Increasing numbers of young people and ethnic minorities are turning away from TV news, says media watchdog Ofcom.
BBC fear "lost generation" as numbers of young viewers fall
"There is strong evidence to suggest that they feel news of any kind... is of little current relevance to them," said the report.
Half of all 16 to 24-year-olds quizzed said they only followed the news "when something important is happening", with viewing limited to 40 hours a year.
Ethnic minorities also expressed disillusionment with TV news coverage.
Of those surveyed, 46% felt ethnic minorities are given too little airtime in mainstream news coverage, while Muslims complained the media linked them to extremism.
"Broadcasters have clear incentives to engage with disaffected groups," said the report by Ofcom, which suggested doing away with impartiality rules for all but the key public service broadcasters, in favour of more opinion-led bulletins.
It said the requirement for impartiality may have "fostered a middle-of-the-road culture" in mainstream news.
More than a quarter of young Asians favour the internet over TV for news coverage.
The BBC's deputy director general Mark Byford told Ofcom there was a danger of producing a "lost generation" who might never come to public service TV news.
"If we look at linear TV news: the young people increasingly don't touch it," he said.
In the Future of TV News report, Ofcom also addressed the growing threat to local news bulletins, thanks to economic forces
ITV currently spends £100m on news coverage in the nations and regions each year, but recoups just £15m through advertising revenue.
The broadcaster must maintain its regional news obligations until at least 2014, but the Ofcom report said that "new forms of regulatory intervention are likely to be needed to ensure its long-term presence".
Nonetheless, it found that viewers attach high importance to news from their local area, particularly those in Scotland and Northern Ireland.
Overall, 29% of viewers said they wanted to see more regional news on TV, while only 3% said they wanted less.