Digital badly misses year-end site relaunch goal

The Indianapolis Star is one of just nine sites relaunched.

In the latest blow to Gannett's make-or-break digital transformation, the company has only managed to install long-planned new website and app designs at nine of its 104 U.S. TV stations and newspapers -- a figure that falls far short of the most recent forecast, according to a review I completed today.

The new designs, which are meant to boost advertising revenue and readership, have been in the works since summer 2011, and were to be modeled after the look first adopted by USA Today more than a year ago. Among many changes, the USAT relaunch created a more tablet-like appearance that placed advertising more directly in front of readers.

As recently as July, Corporate said it expected the relaunch would be largely completed by year's end in the company's top 35 U.S. markets. Indeed, at one point, Corporate had said the rollout could be finished as early as January 2013.

But today, the first business day of the new year, the new look is in place at only two newspapers and seven stations, according to my review, which included 81 community dailies plus 23 stations. (I did not include any of the 20 stations from the just-closed takeover of Dallas TV company Belo.)

Since initially predicting installations in the top 35 markets, Corporate hasn't said anything publicly about possible changes to the timetable, so it's unclear why the new look has reached only nine sites so far.

Without any additional information from Corporate, it's also unclear whether the delay will have any immediate impact on revenue projections. The new design was to create more uniform advertising positions across Gannett, especially for prerolls that were to run before the many more videos now being produced by local sites in anticipation of the site redesigns.

The first to relaunch was WBIR in Knoxville, Tenn., in early September. The first newspaper to come on board was New York's Rochester Democrat and Chronicle, later that same month.

The unexplained delay comes amid a raft of other evidence that Gannett's digital growth is stumbling, according to regulatory documents, as competition across the Web and electronic networks only grows more intense.

Related: This spreadsheet shows the status of site and app relaunches at all 104 U.S. properties.

Indy | Multi-tasking reporters need not apply

"If your first instinct when coming upon a crime scene is thinking about a possible lede rather than tweeting what you see, this position is not for you."

-- The Indianapolis Star, in a new advertisement seeking a breaking news reporter mostly covering cops and courts.

GCI extending Butterfly Project to 35 newspapers

As expected, the initiative to add dozens of editorial pages plus a local edition of USA Today will be expanded to another 31 dailies vs. the current four, according to a Gannett statement this morning. The rollout will take place during the first quarter. Corporate didn't identify the 31 titles.

Further down the road, GCI plans to extend the program to all of its 81 local newspaper markets, according to The New York Times.

Asked whether subscription prices would rise for readers getting the extra USAT content, Corporate's chief spokesman, Jeremy Gaines, told the NYT: “As we introduce enhanced products, consumers tell us they are willing to pay for the added value we’re bringing them.” (Translation: yes.)

The 35 papers that will be part of the Butterfly initiative have a combined circulation of more than 1.5 million on weekdays and more than 2.5 million on Sunday, according to USAT. That shows the 35 were chosen according to a metric other than circulation, such as annual revenue, because the highest-circulating 35 have combined volume of 2.4 million weekdays and 4.3 million Sundays.

This morning's announcement follows a relatively short test of the Butterfly Project since early October at four dailies in Fort Myers, Fla.; Indianapolis; Rochester, N.Y., and Appleton, Wisc. The expansion is designed to increase advertising and circulation revenue at the local level, plus ad sales and circulation volume at USAT.

Related: Corporate's press release highlighting this morning's UBS media conference.

USAT | Study finds big post-merger airfare hikes

A USA Today analysis of the country's top 100 airports in the 48 contiguous states found that on average, those that lost at least a quarter of their domestic seats since the start of 2005 saw nearly twice the average fare increase over the past eight years.

The paper's analysis published this morning is based on inflation-adjusted fare data from the Bureau of Transportation Statistics and airline schedule data from OAG Aviation Worldwide.

In one example, Cincinnati/Northern Kentucky International Airport saw its number of seats plummet 80% between the first quarter of 2005 and the first quarter of 2013, as Delta slashed flights and the airport lost service from Northwest as well as Continental, which merged with United in 2010.

Fares spiked 26% during that eight-year period, to an average ticket price of $519 — the highest of the 100 airports reviewed.

The truth about USAT's big new circulation pitch

USA Today just made a dramatic change in the way it reports circulation, adding free digital app users to paid sales so it could once more claim the No. 1 circulation spot among U.S. newspapers. The move boosted USAT's total as of Sept. 30 to a record 2.9 million from 1.7 million a year ago -- a 68% increase.

USAT's free iPad app

The two other national newspapers left their formulas unchanged. That resulted in a smaller 14% annual gain for The New York Times, to 2.1 million. The Wall Street Journal saw a 1% decline to 2.3 million. (See this spreadsheet for a complete breakdown.)

But comparing the three papers' figures is hardly apples-to-apples. The NYT's iPad app lets users read only three articles daily for free; after that, they must pay for a digital subscription. The WSJ app also gives readers limited access for free before requiring a paid account.

Not so with USAT, which gives readers free access without any limits. That means more than half the paper's circulation is now unpaid digital. And that doesn't begin to count all those copies provided gratis by hotels, airlines and other bulk buyers.

Why this matters 
Historically, the industry told advertisers paid circulation was more valuable than free because readers were more engaged with something they'd spent money on. Indeed, when USAT lost the top circulation spot in 2009, it downplayed the shift by emphasizing that it remained the top selling print paper, partly as a result of its big single-copy sales.

"Single copy newsstand sales," the paper said in a press release, "reflect customers who actively seek out the newspaper each day and pay full newsstand price, which is widely considered the most valuable circulation by advertisers."

Starting next spring, USAT plans to change its strategy again under the Butterfly Project. It will start including potentially millions of circulation when it likely expands distribution of its new daily local edition to about three dozen of Gannett's community dailies.

In announcing that change last week in a memo to staff, Publisher Larry Kramer didn't say whether those editions would be counted as paid.

But to do so, Gannett effectively would be counting each of those dailies twice. For example, The Indianapolis Star would count as one. And the USAT edition -- which is now the Star's second section -- would also get counted as one.

Related: Poynter Institute says USAT's news coverage is "misleading."

Earlier: Find your newspaper's newest circulation figures.

USAT | Callaway brooks no resistance on Butterfly, telling his editors: 'stomp out any sort of whining about this or send the person to me and I will'

Here's an email from USA Today Editor-in-Chief David Callaway that doesn't end in his customary "cheers" sign-off.

Callaway

It seems newsroom staffers object to their longer, more labor-intensive enterprise stories being published only in the new USAT weekend editions now being inserted in four small Gannett dailies as part of the Butterfly Project test. That means some of their best work no longer appears in the regular national print edition with its 1.7 million print circulation. The combined weekend circulation for the four dailies is only around 600,000.

The kerfuffle was disclosed yesterday in Callaway's email to senior editors, where he endorsed an earlier note from Executive Editor David Colton to reporters and other newsroom staffers defending the Saturday and Sunday editions.

"Well said, David," Callaway wrote to his editing team, telling them: "Please stomp out any sort of whining about this or send the person to me and I will. All these great stories go on the Web and mobile as well, where the audience is five times the size. We are moving way too fast to have anyone on our staff who still doesn't understand this."

High-profile project
In his memo, Colton wrote: "These are closely-watched products, by the industry, by media critics and by our colleagues at USCP" -- a reference to the 81-title U.S. Community Publishing newspaper division.

He conceded "weekend content does soak up a lot of stories and packages, leaving Mondays and even later in the week hurting for print content."

But, he added, "treating Saturday and Sunday like major editions . . . will help us in the short run and for sure in the long run, when the Sunday USA Today may very well be treated as our platinum product."

Kramer

The Callaway-Colton emails spotlight the tension in the newsroom as Gannett's struggling flagship undergoes another turnaround meant to stem losses in advertising and circulation. Callaway came to USAT under Larry Kramer, who was hired as publisher in spring 2012. As outsiders, they've challenged many longtime employees -- some dating to the paper's 1982 launch -- to get with the digital times, and work more productively and cooperatively with other Gannett divisions.

Under previous publishers, USAT often operated quite apart from the rest of the company. It's housed alongside Corporate at the Crystal Palace headquarters in suburban Washington, complete with a gymnasium, cafeteria and other amenities that employees at the community dailies can only dream about. That's led to grumbling in the field that USAT employees are underworked and overly pampered -- a perception that will only be advanced by the current fuss over contributing to the Butterfly Project.

In that initiative started early this month, USAT is producing a daily standalone edition of national and foreign news for newspapers in Indianapolis; Fort Myers, Fla.; Appleton, Wisc., and Rochester, N.Y. The papers also added some local content as well, increasing page count with the USAT section by 50 to 70 pages a week.

Butterfly is a major bet on print newspapers when the industry has been losing advertisers and readers to the Internet and other digital products. Yet, even as Callaway and Colton touted the value of the new print editions, the paper today once more claimed it is the nation's top-circulating newspaper by including free tablet and smartphone app users.

For USAT, Butterfly gives the paper a weekend presence for the first time in its 31-year-history, creating another vehicle for ad sales and potentially adding millions of weekend and weekday circulation should the project be extended to other Gannett titles.

For the community papers, the USAT section is meant to add bulk and a well-known brand name after years of cutbacks in news have driven away readers and advertisers.

Butterfly already a 'go'?
Colton's note for the first time suggests the USAT Butterfly Project edition is likely to be added to yet more community dailies between December and March. Readers have told me earlier that about three dozen of the biggest 81 may get the USAT section if the test is successful.

Colton wrote: "Editors and publishers from 30+ Gannett sites will be here this Monday/Tuesday to discuss possible expansion of the Butterfly project. Having strong work to show them from this weekend’s editions will be a great look-what-you’ll-be-getting 'sell.'"

Combined, those more than 30 sites have Sunday circulation of 3.5 million -- underscoring Colton's prediction that Sunday's USAT could become the paper's "platinum product." Weekdays, those sites report a combined print circulation of 2.3 million.

Indeed, in a memo today, Kramer said USAT plans to count the new Butterfly editions in its next circulation report in the spring.

USA Today will count Butterfly edition circulation; move comes as it once more claims No. 1 circ rank

With print circulation tumbling again, USA Today Publisher Larry Kramer confirmed in a memo today that the struggling paper plans to include in its future circulation reports the new daily section inserted in four community dailies in the Butterfly Project trial that began this month.

USAT's honor box

That would add 360,000 in print weekday circulation and 579,000 on Sundays, for the first time giving the 31-year-old paper weekend circulation data to pitch to advertisers.

Until today, the paper had not said publicly whether it would include the standalone news section published at those papers in Indianapolis; Fort Myers, Fla.; Appleton, Wisc., and Rochester, N.Y.

The decision means USAT could expand circulation even more if the Butterfly Project is extended to perhaps three dozen of the largest 81 community dailies. They have a combined print circulation of 2.3 million on weekdays and more than 3.5 million Sundays. Corporate hasn't said how long the Butterfly test will be run.

Kramer's memo came as the paper disclosed it is once more claiming the No. 1 spot in newspaper circulation by counting free tablet and mobile phone use data on top of print edition sales. In doing so, the paper would overtake the current leader, The Wall Street Journal, and the second-ranked New York Times.

Muddying circulation waters
But the move makes it even harder to do an apples-to-apples comparison among papers, because the tablet and mobile phone users aren't paying readers. The WSJ and NYT figures are for their more valuable paid print and digital circulation.

Overall, this means circulation data will become even less meaningful to advertisers. USAT has long been dogged by critics who questioned the integrity of the paper's print circulation data because so much of it was to business travelers who got free copies given to them by hotels, airlines and other institutional buyers who bought in bulk at a steep discount.

With its new formula, USAT now says it has 2.9 million in circulation vs. 1.7 million in its March 31 report to the Alliance for Audited Media. That compares with 2.3 million for the WSJ and 1.9 million for the NYT, according to a report today in Capital New York.

However, USAT's new count masks another stunning loss of print circulation for the six months ended Sept. 30. It plunged 19% from a year ago, according to a Poynter Institute report today.

USAT's decision to count tablet and mobile data will help soften the blow of steep circulation losses the paper has forecast as a result of doubling its single-copy price to $2 on Sept. 30.

Digital age challenges
Kramer's memo arrives as the AAM (formerly the Audit Bureau of Circulations) released its Sept. 30 report to members this morning. Effective today, the AAM is no longer making public its top-25 circulation reports, however.

The industry has been wrestling with how to count circulation in the digital age, where papers have gained millions of readers who access websites for free. Historically, the industry had always counted paid circulation as most valuable. The shifting accounting has been a particular challenge for USAT, which doesn't charge readers for digital access to its website and digital apps -- unlike the WSJ and NYT.

AAM Executive Vice President Neal Lulofs told Poynter that the group's traditional method of counting circulation is no longer a meaningful metric for advertisers in today’s "complex multichannel, print/digital, paid/free, branded edition, bundled/paywalled, you-name-it environment."

The Butterfly Project, which has been in the works for more than a year, was seen as another way for USAT to regain traction in circulation and advertising while also giving an editorial boost to Gannett's community dailies. The standalone USAT section provides another platform to sell national advertising and adds dozens of pages of additional foreign and national news to the smaller community papers every week. The section is produced by USAT at its main office in McLean, Va.

USAT first lost the No. 1 spot in the September 2009 when the WSJ started included paid digital subscribers. USAT then fell to No. 3 when the NYT launched its paywall and also counted digital subscribers.

Kramer

Kramer's new tactic
Counting tablet and phone app usage is a new marketing strategy for the paper under Kramer, the paper's first publisher with a deep digital background. He founded the widely read financial news site MarketWatch before coming to USAT in May 2012. His mandate: to turn around the paper, which had been losing multimillion dollars in advertising amid steep circulation declines as the paper's bread-and-butter customers, business travelers and hotels, abandoned print newspapers.

Four years ago, USAT had downplayed its drop in the rankings by emphasizing that it remained the top selling print paper, partly as a result of its big single-copy sales.

"Single copy newsstand sales," the paper said in a press release, "reflect customers who actively seek out the newspaper each day and pay full newsstand price, which is widely considered the most valuable circulation by advertisers."

Lafayette, Ind. | This hometown's disadvantage: when Hoosiers basketball isn't local news, what is?

In late August, the top editor of the Journal & Courier in Lafayette, Ind., handed employees a set of talking points to deal with any readers angry about cuts the paper was making in news coverage. Howard Witt suggested emphasizing:

"Our aim is to give print readers more of the in-depth, community-focused news, features and sports content they consistently tell us they want and that no other news provider in this region can match."

Fast forward to Monday, when Witt memo'd staff that one of the paper's handful of photographers is leaving for the much larger Indianapolis Star -- and won't be replaced.

What's this mean for that promised additional local news at the 25,000-circulation daily? Witt didn't say, telling staff only this: "We’ll be adapting our shifts and expectations to account for the fact that we’ll be down a photographer."

But it gets worse

Less than two weeks ago, the paper laid off its star sportswriter, Jeff Washburn, who'd covered Indiana high school basketball for some 40 years -- earning him a spot in the Indiana Basketball Hall of Fame two years ago. The day he was canned, I'm told he was simply escorted out of the J&C building.

Let's just pause here for emphasis: H-e-l-l-o, Corporate? Local news? Indiana basketball? Did anyone back there even see 1986's Hoosiers?

To his credit, Washburn told his apoplectic 3,800 Twitter followers that sacking him was not Witt's doing. "Decision was not a local one," he tweeted, ironically. "Very sad. Numb right now."

For sure, these lamebrain decisions are being made all across Gannett's newsrooms. In August alone, the company eliminated more than 400 jobs throughout the U.S. newspaper division, with more than a few held by journalists. They included the über-popular Joe Heller, editorial cartoonist at the Green Bay Press-Gazette for 28 years.

But it's particularly galling when we know CEO Gracia Martore will once more boast about the company's "hometown advantage" when she briefs Wall Street about the third-quarter results on Oct. 21. In Lafayette, Ind., readers would have a far different opinion.

Related: watch the trailer for Hoosiers, starring Gene Hackman.

Indy | How to edit an editor's note to readers

"This is the debut of what we’ve been telling
 you about – More. You’ll find more than 100 pages of content packed into today’s edition of The Sunday Star."

-- someone identified online only as Jeff Taylor, in a headscratcher of a note to Indianapolis Star readers this morning, as the paper becomes one of four Gannett dailies to start a Butterfly Project pilot test of adding news pages.

If I were this writer's editor, I'd send it back with these thoughts:

1. Tell the readers who you are because that conveys authority and expertise. You're the paper's top editor, after all, as opposed to some lowly copy editor.

2. What's the net increase in pages today? "More than 100 pages of content" would be impressive if there were only, say, 60 pages last Sunday. But if there were 90 pages last Sunday? Meh. It's also unclear whether today's content includes advertising.

3. What is the subject of this "powerful investigative series" you mention in your note? Is it this one about daycare? Wouldn't it make sense to at least provide a link to it directly from your column?

Butterfly Project formally launches tomorrow

That's when The Indianapolis Star and The Post-Crescent in Appleton, Wisc., start adding dozens of pages per week, including new daily, standalone USA Today national and foreign news sections. Some of the added pages will include more local news, although publishers haven't been specific about how much and what kind.

The two dailies will be joined by two more in Fort Myers, Fla., and Rochester, N.Y., on Monday as Corporate starts a pilot test of what's called the Butterfly Project. The initiative, under discussion at least since summer 2012, hopes to boost advertising sales, especially for national ads through the new USAT section.

Indy is adding 70 pages a week; Appleton, more than 48; Fort Myers, 70, and Rochester, about 60.

With tomorrow's debut, USAT will be publishing its first regularly scheduled print Sunday edition since the paper was launched in September 1982. Next weekend would bring the first Saturday edition.

If Butterfly is successful, it could be extended to about three dozen other U.S. community dailies from coast to coast with combined circulation exceeding 2.3 million weekdays and 3.5 million Sundays.

Depending on how it counts those abbreviated national editions, USAT could add millions in daily plus first-ever Saturday and Sunday circulation when it reports to the Alliance for Audited Media for the March 31 period. That would help the paper blunt losses after it doubled its single copy price to $2 last Monday.

Butterfly | 80% of Fort Myers' new pages for USAT; Florida paper is third to outline role in a pilot test

That's according to a Page One note to readers this morning, where Publisher Mei-Mei Chan offered fresh details about how The News-Press will be revamped starting Oct. 7 as one of four test sites for the big new Butterfly Project across the community newspaper division.

Chan

Chan said the Florida paper will add 70 pages a week, including a daily eight-page standalone USA Today news section, a major focus of the Butterfly experiment.

Chan is the first publisher to reveal the size of the USAT section. That detail wasn't included in stories last week about the project's launch at two of the other test sites: The Indianapolis Star and the Rochester Democrat and Chronicle in New York.

As I post this, the fourth site, The Post-Crescent in Appleton, Wisc., still hasn't told readers about the changes in store even after the paper was first identified as a pilot site three days ago. (The paper is leading with a story and video about the appearance of a live chicken during a handgun control event downtown.) In a memo, staff was told the paper would gain more than 48 pages a week, including the USAT section.

Chan says the redesign will make room "for more coverage about local, regional and statewide issues."

Details still missing
But she doesn't offer any details on the type of coverage, including subject matter. She also didn't say how the additional news would be produced after the paper reportedly laid off six staffers in the newsroom in August during another round of Gannett-wide newspaper layoffs that claimed more than 400 jobs.

Gannett papers have been using more reader-generated blogs, photos and videos to fill space as managers chopped away at journalism resources. While that's free, it doesn't come near the quality of professionally-produced government watchdog and other such reporting.

In Indianapolis, Rochester and at USAT, publishers were equally vague about the subject matter and source of any local content to be added. The Star said only that it would add more than 70 pages weekly, and the Democrat and Chronicle will add around 60.

With Appleton adding at least 48 a week, the four papers would be adding a combined 13,000 pages a year -- a lot of costly newsprint when Corporate has recently been cutting back. Newsprint vies with labor costs as the company's biggest operational expense. In the second quarter, CFO Victoria Harker told Wall Street analysts newsprint consumption fell 15%.

Harker and CEO Gracia Martore will likely face many questions when they release the third-quarter earnings report in about three weeks. What's the Butterfly business model? How much advertising, including especially national, will it generate?

And is there another, parallel double-digit subscription rate increase in the works? Will it be a tiered model, where prices for the same delivery frequency will be set higher or lower according to data on average Zip Code household income? (You're seeing that possibility mentioned here for the first time.)

Publisher Chan's note on the bottom of Page One this morning.

Fort Myers incubator
Readers seldom like abrupt change. In Fort Myers, very early reaction was limited to just three comments -- all unhappy.

Mike Myers, who didn't provide his residence, wrote in a comment on Chan's note: "You've learned to spell in recent months; I'll give you that. But your content is lacking. Let's see how you improve on that."

Ken Franklin of Cape Coral agreed: "Along with what Mike Myers said, you should hire a competent copy editor to deal with frequent typos, grammatical errors, and other gaffes. And more staff photographers so you don't have to run file photos with important stories."

Corporate hasn't said how it chose the four test sites, which represent markets in the Northeast, South and Midwest, but not western states such as California.

But Fort Myers was an incubator for an earlier Gannett initiative that tested using mobile journalists who reported with smartphones, video cameras and other contemporary tech tools seven years ago. The paper's editor, Kate Marymont, later was promoted to editorial director for the entire 81-title community newspaper division.

Whatever the selection process, Butterfly adds even more pressure on the publishers and staff at the four papers to prove why the initiative shouldn't proceed to a wider rollout. Corporate has been considering Butterfly since at least summer 2012.

If the tests are successful, the USAT section would be added to about three dozen of Gannett's other biggest papers, according to my readers. Those dailies have combined circulation of more than 2.3 million on weekdays and more than 3.5 million Sundays. In total, Gannett publishes 82 newspapers and owns 23 TV stations, making it one of the world's biggest news groups.

An historic project
Weekday circulation at Fort Myers is 66,385, and Sunday is 91,150, according to the March 31 AAM report. (Find your site's circulation.)

Butterfly would be one of the biggest new initiatives in Gannett's recent history. But it's a risky bet on print's future amid declining circulation and advertising.

For USAT, Butterfly could help Gannett's struggling flagship recover hundreds of thousands in circulation volume that's likely to be lost when it doubles the single-copy price to $2 on Sept. 30. The paper has forecast a 35% plunge in newsstand sales and the near total disappearance of vending machine sales after the price hike, according to an internal company document.

It's unclear whether USAT will try to count the new daily section as paid circulation in its AAM reports. Rochester Publisher Michael Kane hinted at the possibility in his column last week: "We will effectively publish a national newspaper inside the D&C."

Earlier: Here's the Butterfly Project at a glance.

Related: spreadsheet shows circulation of 81 U.S. community papers 2005-2012.

Butterfly | Here's the new project at a glance

Early next month, Gannett will launch a pilot test of the Butterfly Project, a major bet on the future of print newspapers. It's one of the company's biggest initiatives in recent history.

What
The company will add a combined 13,000 pages annually to four of its 81 U.S. community dailies in New York, Florida, Indiana and Wisconsin. Most of that will be in the form of a new, abbreviated standalone edition of USAT inserted in the papers.

If tests are successful, the project would be extended to about three dozen other dailies from coast to coast with combined daily circulation exceeding 2.3 million weekdays and 3.5 million Sundays. Corporate hasn't provided a test timetable.

Why
Butterfly could generate millions of dollars in new national advertising revenue. It may also stem large circulation volume losses forecast by USAT when the struggling paper doubles its single copy price to $2 on Sept. 30.

Where

• The Indianapolis Star. Circulation: 156,850 weekdays, and 286,115 Sundays. Adding more than 70 pages weekly.
• The News-Press in Fort Myers, Fla.: 66,385 weekdays, and 91,150 Sundays. Additional 70 pages.
• The Post-Crescent in Appleton, Wisc.: 35,986 weekdays, and 52,055 Sundays. Adding more than 48 pages.
• The Rochester Democrat and Chronicle in New York: 101,885 weekdays, and 149,590 Sundays. About 60 more pages.

Related: spreadsheet shows circulation of 81 papers 2005-2012.

Fort Myers | It's a very s-l-o-w news night here

The top story on the homepage of The News-Press in Fort Myers is an advance -- an advance! -- for a chamber of commerce event tonight where Publisher Mei-Mei Chan will receive one of the group's annual Apex Awards for women.

With 342 employees, the paper is ranked 35th on a list of Lee County's 100 major employers.

The Florida paper's weekday circulation is 66,385, and Sunday is 91,150, according to the March 31 AAM report. (Circulation database lookup.)

Fort Myers is one of four papers to be redesigned early next month under the Butterfly Project test to include a new daily USA Today section of world and national news. The other dailies are in Appleton, Wisc., Indianapolis, and Rochester, N.Y.

Butterfly | Welcome to Corporate's talking points

"We will add more local news and, in partnership with USA Today, we will add more national, sports and lifestyle news."

-- Publisher Michael Kane, in a note this afternoon to Rochester Democrat and Chronicle readers, announcing the New York paper will join The Indianapolis Star and other sites in testing the addition of a separate daily news section from USAT. (Emphasis added.)

"That section will be produced through a first-of-its-kind partnership with USA Today."

-- The Star, in its own story this morning about the addition of the section starting Oct. 6.


Indeed, in a memo to USAT employees this afternoon, Publisher Larry Kramer uses the word partner no less than five times to describe the new arrangement.

Earlier: Star confirms launch of Butterfly Project. Plus: USAT forecasts 35% dive in newsstand sales with doubling of cover price to $2.

Bulletin: Indy Star confirms launch of 'Butterfly'; project could add new daily USA Today section to dozens of other Gannett community newspapers

In a story published just minutes ago, The Indianapolis Star has confirmed Gannett is testing the roll out of a new USA Today section at a handful of community newspapers that for the first time could give the national daily a print weekend presence across the nation.

Today's USAT detail, Newseum

The Star story is the first public acknowledgement of a plan -- dubbed the Butterfly Project -- that's been in the works since at least summer 2012. The story follows my post about the project two days ago.

The project, if successful, would be one of the biggest new initiatives in Gannett's recent history. Still, it's a risky bet on print's future amid declining circulation and advertising, even as the century-old company battles to become a digital powerhouse. Moreover, it's a direct challenge to USAT's two biggest national competitors: The New York Times and The Wall Street Journal.

Corporate's chief spokesman, Jeremy Gaines, told the Star: "We're always innovating and looking for new ways to engage our consumers. With more than 100 local media organizations nationwide, we’re well positioned to pilot new concepts such as this one."

The new daily section will launch in the Star Oct. 6. The paper said it would be piloted in a "few" other markets; it didn't give a timetable for those tests. I've been told the number of test sites would be five or six, including one in Wisconsin.

[Updated at 6:42 p.m. ET.] The section will be tested at four sites, USAT Publisher Larry Kramer told employees in a memo today. The other three are The Post-Crescent in Appleton, Wisc.; New York's Rochester Democrat and Chronicle, and The News Press in Fort Myers, Fla.

New Star pages: 70 a week
The USAT content will include world, national, and business news and features. The Star didn't say how big the section will be. Readers have told me it could number up to six pages daily, with more on Sundays.

Crotchfelt

Equally important, the section will be accompanied by a big increase in the Star's local news, focused on the suburbs, the Star says. In total, 70 pages will be added to the paper each week with the USAT section. "Our mission is local," Publisher Karen Crotchfelt told the paper. "Local leads, and it always will."

If the Butterfly Project tests are successful, the USAT section would be added to about three dozen of Gannett's other biggest papers, according to my readers. Those papers have combined circulation of more than 2.3 million on weekdays and more than 3.5 million Sundays. In total, Gannett publishes 82 newspapers and owns 23 TV stations, making it one of the world's biggest news groups.

They are in some of the nation's most populous states: New York, California, Ohio and Florida. The papers include The Arizona Republic in Phoenix (300,000 weekdays); Asbury Park Press in New Jersey (100,000) and the Pensacola News Journal in Florida (37,000). The Indianapolis Star's weekday circulation is about 155,000.

Of considerable interest to USAT's national rivals is whether the paper will try counting the new daily section as paid circulation when it submits figures to the industry's Alliance for Audited Media, formerly known as the Audit Bureau of Circulations.

At the Star, correspondent Tony Cook writes, "the investment in the print edition represents a divergence from recent trends in the industry. Many publishers have made significant cuts to their printed product in order to invest in their digital products."

Boost for USAT
For USAT, Butterfly could help Gannett's struggling flagship recover hundreds of thousands in circulation volume that's likely to be lost when it doubles the single-copy price to $2 on Sept. 30. The paper has forecast a 35% plunge in newsstand sales and the near total disappearance of vending machine sales after the price hike, according to an internal company document I obtained this week.

Today's Star detail, Newseum

USAT's circulation sank 8% to 1.7 million during the most recent reporting period, ended March 31. At the same time, its two national competitors surged ahead. The Wall Street Journal jumped 12% to 2.4 million, and The New York Times soared 18% to 1.9 million. Those figures include digital subscriptions; USAT doesn't charge for online access.

A fully extended Butterfly also could give USAT an even bigger national footprint to compete with the WSJ and NYT. Since it was started in September 1982, USAT has only published on weekdays. The WSJ now publishes every day but Sunday. The NYT publishes everyday, and has transformed itself into a truly national broadsheet over the past two decades, elbowing its way onto USAT's turf.

The new single-copy pricing at USAT is part of a broader strategy at Gannett's other 81 dailies favoring revenue over volume. Last year, after raising single-copy prices weekdays and Sundays, then boosting subscription rates, Gannett said circulation revenue companywide rose $53 million, or 5% -- the first such annual increase since 2006.

Ad strategy unknown
USAT has been losing circulation since 2008, when the paper gave up its lead as the nation's top-circulating daily to The Wall Street Journal. That came after major bulk buyers, hotels, stopped providing free copies to their guests as the paper's most important business traveling readers switched to smartphones and tablets.

Murcko

The Star story doesn't say what kind of advertising will be sold in the USAT section. But it's logical the section would carry national advertising sold by Corporate's team led by national sales chief Mary Murcko.

The addition of local news in the Star -- and the possibility the same could happen at other Gannett dailies with a full Butterfly roll out -- comes after a published report this summer saying the community papers were in line for another round of subscription price increases.

In July, Des Moines TV station KCCI said The Des Moines Register had started notifying 80,000 subscribers of a rate hike as high as 40%. The paper's marketing chief, Kurt Allen, told the station the increase is a "Corporate initiative, across all Gannett properties."

A rate hike carrot?
Restoring local news reduced during cost-cutting since 2008 could be used to sell readers on any subscription increases.

Whatever Butterfly's timetable, Gannett Digital is set to launch redesigned websites and mobile applications at 35 community news sites by the end of the year. The new look closely mirrors the radical redesign USAT adopted a year ago this month.

Butterfly comes at an already busy time for Corporate. Gannett is completing the purchase of TV company Belo by year's end. The deal, for $1.5 billion in cash and assumption of $715 million in debt, would nearly double the number of stations in the Broadcasting division.

Gannett's shares surged with the Belo deal's announcement in June. Early this afternoon, GCI was down 30 cents, or 1.2%, to $25.53. Markets overall were flat.

Related: spreadsheet shows circulation of 81 U.S. community papers 2005-2012.

USA Today forecasts big plunge in retail sales with doubling of cover price, company documents say

As its restructuring enters a second year, USA Today is bracing for a 35% drop in newsstand sales when it doubles the single-copy price to $2 on Sept. 30, according to internal company documents.

What's more, already-low vending machine sales could tank entirely, the documents say, leading the paper to remove most if not all the iconic TV-shaped honor boxes installed on sidewalks with the paper's launch 31 years ago.

I received the documents and related information from Gannett Blog readers over the past week.

1982's iconic rack

Any more circulation losses would follow steep declines since 2008 that cost Gannett's marquee brand 600,000 in daily sales -- and with that, its status as the nation's top-selling paper. Further losses also could force USAT to cut advertising rates to reflect a smaller circulation footprint. To be sure, some of the lost ad revenue would be recovered when the cover price rises to $2 from $1 in two weeks. Plus, a parallel initiative called the Butterfly Project may help claw back circulation.

USAT's circulation sank 8% to 1.7 million during the most recent reporting period, ended March 31. At the same time, its two national competitors advanced. The Wall Street Journal jumped 12% to 2.4 million, and The New York Times soared 18% to 1.9 million. Those figures include digital subscriptions; USAT doesn't charge for online access.

The big price hike and other changes come as the paper undergoes a major restructuring that began after Larry Kramer was named publisher in spring 2012. Kramer, founder of the MarketWatch financial news site, is trying to turn the paper around as its bread-and-butter audience, business travelers, shuns print for tablets and smartphones. Kramer's work included overseeing an extensive redesign, begun well before he arrived, of the print edition and the website a year ago this week.

USAT's new pricing is part of a broader strategy at Gannett's other 81 U.S. dailies favoring revenue over volume. Last year, after raising single-copy prices weekdays and Sundays, then boosting subscription rates, Gannett said circulation revenue companywide rose $53 million, or 5% -- the first such annual increase since 2006.

But daily volume fell 8% to an average three million copies, while Sunday declined 3% to five million.

Affluent readers walk
Much of USAT's circulation losses over the past five years came after some of its biggest buyers -- hotels -- stopped providing copies to guests, many of whom were leaving papers untouched outside their hotel room doors. The paper has swung back with a digital news portal sold to 3,000 Hilton hotels, and is talking to other hotel owners about a similar deal.

Kramer

Its unclear how much of USAT's current 1.7 million in circulation will be affected by the price hike, so I can't provide any estimates of aggregate volume losses. Although the increase will hit subscribers, it doesn't apply to hotels, restaurants, airlines and other bulk buyers, according to the documents. Those accounts have historically made up a big part of circulation, and gave the paper a nearly ubiquitous presence among affluent business travelers.

Last year, 76% of USAT's net paid circulation was from single-copy sales at newsstands, vending machines or provided to hotel guests. The rest was home and office delivery, mail, educational and other sales, according to Gannett's annual report to the U.S. Securities and Exchange Commission.

Any circulation and ad losses from the new single-copy price may be mitigated by another Gannett print paper initiative, the Butterfly Project, started more than a year ago. The company plans a pilot test starting early next month, according to readers.

About Butterfly
In the test, USAT will produce a multi-page section of news plus advertising that would be inserted in around a half dozen of the company's U.S. community newspapers, according to several of my readers. Subjects likely would include USAT staples: world, national, business, sports and entertainment. Corporate hasn't officially announced the project, although CEO Gracia Martore dropped hints during the quarterly earnings conference call with analysts in late July.

If the Butterfly test succeeds, the special section -- perhaps numbering as many as six pages -- would then be included with about three dozen of Gannett's biggest community papers seven days a week. Those dailies are published from coast to coast, including New York, Florida, Arizona and California.

Many questions remain unanswered, including especially whether USAT will try to count the section as paid circulation when it submits figures to the industry's Alliance for Audited Media, formerly known as the Audit Bureau of Circulations. Evan Ray, president of Gannett's printing and distribution subsidiary Gannett Publishing Services, is a member of AAM's 38-seat board of directors.

The combined circulation of Gannett's top three dozen dailies is about 2.3 million on weekdays. (I'm not including the Detroit Free Press, which delivers to homes only three days a week, and is sold at retail in limited locations.) On Sunday, total circulation of those 36 papers is about 3.5 million. (Spreadsheet shows circulation by title with losses 2005-2012.)

Those include Gannett's biggest: The Arizona Republic in Phoenix, which sells around 300,000 weekdays, and 540,000 Sundays. Also, The Indianapolis Star, 156,000 weekdays and 290,000 Sundays. Other markets are Louisville, Ky.; Nashville; Des Moines; Rochester, N.Y., plus smaller ones in four Florida cities.

USAT didn't respond to my e-mailed request for comment. Last week, spokeswoman Heidi Zimmerman confirmed the cover price hike after it was reported here.

First weekend editions
A seven-day publication would for the first time give USAT a dedicated print presence on weekends, making it more competitive for advertising with the NYT, which publishes seven days, and the WSJ, which publishes every day but Sunday.

Since it was founded in September 1982, USAT has only published weekdays, largely following the work lives of its core on-the-road business readers.

To be sure, the community dailies have been using USAT stories and artwork virtually since the paper's launch. In more recent years, that came in a single national news page formatted in USAT's typeface and published by most if not all the dailies in lieu of what had been prepared at the community level. Butterfly would extend that far more.

The new section would be produced by USAT editors at the paper's main office at McLean, Va., in suburban Washington.

Other questions

• Would USAT's national edition also lose circulation in cities where the special section is included in local newspapers? That would surely be part of the calculus at Corporate's headquarters when evaluating the Butterfly Project tests.
• Will advertising in the USAT section be limited to national, or will it also include local advertisers?
• How would the section be inserted in papers that don't print in conventional broadsheet formats, including in Cincinnati; Shreveport, La., Lafayette, Ind., and Burlington, Vt.?

The Butterfly project has been in the works at least since summer 2012. It's unclear how long the pilot test will last before a final decision is made on whether to extend it. Martore could give a progress report to Wall Street in mid-October when Corporate releases third-quarter financial results.

Community newspaper publishers were briefed on the project in April. And editors of newspapers that ultimately could carry the section were given details last month.

USAT last raised its cover price to $1 from 75 cents in fall 2008, just as the Great Recession was deepening.

Indy | This just in: the Star is firing!

But wait, no, The Indianapolis Star is hiring!

(Hat tip to Ruth Holladay.)

Louisville | Blog: more talent out the door

Here's a good roundup published today on staffers jumping ship at The Courier-Journal in Louisville, Ky.

Related: Blogger Ruth Holladay's choice words on yesterday's Indianapolis layoffs.

Indy | Tipster: 11 layoffs announced today

That's according to a well-connected reader of The Indianapolis Star. Anyone hearing more?

Indy | Sports department gets big shake-up

In the restructuring, veteran staffers were reassigned, and two high-profile beats are up for grabs. Plus, content changes at The Indianapolis Star will include a new weekly Web-based video show, a digital magazine for online subscribers, and expanded college basketball recruiting coverage, according to a report today by the Indianapolis Business Journal.