By Ted Nesi

PROVIDENCE, R.I. (WPRI) – A growing number of contracts for printing and distribution gave The Providence Journal a slight bump in revenue during the first half of this year despite a deep drop in springtime advertising revenue.

The Journal’s total revenue rose to $46.7 million during the six months of 2012, an increase of $597,000 or 1.3% compared with the first half of last year, according to a Securities and Exchange Commission filing this week by its parent company A.H. Belo.

The share of total Journal revenue that came from advertising fell below 50%, a symbolically important milestone in light of newspapers’ historic reliance on advertisements to pay the newsroom’s bills. Printing and distribution contracts’ share of revenue jumped to 13% and circulation accounted for 37%.

The Journal is one of many papers with a changing revenue mix, said Ken Doctor, a media analyst with Outsell. “All are seeing rapidly increasing percentile contributions from circulation – or what we should call reader revenue,” he told WPRI.com. “Projo is at the leading edge of change, probably due more to ad decline than [its] digital circulation program.”

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By Ted Nesi

PROVIDENCE, R.I. (WPRI) – The Providence Journal’s finances brightened during the first three months of this year, as the paper used higher circulation revenue and more third-party printing work to offset another sharp drop in advertising.

The Journal’s revenue totaled $22.7 million in the three months ended March 31, up 3% from $22 million in the same period last year, according to a regulatory filing. That performance helped offset weakness elsewhere within its Dallas-based parent A. H. Belo, which said companywide revenue slid 7% in the first quarter.

The Journal’s first-quarter contract work nearly doubled to $2.8 million year-over-year as the paper distributed more national and local newspapers and landed new commercial printing jobs. The paper’s circulation revenue also posted a healthy gain of nearly 6%, rising to $8.6 million.

Advertising is no longer the bedrock of The Journal’s business that it once was, contributing only 49.5% of total revenue in the first quarter. Ad sales through March 31 fell to $11.2 million, down nearly 10% from a year earlier, with declines in all categories. Digital advertising on ProvidenceJournal.com slipped 7% to $1.5 million compared with 2011.

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Josh Fenton has opened the kimono at GoLocalProv and offered a peek at the startup news site’s strategy.

In two separate articles on NetNewsCheck, Fenton declined to disclose the numbers everyone wants to know – revenue and profit – but said GoLo “went functionally cash flow positive in Providence after about eight months” and is benefitting as advertisers shift their spending from print to digital.

According to Fenton, GoLo gets an average of 115,000 unique visitors a month; its dominant demographic is women between the ages of 30 and 50; it has 10 full-time employees; nearly half of its revenue comes from display advertising; and 20% of its unique visitors arrive via social media.

“You have to get to a point where you’re competing for the news cycle,” Fenton told NetNewsCheck. “That has always been our strategy – to invest in the level of reporters and research that allows you to break the biggest stories in the marketplace.”

Fenton also pointed with pride to the fact that GoLo doesn’t subscribe to a wire service such as The Associated Press. “There’s no third party content on our site,” he said.

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Advertising sales at The Providence Journal plunged by more than 60% over the last six years, forcing Rhode Island’s top newspaper to eliminate a third of its work force and to rely increasingly on subscribers and printing contracts to pay the bills.

The Journal’s total revenue dropped for a sixth straight year in 2011 to finish at $95.1 million, down 5% from 2010 and off 43% since 2005, parent company A.H. Belo disclosed in an SEC filing. Lower advertising and circulation sales were partly offset by $3 million in new printing and distribution contracts.

Journal publisher Howard Sutton declined to comment on the results. “The printed Journal has adapted to changing times, intensifying its focus on local and regional news and carefully managing its cost structure to match lower revenues,” A.H. Belo CEO Robert Decherd wrote in an op-ed on Feb. 26.

The Journal sold $52.9 million worth of advertising in 2011, down 11% from the prior year, with retail, preprint and digital lower but classifieds higher. Advertising has fallen a dizzying 61% at the paper since hitting $136.5 million in 2005, though last year’s percentage decrease was the smallest since 2007.

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The Providence Journal will start charging online readers Tuesday, doubling down on its strategy of selling a digital replica of the print edition rather than using an HTML-based paywall like those of The New York Times and The Wall Street Journal.

The Journal said it will create 10 subscription tiers on Tuesday. A seven-day digital-only subscription will cost $208 a year for the Web and iPad e-editions or $192 a year for the iPad e-edition alone through Apple’s App Store. A seven-day subscription to both the print edition and the e-edition will cost $416 a year, unchanged from the current price, effectively making it free to current subscribers. A weekend print subscription with seven-day digital access will cost $312 a year.

The Boston Globe charges the same price – $208 a year – for digital access to its new website without a print subscription. The New York Times charges $195 a year for full access to its website and smartphone apps.

The Journal’s new e-edition designed by Olive Software has been available as a free trial since Oct. 17, when the paper launched its new website, which also offers brief blog items and sports stories for free. The paper’s online traffic has declined 33% since the new site debuted. The paper has not created iPhone or Android apps and did not say whether those will be added.

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the new Rhode Island's Future

It’s back to the future for Rhode Island’s Future.

The lefty website that was an influential voice of opposition to the Carcieri administration will return to its roots on Wednesday by debuting with a new look and a commitment from 15 contributing writers to reenergize the blog, which fell all but silent last year.

“There is this ephemeral image of Rhode Island being this bastion of liberal policy,” Brian Hull, who bought Rhode Island’s Future in August 2009, told WPRI.com. “Sure, everyone’s a Democrat, but that doesn’t mean everyone’s a liberal. Now RIFuture is coming back to actually have that strong liberal voice that’s been missing.”

With Hull busy as a student at Harvard’s Kennedy School, Rhode Island’s Future became a ghost town in 2011, rarely updated except for occasional scattered posts, some anonymous, and event announcements. It was a far cry from the consistent commentary that marked the site in its heyday under founder Matt Jerzyk or that still happens at Anchor Rising.

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The press corps at Rhode Island’s State House just got a little smaller.

The Newport Daily News will not send longtime political reporter Joe Baker to Providence to cover this year’s session of the General Assembly that began Tuesday for the first time in memory, WPRI.com confirmed on Thursday. Baker, who joined the paper in January 1984, is no longer writing his political column but remains on staff.

Daily News editor Sheila Mullowney minced no words about the decision, describing it as a disappointing move and one of a number the paper’s parent company is making to deal with the financial challenges facing print media. She said she hopes the absence of a Daily News reporter at the State House is only temporary.

“We feel right now we can’t afford to send somebody to Providence during the session,” Mullowney, a former president of both the Rhode Island Press Association and the New England Associated Press News Executives Association, told WPRI.com. “It’s unfortunate. It’s not an easy decision to make.” Senate President M. Teresa Paiva Weed herself is from Newport.

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After spending much of this year covering Rhode Island’s debate on the topic, staffers at The Providence Journal now face a “pension puzzle” of their own – whether to accept a corporate buyout, and the retirement benefit that comes with it.

The Journal wants eight employees to agree to buyouts by Friday, and their union says those who do will be eligible for a pension next year. But the pension plan itself is significantly underfunded, and the benefit on offer has changed significantly over the past decade, particularly for younger employees.

Projo parent company A.H. Belo’s two pension plans were 64% funded as of Dec. 31, 2010, with an unfunded liability of $132.4 million, SEC filings show. Experts say government pension plans should be at least 80% funded, and the federal government requires private ones like A.H. Belo’s to inform beneficiaries if their funding dips below the 80% benchmark.

To put the 64% figure in perspective, the Rhode Island pension system’s funded level rose from 48% to 60% after the new law was signed last month. All but seven of the state’s 24 cities and towns with locally run pension plans are worse-funded than A.H. Belo’s, but its $132 million unfunded liability is bigger than all but three of theirs; it’s roughly the same shortfall as Pawtucket faces.

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The Providence Journal has offered eight buyouts to its employees and may cut more positions depending on the level of interest in the offer, a union official said Friday.

The staff reductions will be the first cuts to The Journal’s newsroom since multiple rounds of layoffs in 2008 and 2009. They come as the paper prepares to begin charging next year for its new website, which debuted Oct. 17. The news was first reported by Scott MacKay of Rhode Island Public Radio.

The Journal is looking to cut one reporter, one copy editor, one photographer and one editorial assistant, plus four advertising representatives, said John Hill, president of the Providence Newspaper Guild. Employees in other jobs have been encouraged to apply for a buyout if they’re interested in leaving, he said.

“The impression we’re getting is there’s a dollar amount in terms of the total amount of savings they want,” Hill told WPRI.com. Layoffs will take place if the company doesn’t reach its goal and are decided by seniority, he said. The Dallas Morning News, its sister paper, reportedly laid off 38 newsroom staffers in September.

Journal employees have until Dec. 16 to decide whether to agree to a buyout, which Journal insiders described as less generous than previous offers. They would remain on the payroll until Dec. 30 and be eligible for a pension from the newspaper in 2012.

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Anchor Rising’s Justin Katz, never one to join the popular throng, thinks The Journal, yours truly and other members of the Rhode Island press corps swallowed state officials’ preferred line on pension reform hook, line and sinker:

Wouldn’t it be reasonable — no, obvious, obligatory — at least to wonder out loud whether there might be something more going on here than the advertisements and political speeches proclaim? I mean, not only does Paiva Weed have union officials on her leadership team, but they voted for the bill. Senate Majority Leader Dominick Ruggerio (D, North Providence, Providence), who exchanges nepotism jobs with his fellow high-paid union leaders, voted for this pension reform bill. Why does it feel like Anchor Rising is the only outlet in Rhode Island concerned that maybe, just maybe, there are some major catches built into this reform — perhaps so dramatic that the actual “reforms” were boards on a Trojan horse?

Justin is entitled to his opinion, and I take his critique seriously; I was reading Anchor Rising long before anybody was reading me. I suppose it’s possible the pension law is a finely crafted mirage, a major policy shift at first glance that turns out to be just a Band-Aid which “fell well short of where it should be,” in Justin’s words. But as one of the reporters who covered this debate most closely, I don’t think that’s the case.

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A top executive at The Providence Journal’s parent company says he’s hopeful a shift toward getting more money from subscribers and less from advertisers will help its papers weather the storm.

“We don’t have an audience problem,” Jim Moroney, publisher of the Dallas Morning News, told students and faculty at the University of Texas at Austin last week. The problem is the failure of digital advertising revenue to match the rates the company gets for print. “Advertising is not a dependent source of revenue going forward,” he said.

The share of the Projo’s revenue that comes from advertising sales has fallen from 82% in 2005 to 56% in the first nine months of this year, according to SEC filings. Circulation’s share rose from 17% to 36%, and the paper has also been signing more printing and distribution contracts. Moroney cited similar trends at his paper in Dallas.

But the print edition remains vital. Moroney said ads on DallasNews.com would generate a maximum of $14 million in annual revenue at current rates, compared with roughly $90 million from print circulation.

The newspaper business is in “a transition and that’s hard,” he said. A video of Moroney’s presentation is posted after the jump.

• Related: Full Projo paywall set for 2012 as advertising sales slump 11% (Nov. 3)

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First, a disclaimer: I want newspapers to survive, both because I have a lot of friends who work for them and because they still make up a significant chunk of most communities’ journalistic backbone.

That said, there’s a reason a lot of young writers are bailing on newspapers, and Ben Huh gets to the heart of it in this piece for The Washington Post. I don’t agree with everything he writes, but this part is spot on:

Gene [Weingarten] is confusing journalism with the business of newspapers. Journalism is thriving, thanks to cheap and easy means of publishing like WordPress, the huge interest by the readership, and increase in the diversity of opinions. Sure, the new journalism may not look like the journalism of yore, but society isn’t under threat from the lack of journalism. Newspapers, however, are continuing to see declines as the readership shrinks due to an age demographic, inconvenience of print, and shrinking budgets. …

What’s killing newspapers isn’t the lack of new ideas, it’s people who obstruct the change that’s required to survive.

Read the rest here. (Fittingly, I wrote this post in WordPress.)

Update: And this piece by Alexandra Petri, which Huh references, is a great take on what it’s like to be a young newspaper reporter today, asked “to write a story and then produce an interactive personality quiz photo gallery for it using JavaScript, which is noble but not quite how we pictured things. ‘You are under 30, so this is your metier, right?’ they say, hopefully. ‘Absolutely,’ we murmur. ‘And tweet more!’ ‘Sure!’ we say.”

GoLo’s story this morning about the apparent demise of the Ocean State Policy Research Institute raised another question: How will it impact former WLNE-TV reporter Jim Hummel’s two-year-old investigative news site, The Hummel Report?

It won’t, Hummel told me.

“We haven’t missed a beat and nobody has really noticed, except if you go to our website the OSPRI references have been removed,” Hummel said. “And I want to make this very clear: My loyalty is solely to [OSPRI founder] Bill Felkner,” who is the site’s director of operations.

OSPRI never provided any financial support for The Hummel Report, he said. What it did provide was Felkner’s time and technical expertise; a platform for his daily email roundup; and a website where transparency-minded viewers could find documents, contracts and other records.

The partnership between the nonprofit Hummel Report and OSPRI, which dates back to the site’s founding in October 2009, “was solely an outgrowth of my relationship with Bill Felkner,” Hummel said, adding that he has always had sole editorial control. The site also has partnerships with WPRO and Motif magazine.

Funding for The Hummel Report has come from two wealthy donors – businessmen Alan Hassenfeld and John Hazen White – along with individual contributors, Hummel said.

“Bill has done so much for The Hummel Report that people will never see and that’s why my loyalty is with him,” Hummel said. “We have been through this thick and thin in the past two years.”

Nieman Journalism Lab’s Joshua Benton offered up an interesting take last week on a new FCC-commissioned paper that revealed “miserably low levels of online news consumption” in cities across the country. According to the paper, the top local news site in a typical U.S. market reaches just 18% of local Web users each month, and those people only spend about five minutes on it. That’s five minutes a month.

For somebody who spends his days churning out local news, those statistics are a little disheartening. But Benton went on to make this solid point:

If raw readership totals equaled impact — on political discussion, on democracy, on the culture — then USA Today would be more important than The New York Times and Reader’s Digest would be more important than The New Yorker. Reaching the “right” people — and by that I mean the people who have disproportionate influence in political discussion, democracy, or culture — can make an outlet’s reach more potent than traffic numbers would suggest.

So for sites like MinnPost or Voice of San Diego, which write extensively about politics and local government, it’s possible to be both a must-read in the corridors of City Hall or the statehouse and still reach an audience that’s disproportionately influential.

My humble outpost here on WPRI.com operates along the same lines. I realize the vast, vast majority of people have never heard of Nesi’s Notes, let alone clicked on it, and the chasm is beyond enormous compared with the hundreds of thousands who watch a local newscast or pick up the paper on any given day. On the other hand, I know from my emails and phone calls that the people who do read the blog include a lot of movers and shakers in politics and media. Who knows? Maybe a really sweet chart will help them do their jobs better.

Like any writer, I’d like to have the biggest audience I can. But I’m also realistic. In the fragmented media landscape of 2011, nobody is going to have the reach the Projo did back in 1960, when one paper was sold for every four Rhode Islanders. But hopefully, if you do good work and engage in a little shameless self-promotion, you can put together a quality readership that finds value in what you do. Plus, as Barry Ritholtz suggested a few months back, such a group could be extremely desirable to advertisers.

Not that there aren’t downsides to this trend. A veteran observer of Rhode Island politics mentioned to me recently that she worries about the local media landscape becoming a closed ecosystem, with insiders writing for other insiders. That could lead to a hermetically sealed conversation that excludes unorthodox thoughts from the public discussion. And it raises concerns about democracy, since most citizens won’t be engaging with the information influencing their leaders. I’m not sure what can be done about that, beyond being on guard for it.

Anyway, those are my two cents. Now back to your regularly scheduled non-navel-gazing.

(photo: Ben Sutherland/Flickr)

Now here’s an example of news with no gimmicks from Rhode Island Suburban Newspapers’ Kent County Daily Times:

That may not be perfect SEO bait, but I’m pretty sure I know exactly what each story is about.

Sunday’s Providence Journal included the announcement that the paper has appointed Deborah Tomilson as its “divisional vice president of audience, business development and digital.”

(In classic corporatese, the next sentence said Tomilson’s job will involve “an emphasis on audience and business development” – a bit redundant considering those two nouns are in her title, no?)

It sounds like Tomilson, who comes from the advertising side of the paper, should be playing a key role in crafting the new Projo.com and its paywall, which are supposed to debut later this year. The announcement said Tomilson “will manage the strategy, development and operations of the website as well as the newspaper’s presence on emerging digital platforms and devices.”

This may be more of a change in title than responsibility, though; the last time Tomilson was promoted, in 2009, she was dubbed “vice president of business and interactive development,” which doesn’t sound too different from “vice president of audience, business development and digital.”

Speaking of newspaper paywalls, New York Times media reporter David Carr offered a personal defense of his employer’s new plan over the weekend that’s worth a read.

The Providence Journal is a much smaller business today than it was half a decade ago.

The Journal’s total revenue dropped for a fifth straight year in 2010 to $99.9 million, parent company A.H. Belo disclosed in an SEC filing late Friday – the lowest amount in at least 15 years and perhaps far longer than that after adjusting for inflation.

The $99.9 million total was off 40% from 2005, when the paper booked $166 million in revenue. Its annual revenue was $125 million back in 1995, archived SEC documents show.

The Journal’s advertising sales plunged by more than half between 2005 and 2010, from $137 million down to $60 million, the filing said. Ominously, even digital advertising on Projo.com and its affiliate sites declined significantly, falling from $9.7 million in 2008 to $7.6 million in 2010.

Circulation and printing/distribution revenue has increased over the same period thanks to price increases and new contracts. Here’s a chart breaking down The Journal’s revenue picture:

The good news for The Journal is that the pace of its financial deterioration is slowing down. While advertising sales fell 10.1% in the fourth quarter of 2010 compared with a year earlier, that was the smallest decrease in three years. And last year’s 5% drop in total revenue was far below the declines of 20% in 2009 and 14% in 2008.

A.H. Belo executives, like their peers at other publishers, are trying to become less reliant on advertising revenue as more of that spending moves online, and they’re turning to readers to make up some of the difference.

Advertising sales made up 82% of the Projo’s total revenue in 2005 but only 60% in 2010, while circulation’s share of the shrinking pie doubled from 17% to 35%. “The company expects newspaper advertising revenues will continue to decrease in 2011, although at a lower rate of decline,” the SEC filing said.

The trend of increased reliance on circulation dollars will continue if The Journal follows through with its long-discussed plans to start forcing online readers to pay later this year. Its sister paper, The Dallas Morning News, started charging $17 a month last week to read its content on Dallasnews.com and through iPhones and iPads.

“I think you’ll see some improved performance during 2011, assuming the economy and all such things hold up,” Jim Moroney, executive vice president of A.H. Belo and the Dallas paper’s publisher, told investors in a conference call last month.

The Journal sold an average of 101,123 copies on weekdays last year, down from 163,909 in 2005, A.H. Belo said. Sunday circulation fell to 137,339, down from 231,593 in 2005, a decrease of 41%. Figures released last fall showed weekday circulation is now below 100,000.

One thing to keep in perspective – even after losing 40% of its revenue, the $99.9 million Projo is still the dominant media player locally. Annual ad revenue for all the TV stations in the Providence/New Bedford market combined totals roughly $60 million, according to BIA Financial Network.

Nor is The Journal’s situation an outlier compared with its two sister papers, The Morning News and California’s Press-Enterprise. While A.H. Belo’s total revenue has decreased from $637 million in 2008 to $487 million in 2010, the Projo’s contribution has remained basically unchanged at about 20%.

A.H. Belo declined to reveal a date for the launch of the Projo’s iPhone and iPad apps in its SEC filing, saying only that they would be introduced “at a later date.” Journal management has said the NYT-designed apps will arrive this summer.

A.H. Belo doesn’t break out how many employees each of its papers has, but the company’s work force totaled 2,200 full-time workers as of Dec. 31, down from 3,400 in 2007, plus 280 part-timers. The Journal had 562 full- and part-time employees as of March 2009 following four rounds of layoffs over the prior six months.

In a footnote, A.H. Belo also disclosed it paid $3.1 million to buy Dallas Morning News president John McKeon’s old home in California as part of his relocation agreement. The company will be hoping to have better luck selling the house than they’ve had unloading the Journal building on Fountain Street.

More Providence Journal coverage on Nesi’s Notes:

• Projo union OKs new 3-year contract with AH Belo (Feb. 16)
• No reason for Belo to sell Projo with price at $51m (Dec. 28)
• Why the Projo’s finances are healthier than you think (Nov. 18)

Today’s the day Projo parent A.H. Belo’s flagship paper, The Dallas Morning News, finally put up its paywall after a short delay. From now on, readers will need to pay at least $17 a month to access all its content on Dallasnews.com and mobile devices, or $34/month with a print subscription thrown in.

Here’s how Morning News publisher Jim Moroney described the changes in a letter distributed to readers:

The journalism you’ve come to value in your print edition is now available in a new, easier-to-use format at dallasnews.com, as well as through new applications for your iPad and iPhone. While these digital versions will be updated at least three times during the day, we’ll also be bringing you breaking stories – complete with stunning photos, video and our first-rate reporting – as they happen.

Each of the paywalled stories on Dallasnews.com is marked with a small lower-case “d” in a circle. The paper says subscribers will only need to register once to get access across all its digital platforms.

It’s hard to say what any of this means for the Projo, but I assume the lessons learned in Dallas will be shared with management here in Providence as they prepare to move forward with their own online pay strategy.

In a memo leaked to Dave Scharfenberg last October, Journal publisher Howard Sutton said the paper would unveil a new Projo.com, plus NYT-designed iPhone and iPad apps, this coming summer. As I’ve said before, enlisting the NYT’s design savvy is a good move by A.H. Belo – I test drove the Morning News’ classy apps, also NYT-designed, and they’re quite nice.

But the Projo’s paywall remains a big ol’ question-mark for now. The paper’s executives have been talking about the idea publicly for almost a year and a half now, but it still hasn’t seen the light of day. The last we heard was October’s report of a “Diet Projo” plan, with short summaries of longer print stories posted online.

That doesn’t bear any resemblance to what the Morning News is doing, though, which raises the question of whether the Providence paper has changed its plan again – or is going its own way within A.H. Belo.

Time will tell. In the meantime, check out Pegasus News founder Mike Orren’s post from yesterday featuring Jim Moroney’s memo and Orren’s own thoughts on the Morning News’ strategy.

(photo: A.H. Belo)

What does a company in Bellevue, Wash., want with Rhode Island’s Future?

The pioneering liberal blog disappeared from the Web a few days ago and was replaced with that ubiquitous photo of an attractive young woman with a backpack and a series of links hawking gold and stock options.

International records show the rifuture.org domain name was taken over around 11:30 a.m. Friday by eNom Inc., a Bellevue-based registration service and subsidiary of Demand Media, the infamous content farm that’s one of the major reasons Google is being forced to make large-scale changes to its search engine.

The records say eNom’s ownership of rifuture.org is good until February 2012. [Or does it? See update.]

Brian Hull, who bought Rhode Island’s Future in mid-2009, told me Wednesday he’s working on regaining control of the site’s domain name from eNom and is confident he will succeed, although he doesn’t know how long it will take.

“It will come back,” Hull said. “There’s just some issues I need to try and work out with it.”

This isn’t the first time a popular local blog has temporarily lost its domain name. Anchor Rising went through the same thing a few years ago, though AR contributor Mark Comtois wrote today, ”It appears as if the management over at RIF is having a more difficult time than we did.”

Registration records do not give a live phone number for eNom; phone calls are directed to its Whois Privacy Protection Service division. A call to Whois Privacy Protection’s number led to an answering machine – with a full mailbox – that suggested sending questions to an e-mail address.

I tracked down a phone number for eNom’s office in Bellevue and spoke briefly with a technical support representative there. He was unable to provide further details beyond what the records show, but said he would pass my message along to his supervisor. I’ll update if I get a call back.

Update: Domain Name Wire says the blame for this should fall squarely on Rhode Island’s Future, not eNom:

When you screw up and don’t renew your domain name, just blame the registrar when you talk to the press. …

“Some issues” means Hull needs to pay his bill. Which isn’t mentioned anywhere in the [WPRI.com] article.

It’s also inaccurate that eNom now owns the domain through February 2012. The domain is actually in “Auto Renew Period”, which means the .org registry tacked a year onto the expiration date, not eNom. …

Now, that’s not to say that eNom won’t eventually take this domain and keep it in its portfolio. But don’t blame eNom right now — blame the guy who forgot to renew his domain name.

eNom isn’t the only domain registrar to take attacks like this. The same thing happened when backup service CrashPlan.com forgot to renew its domain at Go Daddy. The company tweeted that Go Daddy “mistakenly removed our root nameserver entry”, “inappropriately took over our DNS”, and did a DNS “hijack”.

Update #2: E. Greenwich firm keeping RIFuture in Web purgatory (March 3)

Providence Journal parent company A.H. Belo’s stock dropped nearly 11% today – but why?

The company released a so-so fourth-quarter earnings report this morning, but that doesn’t explain the precipitous drop in the shares that began just before 2 p.m., six hours after that news came out. And the S&P 500 only lost 2% today.

Here’s today’s A.H. Belo stock performance via Yahoo! Finance; the red line is yesterday’s closing price:

Divining the meaning of stock market gyrations is a mug’s game, of course. But seeing a chart like that made my wonder what happened on A.H. Belo’s quarterly conference call with investors, which started at 2:30 p.m. our time. (Granted, the stock was already falling by then.)

But I turned up mostly empty after listening to the call. A.H. Belo executives reiterated that they will have to use $55 million of its cash stockpile – currently at $86 million – to shore up its pension plan this year. They also said it will take five to seven years to get the plan “pretty close to fully funded.”

It’s possible, then, the stock’s nosedive wasn’t related to the call at all – it doesn’t take a lot for a company with a small market cap like A.H. Belo to see a big gyration. Strange.

Other highlights from the call:

• The Dallas Morning News’ new iPhone and iPad apps were downloaded 22,000 and 14,000 times, respectively, in the month since they became available. The company will begin charging non-print subscribers $16.95/month for full digital access to Morning News content and $9.99/month for access through one digital platform, like the website or an app, on March 1.

• It doesn’t sound like the Projo’s brick headquarters on Fountain Street will be sold anytime soon. A.H. Belo first put the property, along with other Projo-owned facilities nearby, on the market in late 2008 and last year the company tried to get the City of Providence to buy it for $9.75 million – no dice. “Frankly, there aren’t any particularly strong signs that the commercial real estate market relative to those properties is picking up steam,” CEO Robert Decherd said today. A parking garage did get sold last year.

• A.H. Belo will spend $13 million to $15 million on capital expenditures this year, much of it new investments in technology to upgrade and harmonize its systems at The Journal and its other two papers. A new Projo.com with a paywall is slated to debut this summer.

• The company cut about 100 jobs combined in Providence and Riverside last year in what an executive termed “selective and very specific reductions” in certain departments. Decherd says current staffing levels should stay the same as long as revenue doesn’t decline further.

• A.H. Belo’s content chief Jim Moroney, who’s also publisher of the Dallas Morning News, acknowledged the company did not make its digital strategy a top priority until recently. “We’ve had two primary focuses over the last 12 to 18 months,” he said – increasing circulation revenue and getting more commercial printing work. “I would then acknowledge that we have not put as much of our attention and focus on the digital part of our business, in terms of ad sales, as we might have had we not had so much focus on these other two initiatives,” he said.

Phil Lombardo

There is “no way” the New York company that’s emerged as the top bidder for WLNE-TV ABC 6 would close the station’s newsroom to save money if it takes over the channel, the firm’s founder and CEO told me this morning.

“We are very committed to news,” Citadel Communications Co. Ltd. CEO Phil Lombardo said in a phone interview with WPRI.com. ”All of our properties are very committed to news.”

Matthew McGowan, ABC 6′s court-appointed receiver, revealed Thursday that Bronxville, N.Y.-based Citadel is the “stalking-horse” bidder for the station. Other potential buyers have until March 18 to submit their own offers, and the new owner will be selected March 22, WLNE said.

Lombardo confirmed that Citadel has offered to pay $4 million for ABC 6. That’s 70% less than the $14 million that Kevin O’Brien’s Global Broadcasting of Southern New England paid to buy WLNE from Freedom Communications in 2007.

Citadel owns four TV stations in Illinois, Iowa and Nebraska, three of them ABC affiliates and the fourth a CBS affiliate, Lombardo said. The company is not related to radio giant Citadel Broadcasting, which owns WPRO-AM and other local stations.

“I think Providence is a great market,” Lombardo said. “It’s a state capital, and I think that we can take that facility and make it into a very competitive and good citizen of the community.”

ABC 6 has struggled financially for years. Its revenue from advertising and other sources fell from $15.1 million in 2000 to $5.9 million in 2009, according to BIA Financial Network Inc., a Virginia research firm. But Lombardo said he was confident his team can turn it around.

“I know the station has had problems in the past and that doesn’t deter me at all,” he said. “I think that the way we operate can make it a very successful entity and a good citizen of the community.”

Lombardo also said Citadel would move quickly to convert WLNE-TV to a high-definition signal, which no station in Providence has done yet. “We’ll be the first ones,” he declared.

While WLNE isn’t located near Citadel’s other TV stations, Providence and Bronxville are not too far from each other, Lombardo pointed out. “That’s part of the attraction – I can be there in no time at all,” he said.

Lombardo is a former joint board chairman of the National Association of Broadcasters, according to his biography. He said he founded Citadel in 1982 with a cluster of East Coast stations. Those were later sold and the Midwest stations were picked up.

Disclosure: My employer obviously has a vested interest in the future of the Providence television market.

Update: Looks like Citadel made a much smaller acquisition recently. RBR.com reports the company paid about $150,000 for W48CN, a low-power station in Sarasota, Fla., last month.

(photo: National Association of Broadcasters Education Foundation)

The media world is buzzing about AOL’s decision to buy The Huffington Post for $315 million – and wondering whether it’s really possible for the acquisition to pay off financially.

The Wall Street Journal’s Deal Journal blog concluded that the deal “is truly transformational” – and “may be crazy.” The WSJ points out that HuffPo is expected to have $50 million in sales this year, putting its valuation at a rather pricey 6.3 times projected revenue. And to put that in perspective, the blog used an example that should hit close to home for local readers:

Just for a sense of scale about that $50 million. Newspaper company A.H. Belo – owner of just four [sic] major daily papers - generated $119 million of revenue just in the third quarter of 2010. Yes, A.H. Belo’s revenue is shrinking and HuffPo’s is growing rapidly. But if nothing else, the fact that HuffPo is considered a wild digital media success story is a sign of how hard it is to mint money out of online ads.

Amen to that – a good reminder of how the beleaguered newspaper business can still be a pretty solid cash generator even in this late stage of the game. The gap is even more yawning when you look at A.H. Belo’s full-year 2009 revenue of $518 million – 10 times as much as HuffPo. (Full-year figures for 2010 aren’t out yet.) But you’d rather have HuffPo’s trend than A.H. Belo’s.

Locally, one of the big questions is what the HuffPo acquisition will mean for Patch, AOL’s network of hyperlocal news sites, which has already set up shop in almost half of Rhode Island’s 39 communities and quite a few in Southeastern Massachusetts, too.

Patch will be folded into AOL’s newly created Huffington Post Media Group division, and one of the company’s goals is to look for ways to have the Patch sites and HuffPo work together. A Patcher I spoke with acknowledged finding that idea a little disconcerting, since HuffPo’s unabashedly liberal reputation is quite different from Patch’s middle-of-the-road, hometown-newspaper ethos.

In the meantime, I’m eagerly awaiting AOL’s $315 million offer for Nesi’s Notes. I’m willing to negotiate!

WPRO-AM 630 parent Citadel Broadcasting and startup news site GoLocalProv are no longer media partners, top executives at the two outlets have confirmed.

Citadel and GoLocalProv are “no longer in a partnership,” Barbara Haynes, general manager of the radio company’s Providence division, told me in a brief e-mail on Thursday.

GoLocal co-founder Josh Fenton declined to comment directly on when or why his site’s partnership with the broadcaster ended. “Citadel was a great partner at launch and helped us raise awareness for the GoLocalProv brand,” he said in an e-mail.

While Haynes and Fenton did not offer specifics, it appears they dropped their alliance within the past month or so. The last time a GoLocalProv article referenced WPRO as its “media partner” was Dec. 17, a search of the site’s story archive shows.

In addition to WPRO 630 and its simulcast on WEAN-FM 99.7, Las Vegas-based Citadel owns local stations WPRO-FM 92.3, WWLI-FM 105.1, WWKX-FM 106.3 and WPRV-AM 790. The company, which emerged from bankruptcy last June, owns a total of 225 stations in the U.S.

GoLocalProv debuted last April after more than two years in development. More than 90 percent of the site’s parent company, GoLocalProv.com LLC, is owned by Fenton and his partner Paul Krasinski, Fenton said last fall.

Fenton said GoLocalProv now delivers “about 1 million impressions a month” through its website, videos and e-mail blasts. “We are now a significant media player in the market – we have broken tremendous new ground and enjoy a vibrant advertising base,” he said.

Fenton also suggested he is considering launching versions of the GoLocal model in other Rhode Island communities, and said he expects to see more people consuming news through mobile devices and tablets like the iPad.

Louis Hochman is currently a regional editor for AOL’s hyperlocal news network Patch in New Jersey. Back in 2007, though, he was managing editor of the Kent County Daily Times in West Warwick.

Gannett’s announcement last week that it would slice by half the number of journalists at three suburban Garden State newspapers led Hochman to pen some reflections for Patch about the grim news. In the course of doing so, he offered a stark take on what’s happened to the Daily Times in recent years (emphasis mine):

What’s truly tragic, and frightening, is that this sort of thing is happening everywhere. Before my time with the Daily Record, I worked at newspapers that have since downsized significantly or disappeared entirely. I recently visited the offices of a small daily paper in Rhode Island where I’d been the managing editor for a year. The newsroom itself was abandoned; there weren’t enough people left to fill it. The editorial staff of 17 had been whittled to four. The paper was a shell, with one or two original stories to report each day. It was heartbreaking.

If the numbers cited by Hochman are accurate, the Kent County Daily Times’ editorial staff has shrunk an astonishing 75% in the last four or so years. The paper is one of many around here that was damaged by the troubles of the Journal Register Co., its former parent, which sold the Daily Times and seven other local publications to Rhode Island Suburban Newspapers in 2007.

I write a lot about The Providence Journal’s challenges because of its high profile and statewide reach, but if anything the cuts made at suburban papers in Rhode Island and Bristol County, Mass., have been even deeper and more damaging to civic life. Hochman’s new employer, Patch, could pick up some of the slack if its sites find an audience and AOL continues to fund it, but that remains to be seen.

Update: Publisher Nanci Batson tells me the Kent County Daily Times’ editorial staff is down 28%, not 75%, though that excludes the shuttered Warwick Daily Times.

A.H. Belo executives gave a presentation to Wall Street investors at a Citigroup media conference last week. I didn’t hear anything surprising in their comments, which mainly focused on the Dallas Morning News’ new paywall. The Providence Journal wasn’t discussed much, which may not be a huge surprise since it only contributes 20% of A.H. Belo’s annual revenue.

CEO Robert Decherd offered some cautious optimism about the company’s outlook. ”While it is not our practice to provide [earnings] guidance, our current thinking about 2011 is that 2010′s positive momentum could continue, and – together with improvements in sales force effectiveness – could result in [A. H. Belo's] revenue being flat year-over-year,” he said. (For newspapers, flat is the new growth.)

One question the event did raise for me is whether the Projo will make major changes to its popular 7 to 7 News Blog once its own “Diet Projo” paywall is put in place. Journal executives have said in the past that 7 to 7 is a big driver of traffic to Projo.com.

During his presentation, Decherd said “breaking news, wire [service] stories, classified content and other commercial content will remain free” on the Dallas paper’s site even after its paywall starts Feb. 15. “There will still be free content on the website,” Morning News publisher Jim Moroney added. “A lot of national, international news, breaking news – things that are commodity news.”

If similar rules are put in place at the Projo, I’m curious how “breaking news” will be defined. Sometimes The Journal will publish lengthy stories on 7 to 7 that are either exclusive to the paper or mirror the following day’s print story. Will those be held back, or not posted until after the morning paper is out? The fear among papers is that if they put too much news behind the paywall, they will drive readers to competing outlets. On the other hand, the more news The Journal posts for free on 7 to 7, the less need there is to buy a subscription.

Moroney also acknowledged how difficult it will be to get consumers to pay for newspaper content online, considering how long they haven’t had to do so. I think it’s worth quoting him at length to get a sense of the new strategy at A.H. Belo, which is very iPad-focused:

Do you really expect people to pay you for access to what they’ve been getting on the desktop for free for 15 years? And the answer is no – not really.

But if you take a tablet, an iPad, a [Samsung] Galaxy – and let’s take the iPad. You open it up and you’ve got a Safari icon on there and you’ve got a DallasNews app on there. If they hit the Safari icon and type in DallasNews.com and there up comes our website and it’s all for free, and then they hit the app and it says $9.99, and they say, you know, what kind of fool do they take me for? Do they think I’m going to pay them for this when I can basically get a little different presentation but all the same content for free?

So our strategy is, you’re going to have to make all of the digital channels that people can access your content through [work so that you get it] only by paying for it, or you’re never going to find out if they’re going to pay for it on one of them – particularly when you can access those two channels, a Web browser or an application, off the same device.

And so our real strategy … is pointed toward the tablets. We think there is an opportunity to start at the beginning and have people pay for access on a tablet, and let the website just sort of take care of itself.

Two points for honesty: Just a day after Projo sister paper the Dallas Morning News said it will start charging $203 a year to access all its content online, A.H. Belo executive Jim Moroney acknowledged the company has no idea if its plan is going to work. Here’s some of what he said in an interview with Harvard’s Nieman Journalism Lab:

When the publisher of the News told his staff about the decision, he said they must be prepared to be ridiculed and vilified for putting their content behind a paywall.

“This is a big risk — I’m not confident we’re going to succeed,” Moroney told me. “But we’ve got to try something. We’ve got to try different things.” …

Moroney is pragmatic about the paper going to a paid model. “It’s not an over-the-cliff strategy,” he said. “If this works, great, it’ll be fantastic. If it doesn’t, we can go back to providing access at a lower price or free.”

The post is well worth a read to get a sense of how A.H. Belo is thinking about paid digital content, particularly since Moroney is close to CEO Robert Decherd and likely will be involved in putting together the Journal’s “Diet Projo” paywall strategy later this year.

Moroney said he expects the Morning News’ monthly page views will drop by half after the paywall is put in place Feb. 15. If the same thing happened at Projo.com, its page views would shrink from 10.9 million to about 5.5 million each month. (Page views refers to every time a page gets loaded, as opposed to “unique visitors,” which counts individuals no matter how many or how few pages they view.) Moroney said newspapers face no other option if they want to maintain the newsrooms they have today.

Patch, AOL’s growing network of hyperlocal news sites about individual cities and towns, is quietly but quickly expanding its presence here.

Patch sites are now up and running in 12 of Rhode Island’s 39 cities and towns, with the latest additions being Barrington, Bristol-Warren, Cranston, East Providence, Narragansett, North Kingstown, South Kingstown and Woonsocket.

Across the border, Patch sites are now live in Attleboro, Easton, Norton and Seekonk – in fact, I see that Norton’s Bill Gouveia has moved his “Inside Look” column about the town out of print and onto Patch. The company says more sites are on the way in both states.

I noted back in September that Patch was preparing to create sites for half of Rhode Island’s communities, plus more in the Bay State, and WRNI’s Ian Donnis followed up earlier this month with news that the company was poaching talent from My02818.com, an independent hyperlocal site launched last year in East Greenwich.

It remains to be seen whether Patch will prove worthy of AOL’s $50 million investment – skeptics abound – but the site is certainly aiming to make its presence felt here in Southern New England.

The Providence Journal’s publisher, Howard Sutton, issued a memo yesterday explaining what’s happening with the paper’s long-gestating plans to make readers start paying for some Projo.com content, Dave Scharfenberg reports. Although Projo executives have been cagey about what they’re planning – and they never speak to the press – this looks like an evolution of their paywall strategy, not an abandonment of it.

The old plan was apparently to keep some of the paper’s lengthier local stories off the free Web altogether – no HTML version would go on Projo.com at all. According to Scharfenberg’s report, the new plan is to post short summaries of those stories online, but only offer the full versions to print and (eventually) electronic-edition subscribers. Think of it as “Diet Projo.”

With print circulation and revenue still plummeting, the question is whether this will help The Journal stabilize its finances. Off the top of my head, I can’t think of any other paper that offers abbreviated stories online with full versions available to subscribers. I asked Dan Kennedy, the Northeastern professor and prominent press critic, what he thought of the idea, and here’s what he said:

The Journal is sacrificing its website in order to bolster its print edition, which is where it makes most of its money. I understand why Journal managers are doing this, but it’s a short-term solution that could prove harmful in the long term. I also wonder whether it will even accomplish anything. Newspaper readers are skimmers, and a headline and brief synopsis of a story may be all that they want.

That’s a good point. Although I know all of you linger over each lovingly chosen word that appears here on Nesi’s Notes, in most cases people skim, skim, skim.

In fact, what the new Projo.com strategy reminds me of most is The New York Times’ TimesDigest, a nine-page synopsis of the daily paper the company publishes primarily for cruise ships and hotels. (Here’s a PDF example of it.) “TimesDigest indicates that making New York Times stories shorter while retaining their essential news value ain’t really that hard,” Slate’s Jack Shafer wrote in 2007. Will some people be content with an online “ProjoDigest” and opt to skip a subscription?

There were other interesting tidbits in Sutton’s memo. The Journal has retained two of Providence’s savvier firms to help it move forward: ExNihilo is designing a new version of Projo.com slated to debut next summer, while Nail Communications is helping the paper “strengthen the graphical representation of our brand.” And the release date for the paper’s new iPhone and iPad apps, which will use the NYT’s new Press Engine system, also has been pushed back a bit to next summer.

It looks like 2011 will be the Year of the Paywall for the newspaper industry, with The New York Times and its sister paper The Boston Globe among those planning to stop offering their entire print edition for free online after New Year’s. I’ve reached out to a few other media analysts to get their thoughts on the Projo’s plan, and I’ll update when I hear back.

Nine months after it began requiring readers to pay to read more than 10 stories online per month, the New Bedford Standard-Times is pleased with the results so far, publisher Mary Harrington tells me.

The Standard-Times, which Rupert Murdoch’s News Corporation acquired as part of its 2007 takeover of Dow Jones & Co., charges new subscribers $175 per year for full access to its SouthCoastToday.com – about $10 more than for the print edition. A combination print-online subscription costs $185 per year.

While working on this post about the Projo’s paywall plans, I e-mailed Harrington to ask how the Standard-Times’ experiment with online subscriptions was going. Here’s what she had to say:

TN: It’s now been just about 9 months since SouthCoastToday.com switched from an entirely free site to a metered model. How is it working? How many people have subscribed to the online version? Have you seen a significant drop-off in traffic to the site?

MH: We can state with confidence that charging for content online under our model has had a positive impact on South Coast Media. This strategy has proven itself instrumental in our effort to grow circulation revenue. On specific numbers, we will be relying on the Audit Bureau of Circulations reporting process to share those details. We can say, as expected, traffic is down. What’s important is that our digital strategy now aligns with our overall business strategy and is helping drive revenue.

TN: As a non-subscriber but occasional reader of SouthCoastToday stories, I’ve been surprised to find I still haven’t hit my limit in terms of the number of stories I can read for free per month. I haven’t kept close track, but is the limit still 10 articles per month, or has that been tweaked?

MH: Registered users continue to have access to up to 10 metered stories. There are some stories, though, that are not metered; these include wire stories, stories that involve critical information about a situation that threatens life or property (so hurricane threat reporting was not metered, for example), and stories by some of our non-daily products, which include the New England Business Bulletin.

While The Wall Street Journal has been charging online readers for years, the January launch of the S-T’s paywall kicked off a yearlong push by News Corp. to get more readers paying for Web access to its news content. (Nor is it the only local daily to go down that route; the Newport Daily News has been charging $345 per year for an online subscription since June 2009.)

Another of News Corp.’s papers, The Times of London, blocked non-subscribers (and Google) starting in July, with its U.K. tabloid, the News of the World, soon to follow. Bloomberg News had details in a story last week:

[Rupert's son] James Murdoch’s plan to charge for online access to U.K. tabloid News of the World shows he’s extending his paywall model even as advertisers flee websites of two of his other newspapers where Internet readers have to pay.

News of the World, which this month featured a video of boxer Ricky Hatton purportedly snorting cocaine and published an interview with a prostitute who said she had sex with Manchester United footballer Wayne Rooney while his wife was pregnant, will seek payment from Web readers from next month. The move follows Murdoch-controlled News Corp.’s July push to get London papers The Times and The Sunday Times into the online-pay arena.

With more people getting their news from the Internet, newspapers are increasingly charging for online access to make up for lost revenue from print advertising. Murdoch’s strategy to put all stories of his U.K. newspapers behind an online paywall differs from the approach of some other newspapers such as the Financial Times which first gives access to some stories online before it starts charging.

Update: The Providence Journal’s iPhone/iPad app is scheduled to debut next spring – specifically, in the second quarter (April-June) of 2011, Jennifer Wesley, The Dallas Morning News’ spokeswoman, just told me in an e-mail.

The New York Times Co. said Monday it will begin licensing Press Engine, the software behind its popular iPhone and iPad apps, in the fall. And among the first adopters is A.H. Belo Corp., which owns The Providence Journal.

What’s not clear is when The Journal will launch its apps. The Dallas Morning News plans to introduce its iPad app around the start of 2011, after the company figures out how to charge, A.H. Belo exec James Moroney told AdAge on Monday. He didn’t mention The Journal, though. (I’ve e-mailed an A.H. Belo spokeswoman for comment, and will update if I hear back.)

Unfortunately for Journal readers, so far A.H. Belo appears to have been focusing its digital efforts on The Morning News. The Dallas paper already has both an e-edition and an iPhone app, while the ProJo has neither. But today’s press release certainly makes it sound like the ProJo will be part of the launch.

Also unclear is how this interacts with previously discussed plans for the ProJo to start charging for some stories and perhaps raise the price of the print copy. (The NYT itself is planning to introduce a pay wall early next year.)

For both Times Co. and A.H. Belo, though, this seems like a smart strategy. The NYT’s embrace of technology has been widely praised, and its iPhone app has been downloaded 4.5 million times over the past two years. Its Times Reader desktop application also deserves to be better known. Why should a small publisher like A.H. Belo try to reinvent the wheel, and why shouldn’t the NYT try and make some more money off its investment in R&D?

For more on the NYT’s strategy with Press Engine, check out this solid analysis from Fast Company’s Kit Eaton.