Traditional media companies face tough choices these days.
Their core business is declining, but online operations aren't making up the difference — far from it. Firms risk "trading analog dollars for digital pennies," as NBC Universal head Jeff Zucker warned TV executives in 2008.
The (Harrisburg) Patriot-News is betting the terms of the trade can be better than that, and that it's better to shift sooner than later.
"We do not want to let pride and nostalgia get in the way of being where we need to be," publisher and president John Kirkpatrick said.
The Patriot-News and its sister company Pennlive.com announced last week they would merge to form PA Media Group. The Patriot-News will begin printing three days a week in January: Sunday and two days yet to be announced. Online news publishing will "intensify" and go to a 24/7 schedule, the companies said.
"We are moving to be where our readers and advertisers are," Kirkpatrick said.
To date, broadcasters and media publishers nationwide have had little success monetizing their digital efforts. They have launched websites, Facebook pages and Twitter feeds, yet digital in 2011 accounted for just 13 percent of newspaper revenue, 4 percent of radio revenue and 10 percent of television station revenue, according to the Pew Research Center.
The digital transition has hit newspapers especially hard. Consumers now look to free websites for coupons, car ads and classifieds. Print newspaper advertising revenue has dropped 50 percent since 2005, according to Newspaper Association of America data.
It's clear media companies have to make "bold moves forward" to meet the digital challenge, said Sara Glines, publisher of the York Daily Record/Sunday News.
The Patriot-News and Pennlive.com are part of New York-based Advance Publications Inc. Founded and owned by the Newhouse family, the company is becoming notorious for the aggressiveness of its print-to-digital transitions.
The Advance-owned Post-Standard in Syracuse, N.Y., unveiled a home-delivery cutback the same day as The Patriot-News' announcement. At the Ann Arbor News, Advance cut the newsroom staff and reduced the print schedule to twice a week. At the New Orleans Times-Picayune, Advance is reducing newsroom staff about 20 percent and printing three days a week, executive Steven Newhouse told the Poynter Institute, a prominent nonprofit devoted to journalism education, last month.
Advance's goal is to transition "to a model that has a chance to work and not ride down a model (that is) eroding rapidly," Newhouse said.
Advance says it has retained more than 80 percent of print ad revenues at its Michigan newspapers, according to Poynter Institute industry analyst Rick Edmonds. Even so, the strategy loses money without newsroom staff cuts, according to Edwards' "back of the envelope" calculations.
Staff cuts are expected at The Patriot-News, but the goal is to retain the same level of content providers and sales personnel as now, Kirkpatrick said.
Other media outlets are following Advance's experiment carefully.
"I applaud what they're doing," said the Daily Record's Glines, whose paper is owned by New York-based MediaNews Group.
"We will learn from them," she said.
Varsity will be impacted by The Patriot-News' decision, but on the Pavone side, "I don't think it will affect things as much," he said.
Plenty of advertisers still like Sunday newspapers, said David Taylor, head of Lancaster-based Taylor Brand Group. Losing four days of print will make some of them unhappy, "but there are so many other channels. They'll find a way to adapt," he said.
Digital has many of the same pitfalls for advertisers that it has for media companies. The sheer abundance of content keeps ad rates low and makes it tough to stand out, Taylor said.
In print, newspapers normally make money three days out of seven, said Curt Chandler, a senior lecturer in multimedia studies at Penn State. Sundays are the best, followed by two midweek days — the one with the supermarket inserts and the one with the weekend entertainment listings.
Advance's strategy, then, is to reduce printing to those three key days. Indeed, The Patriot-News' print editions "will look like three Sunday papers," Kirkpatrick promised.
The question is whether a three-day-a-week schedule can habituate readers as effectively as seven days have in the past. That's where the Patriot-News will be relying on its digital presence.
Generally, people bounce from print to online to mobile without thinking too much about it, Chandler said.
"Publishers worry about platforms," he said. "I think most of the time customers don't differentiate."
Pavone said his firm believes in using multiple media platforms for its campaigns, incorporating digital and social media because that's where the audience is. Relatively few people ages 18 to 34 read a printed paper, he said.
People tend to acquire their media consumption habits in early adulthood, Chandler said. Today's senior citizens grew up with newspapers, baby boomers with television and people in their 30s and 40s with the Internet.
Today, college students get news primarily from their smartphones, Chandler said. Music, too, he added.
"I can't imagine that I have a student that owns a radio," he said. "It's all streaming."
Online audiences are highly fragmented, said Pavone, a point Chandler also made. A newspaper audience can be thought of as a mix of niche audiences, Chandler said; the challenge online is to figure out which niches a given visitor belongs to and serve up the appropriate content.
Given the preponderance of revenue that comes from print, most newspaper chains view Advance's strategy as ahead of the curve, the Poynter Institute's Edmonds said. Whether it's "forward-looking" or "radical" depends on your perspective, he added.
Other papers are experimenting with various "metered" pay plans, he said.
"Maybe there will be a consensus two or three years from now" on which strategies work, he said. <
The Patriot-News is not the only Harrisburg media outlet making bold changes as it seeks its footing in the digital age.
Public radio station WITF-FM shifted to an all-talk format this summer, ending its daily classical music programming.
Studies of audience trends informed the NPR affiliate's decision, WITF President Kathleen Pavelko said.
Today "there are many more places to access the music of your preference," she said.
One has to accept that change never pleases everyone, Pavelko said. There's still a segment of the audience that either doesn't know how to access digital media or doesn't want to.
"Clearly, the younger the user, the more likely they are to prefer digital or online content," she said.
But the resistance of older cohorts can be overstated. In April, the number of people age 65 and older who use the Internet regularly exceeded 50 percent, she said.