Barry Sussman, a Washington Post veteran who is president of Innovation’s board of directors, said the newspaper industry seemed to be on the rebound from the worst effects of the past year’s economic woes - "by and large, but not everyplace."

"If newspapers are going to do better economically, then they’re going to have to strive for stronger circulation, which means a better reporting job all around. We feel the 90 percent advertising model doesn’t work. What we should go for is a constant strong report, period," he said.

Timothy Balding, Director General of the World Association of Newspapers, said he understood Sussman’s point: "I suspect we may be on the eve of a new debate about content and quality."

This year’s report is available from the World Association of Newspapers (at http://www.wan-press.org/bookstore/trends.html):

  Rethinking Web sites. In the wake of the dot-com crash and last year’s slowdown, newspapers are struggling to turn their Web sites into profitable operations. An Innovation survey of 429 newspaper executives indicated that online revenues rose despite the slowdown, and 42 percent of the executives said their operation was breaking even or turning a profit. About 80 percent of the newspaper sites rely solely on advertising revenue, but newspapers are developing premium services that would be available on a pay-for-content basis.

  Coverage of terrorism. Mr Balding said newspapers demonstrated their strengths in the coverage of Sept. 11 and its aftermath - a statement that brought agreement from the Innovation analysts. In the report, however, Innovation noted that in the months before Sept. 11, the press was slow to recognize the threat posed by Osama bin Laden and his al-Qaida network. The report also faulted journalists in Europe for failing to draw attention to "widespread, daily acts of anti-Semitism" coming in the wake of Sept. 11.

  Multimedia newsrooms. The analysts hailed new interior designs that are drawing editorial teams into circles in the newsroom’s open spaces. Other features of multimedia design include mini-studios for TV broadcasts and streamlined digital photo stations. Just as important are new technologies such as XML document coding, which makes it easier to translate content into multiple formats.

  Rise of online infographics. Designers are creating online graphics that incorporate sound and motion to tell a story, to explain how a complicated contraption works, or even to turn the news into an interactive game. Innovation’s analysts see two trends to watch out for, however: a lack of coordination that could cause different teams to duplicate their efforts, and a tendency to convert print infographics without taking advantage of the online medium.

  "Less is more" newspaper formats. Innovation noted several newspapers that remade themselves in a more compact form, "where fewer pages make a big difference," said Juan Antonio Giner, Innovation’s founding partner-director. Downsized papers such as Spain’s AS, Britain’s The Business and the Dominican Republic’s El Caribe are easier to handle, less costly to produce, less dependent on advertising - and increasingly popular with readers, Giner said.