It’s hard to overstate the shot across the bow that the Erie media ship took last week. With the elimination of three positions at Citadel Broadcasting, and the proposed buyout of at least 25 jobs at the Erie Times News, media employment in the Erie DMA is again experiencing significant shrinkage.

The staffing issue is just a symptom of a greater illness plaguing Erie’s (and the nation’s) media outlets. Retail advertising cash is the mother’s milk of media, and retail everywhere is experiencing a major contraction due to the lack of consumer confidence and tight credit. The latter strongly comes into play in the purchase of big ticket items like automobiles, and appliances.

Of course Erie has never been a fast growing retail market, with growth in metro buying power in the low single digits. However, the size of the market, the distance from larger markets, and the economies of consolidation have ensured that there was generally enough advertising cash to go around for everyone.

But if you were forecasting into 2009, is your crystal ball shining bright, or as dark as Saruman’s palantir? It’s looking pretty dark for at least one media industry. Radio’s Lew Dickey from Cumulus Media was quoted over the weekend as saying that “half of the companies in business today will be gone within 36 months.”

Some local market watchers are bracing for revenue drops well into double digits for next year. Cuts in service and staff most likely will continue. Monetization strategies will continue to penetrate the newsroom. There is good reason to believe that Erie media will look quite different early in the new decade compared to now.

Add to all of this a new regulatory scheme by the new President and the only certainty we can believe in is change.

I do think that there is still reason for hope. First, my sense is that Erie will buck the trends of previous recessions and not tank as deeply as in previous downturns. Second, cash-starved corporations may be cornered into fire sales to satisfy shareholders, setting off a new wave of local ownership of media properties, if local folks can access the capital. Finally, online sources for information and entertainment will continue to be more sophisticated and with their superior accountability for advertisers, will accelerate the transition to the new media ad models.

We’ve seen transition before and we’ll see it again, but that doesn’t make it any less painful.