PressEthic

Overstock.com coined the phrase, "It’s all about the O," in its television ads. Apparently, it is all about the "O" for the New York Times Company and Time Warner, Inc. also; the "O" meaning online.

The New York Times Company announced yesterday that it will sell nine of its television stations in smaller cities around the United States including Des Moines; Fort Smith, Ark., Huntsville, Ala.; Memphis; Moline, Ill.; Norfolk, Va.; Scranton, Pa., and two stations in Oklahoma City. The monies from the sale will be used to promote the company’s core business, which is, of course, the newspaper.

Janet L. Robinson, President and Chief Executive of the New York Times Company, said,

We believe a divestiture would allow us to sharpen our focus on developing our newspaper and rapidly growing digital business, and the synergies between them thereby increasing the value of our company for our shareholders.

In other words, online is where it’s at, but we knew that already. Media companies have been struggling with how to transition from traditional outlets, such as newspapers and magazines, to the Web-based ones that are dominating the industry. In an environment where more and more consumers have broadband and wireless Internet access, delivering news using the latest technology is a must to keep their attention and drive revenue.

The company expects the nine stations it’s selling to have an operating profit of $33 million this year, but according to Edward Atorino, a media analyst at the financial research firm, Benchmark Company, those revenues do not significantly impact the company’s long-term growth. Instead, they need this capital to reinvest in more lucrative, and popular, multi-media channels.

Time Warner made a similar announcement yesterday saying it would sell off 18 of its magazines that target specific niche or sporting markets such as Popular Science, Field and Stream, Outdoor Life and Parenting. The company’s chief executive, Ann S. Moore, said in a letter to their employees:

While these titles are good performers, Time Inc. is focusing its energy, resources and investment on our largest and most profitable brands, brands that have demonstrated an ability to draw large audiences in print and digital form.

There it is again, that word “digital.” Incorporating multi-media successfully is a tricky business and it seems that media giants struggling with less advertising revenue will have to reorganize their many outlets to come up with the capital to keep up with tech-savvy consumers that want the latest and greatest.

The question is who will buy the New York Times Company’s nine stations or Time Warner’s 18 magazines. Aren’t these just two examples of a larger trend for a changing media business? If these two powerhouses are reinvesting capital into online businesses, why wouldn’t other media companies do it as well? Where does that leave channel 16 in Scranton?