoted an unnamed editor of a large metropolitan daily talking about his staff's coverage, not the makeup of the paper overall.
Local news is "very essential" to their product, according to 97 percent of editors surveyed, and they said that's where they're putting a larger share of their shrinking resources.
"They are giving a greater piece of a smaller pie to local news," Ureneck said. That makes sense because where they can "develop the most expertise and strongest bond with readers is covering the local community."
The newsroom is much younger than three years ago, and reporters are more technology savvy and able to meet the demands of print and online stories, according to the study.
Editors once leery of producing content for the Web are increasingly embracing its potential to diversify readership and improve journalism, even if it sometimes saps print resources.
"Editors feel torn between the advantages the Web offers and the energy it consumes to produce material often of limited or even questionable value," the study said.
The Web speeds delivery of news, allows interaction with readers and opens nearly infinite space for news.
"The downside is that is has eroded the advertising base in print publications, and that is by far the main source of revenue to pay for large news staffs," Ureneck said.
Editors see the ability to track readership of any specific story online as an advantage for improving content. It provides an "indisputable link between strong editorial content and the kind of higher readership that attracts advertisers," the study said.
The editors, 97 percent of whom said they are active in trying to develop new revenue streams, can then convince the advertising sales staff to become more targeted in selling to the Web.
Many said, though, that they were uncertain improved editorial content would ensure a bright future - especially since most organizations failed to anticipate the changes that have wracked newsrooms in recent years.
Only 5 percent of the editors surveyed said they were confident they could predict what the newsroom would look like in five years.
"I feel I'm being catapulted into another world, a world I don't really understand," Virginian-Pilot editor Dennis Finley told PEJ. "Things are happening at the speed of light."
The results of the survey, conducted online by Princeton Survey Research Associates International between Jan. 29 and Feb. 29, include responses from over 50 percent of U.S. papers with 100,000 or more in circulation and more than 30 percent of papers with 50,000 to 100,000 in circulation.