Democracy needs a strong media, but the leak of News Corp's financial statements last week reveal the age of the press barons may be in its final phase, writes Ian Verrender.

Kim Williams is a man of contrasts; erudite but explosive, a talented classical musician who instead turned his hand to successfully running huge organisations with brutal efficiency.

Almost a year to the day since his ignominious removal from News Corp, he again has been thrust into the limelight for two reasons.

The first is his book, an eagerly awaited tome due for release this week, that no doubt will document his life at the top of the News Corp juggernaut.

And the second was last week's startling revelations on website Crikey about the alarming erosion of cash from the media group's major Australian titles, a coincidence that many at his former employer found somewhat irritating.

It was tremendous fodder for rival Australian media groups that for generations have routinely gone to war, with proprietors occasionally even resorting to fisticuffs.

Having been on the receiving end of an unrelenting torrent of negativity from News for the past few years over its financial performance, Fairfax relished the opportunity for retaliation.

But the documents - a set of accounts that lay bare every painful detail of the Australian arm of News Corporation - tell a bigger story about the demise of traditional media, beg questions about whether the nation's biggest news group is prepared for the financial onslaught and raise concerns about whether democracy could be properly served in the absence of mainstream media.

The immediate reaction from News chief executive Julian Clarke, broadcast through the company's various outlets, (on top of threatened legal action against anyone who used the data) was that the numbers were 14 months old and that things had since improved.

Williams also copped his share of the blame for the results.

Odd then that just a fortnight ago, the company's own accounts to the stock exchange revealed a further 18 per cent deterioration in Australian newspaper revenues.

Although perfectly in character, the company's response reeked of delusion.

If the raw numbers were shocking enough - The Australian lost $27 million in 2012/13 - even more alarming was the extent to which News Corp executives had miscalculated the speed of the decline.

Almost every title missed budget by a country mile. The Australian, for instance, had budgeted on a $7.56 million loss. On a group basis, advertising revenue, while still substantial, was evaporating at a rate of $1.8 million a week.

Until the newspaper assets were hived off from entertainment last year, (News Corp and 21st Century Fox are now separate companies), the decline in the News Corp's traditional print business had been masked by the ballooning income from cable television and movies.

That protection no longer applies.

As a result, News is about to experience the same primal forces of change that have swept through more exposed rivals such as Fairfax with devastating force in recent years.

Fairfax insiders concede that until a year ago, the company's future was touch and go. Its most recent results - a $224 million profit after years of losses - was down to improved income from its real estate website Domain.

Critics now lament with an air of disdain that the once great Fairfax these days earns its money from events, dating services and flogging whatever it can for a commission.

There's no denying that. But here's the rub. Journalism doesn't make money. In fact, you could argue it never did.

Every Friday night, a long line of punters would line up at the loading docks of The Age and The Sydney Morning Herald to collect a first edition paper. And while we smugly believed they were there to feast their eyes on our erudite opinions and fabulous reportage, the truth was far less edifying.

They were there to get their hands on the weekend classifieds, to get a jump on other car buyers.

News and advertising were always two discrete businesses. The newspaper itself was simply a conduit, a distribution channel, a pipeline. And since the internet severed the nexus between the two, news gathering has been forced to rapidly transform itself into a standalone enterprise.

The problem is, news gathering is hugely expensive. And no one wants to pay, let alone pay enough for the news business to be a money spinner.

In a digital world, advertising inventory is unlimited. The barriers to entry are minimal.

Online news services attract an audience and hence attract ads. But it is at a vastly discounted rate, and it doesn't raise nearly enough to generate the kind of returns stock investors demand.

In any other industry, a rational businessperson would jettison their high cost, low revenue operations and stick to the bits that make most money, just as BHP did a decade and a half ago when it shut down or hived off its steel operations.

Rupert Murdoch would never consider such an option. The Fairfax board and its chief executive, Greg Hywood, wouldn't either, as they continually look for ancillary businesses to support the company's news gathering services.

But Murdoch won't be around forever and the sentimental attachment will go with him. Make no mistake, there are major shareholders of Fairfax who for years have been advocating for a break-up, for the company to ditch journalism and expand its online advertising sites.

Seek.com, Carsales and REA. In just a decade, they have stolen Fairfax's rivers of gold and each of them now outrank Fairfax in terms of market value.

The situation is no less dire for free-to-air television networks. They have suffered from the same drain of advertising dollars as print, although not to the same extent. And in an era when viewers can download programs at will, direct from the production house, the future for free-to-air networks is challenging to say the least.

This has all come about as public broadcasters, such as the ABC, are under funding pressures. Governments are reluctant to tip taxpayer cash into an industry in such a state of flux and where commercial operators who still wield vast political influence agitate for the elimination of any serious competition.

Democracy needs a healthy and free media but the age of the press barons already may be in its final phase.

There are some who argue that mainstream media already is dead, that social media outlets like Twitter and specialist news sites with tiny teams of reporters are filling the void. Maybe that's true.

One thing is certain. Any mainstream media group that believes it is above, or immune to the crisis engulfing the industry is an organisation that is likely to imperil its own future.

It is a message Kim Williams forcefully conveyed at News.

Ian Verrender is the ABC's business editor. View his full profile here.