MELBOURNE - Australia's Fairfax Media , publisher of some of the country's leading newspapers, will overhaul its top mastheads and slash almost one-fifth of its staff, the beginning of a widespread shakeup of Australia's media sector.

The media industry's old guard is struggling with a massive shift online, declining advertising revenues for newspaper and TV, and shrinking market share for free-to-air TV as consumers' choices multiply for news and entertainment.

Fairfax - which publishes the 181-year-old Sydney Morning Herald, Australia's oldest newspaper, as well as the Australian Financial Review and Melbourne's The Age - said it will cut 1,900 jobs over three years from its staff of 10,000.

It will also shut two printing plants and reduce broadsheet newspapers to tabloid formats as it refocuses towards online distribution.

"All the world's newspaper companies are experimenting with what sustainability looks like," said Margaret Simons, the head of the University of Melbourne's Centre for Advanced Journalism.

"There is no business model that can support the hundreds of journalists that are employed by companies such as Fairfax," she said.

In the United States, the Times-Picayune in New Orleans made headlines last week when it cut its print editions to three days a week, and in a conference call with analysts Fairfax said its options include a digital-only future if revenues continue to slide.

Trends in the United States point to even tougher times ahead, as the newspaper industry's efforts to boost digital revenue and cut costs fail to keep pace with declines in the print business, a Moody's report said this month, while online advertising sales growth is stalling.

Fairfax is considered vulnerable to a break-up or takeover, possibly by private equity, after its shares this month hit a record low below A$0.60 for a market capitalisation of A$1.4 billion (S$1.7 billion), down from A$7 billion five years ago.