The chaos at Fairfax, the exposure of the grand plans and upbeat statements as just so much spin, is more than just a sad story about a newspaper company. It is a generational moment in Australian journalism and public life — the moment when it became crystal clear that newspapers were no longer going to be the main, or most important, forum for serious journalism and public debate.

That does not mean that journalism and public debate will die. It does mean we are in the middle of a profound paradigm shift with implications for every aspect of our democracy. Things are still playing out, and will do for another decade or so, but the depth of the crisis is clear.

I am an optimist. I believe there is catharsis. But for now, let’s talk newspapers.

I am not saying they will die. And I know they still employ some fo the nation’s most talented journalists. But anyone who has been kidding themselves that everything would somehow be okay in the long run now needs to face up to the fact that we are looking at enormous change. Newspapers, if they survive at all, will be less important, smaller in circulation and more limited in purpose. We will need something else as well of and instead of newspapers.

I wrote in my blog this morning that newspapers would not recover from the global economic downturn. There were already fundamental problems with the business models. The level they reach through the next two years will be the level they decline from, rather than the level from which they bounce back.

Fairfax, because of its heavy reliance on classifieds that are fast disappearing to the internet, has been at the pointy end of the problems. Cack-handed management over nearly twenty years, and particularly in the last ten years, has sped the decline.

There were other possibilities for Fairfax. A decade or more ago, it could have chosen to invest heavily in quality content, and become known for delivering that both to individuals and other media, rather like a quality press agency. Even a couple of years ago at the time of the Rural Press takeover, it could have chosen to capitalise on its position as the only major media company (other than the ABC) with true depth of local and regional presence to provide both niche local content and a view of the nation like no other.

But by the time of the Rural Press takeover, it was probably already too late — and the truth is that there was never any sign that either Rural Press or Fairfax management actually understood the core business — journalism. Now that no longer is the core business of Fairfax.

And the truth is that all these options would have meant reduced profitability, and that is not something a publicly listed company, where the executives are rewarded on profit performance, can ever, ever say to its shareholders. The truth is that our publicly listed media companies are not able to carry out the depth of experimentation that will be necessary to find new models for journalism.

There will be plenty of others around to tell Captain Kirk everything he and his predecessor, Fred Hilmer, did wrong.

But there is a bigger structural issue here. History tells us that those who dominated business based on one technology rarely or never manage to dominate the replacement technology, when it comes along. Even if Kirk had been a management genius, that would have been a hard reality to overcome.

Fairfax Media may well survive as a company. Kirk’s legacy is the diversification away from newspapers and into internet advertising sites such as RSVP and so on, as well as radio. These mean that Fairfax Media is unlikely to disappear, but it is unlikely to be the home of premier Australian journalism in the medium and long term.

The Australian newspaper will continue, at least while Rupert Murdoch and his mother survive, but its long-term fundamentals are really no healthier.

Yet, and this is the bright spot as well as the tragedy, there is absolutely NO EVIDENCE of declined appetite for serious journalism. Total readership figures, including online, are up. Consumption of news has never been so high. Seeking news and information is a fundamental human need. We need to keep this firmly in view, because for those of us who care about journalism, it is the foundation of hope.

What the internet makes clear is that the linking of news with Big Media is a modern phenomenon, based on the invention of the printing press and the broadcasting technology that came after the printing press. Now the internet has loosened that linkage. We have advertising sites that do not include journalism.

We also have sites that contain news, and opinion, but little or no advertising. I am not only talking blogs. There are now numerous Australian internet-based journals carrying quality content, some selling ads, others not, some covering their costs or arising out of the research and thinking done in the university communities.

Is this enough? No. People underestimate the importance of journalistic skills. Finding things out is hard and dirty work, and eventually if you want to uncover important stories, people will have to be paid to do it — experienced, mid life people who, while they might not expect to get rich, will need to pay their mortgages.

New business models will arise. They already are arising.