A digital camera found in the home of a New Orleans Times-Picayune photographer was displayed in the “Covering Katrina” exhibit at the Newseum in Washington in 2010. (Saul Loeb/AFP/Getty Images)

Nearly three years on, Tom Lowenburg still regards the transformation of his hometown newspaper the way a jilted lover would regard his ex — with a mixture of nostalgia, bitterness and regret.

“They chose to decimate their publication,” says Lowenburg, a local bookstore owner who grew up here. “News is important to a community, especially this one. And they made a decision not to be a viable newspaper.”

Hurricane Katrina dealt a staggering blow to New Orleans 10 years ago this week. A far lesser, but still lingering, punch came in late 2012 when Advance Publications, the owner of the New Orleans Times-Picayune, launched a bold strategy to arrest the paper’s financial free fall. With the swiftness of a cloudburst, Advance laid off 200 employees, including about 15 percent of the news staff, and reduced publication of the daily paper to Wednesdays, Fridays and Sundays. Henceforth, Advance declared, the Picayune would emphasize its Web site, NOLA.com.

All at once, New Orleans, a city that celebrates tradition and quirkiness in about equal measure, became the largest in the United States without a daily newspaper. It also became an inadvertent test market for the future of journalism, at least the kind that newspapers have provided readers for centuries. Advance’s strategy has drawn the attention of publishers around the world, all of whom have the same question: Is this the way to ensure that newspapers survive in the digital age?

The answer still isn’t clear.

Jim Amoss, editor of the Times-Picayune, is shown in the newsroom. (Michael DeMocker/NOLA.com/ The Times-Picayune)

Among big-city dailies, the Picayune holds a special place in its home town. First published in 1837, the paper has been a thread woven through New Orleans’s rich history. As the state’s largest paper in recent decades, the Picayune (the name refers to a coin from the city’s early Spanish days) developed a well-earned reputation as the scourge of Louisiana’s rascals and rogues, from the legendary Huey Long to Klansman David Duke. The paper’s denizens over the decades included Mark Twain and O. Henry, as well as “cadaverous smokers, hopeful novelists, skirt-chasers, functional alcoholics and one eccentric spinster who wore her hat indoors,” as Bruce Nolan, a 41-year veteran of the paper, wrote in 2012.

The Picayune’s finest hour came 10 years ago as the winds whipped and the levees crumbled. Long after other news sources had gone dark, the paper’s journalists stayed on the job. Their diligence and courage — at one point, staffers braved the post-storm chaos to distribute copies of the paper — earned the Picayune the city’s enduring gratitude and two Pulitzer Prizes, including one for public service. T-P employees proudly wore T-shirts reading, “We Publish Come Hell and High Water.”

And so Advance’s announcement of a print cutback and “digital-first” approach in October 2012 particularly stung. Loyal readers started a “Save the Picayune” campaign and held rallies at places such as Lowenburg’s bookstore. There were calls for the paper’s sale to a local caretaker. Advance, based in New York, said it wasn’t selling.

“It was like a death,” says Anne Milling, 75, a longtime philanthropist and civic leader who helped organize opponents of Advance’s plan. “Everyone here depended on the T-P. It was there after Katrina. They were a kind of glue that held this city together.

“This city is different,” Milling continues. “We’re not Duluth or Atlanta or Houston. The Times-Picayune set the tone of civic discussion, [about] politics, about rebuilding, the educational system, you name it. You need that common voice. A Web site isn’t the same thing.”

High atop NOLA.com’s of­fices on Canal Street, the Times-Picayune’s managers are determined to look forward, not back. Ricky Mathews, the company’s president, and longtime editor Jim Amoss say remaking the paper was a necessity, compelled by the stark facts of the newspaper business. Although Mathews and Amoss won’t disclose financial details — Advance is privately held by the billionaire Newhouse family — they strongly suggest that the combined operations of the Times-Picayune and NOLA.com have been losing money since 2012.

“Our company recognized that iteratively changing the business culture was not going to solve the problem,” says Mathews, whose face appeared on mock “Wanted” posters at the peak of the “Save the Picayune” campaign. “We could no longer do it incrementally.”

U.S. weather disasters that topped $1 billion

Amoss, a 67-year-old New Orleans native who has run the newsroom for 25 years, likewise says standing pat would have been “like Kodak holding on to the film business” — which it did until it went bankrupt.

It’s certainly not news that America’s newspapers have been battered by the Internet and the recession. Over the past decade, the nation’s 1,300 daily newspapers have lost about 25 percent of their revenue and an equal percentage of their daily subscribers, according to the Newspaper Association of America.

This has led to round after round of cost-cutting that has pushed thousands of journalists out of newsrooms across the country. In New Orleans, the casualties included some of the heroes of the Picayune’s Katrina coverage, such as Nolan, who was fired in 2012 and then declined an invitation to return.

The reorganized newsroom is divided into print and digital halves, each managed by a separate subsidiary. NOLA.com is plainly the favored side. Its journalists, about 130 in all, work in ultra-modern offices on the 31st floor of a downtown building that has sweeping views of the Mississippi River waterfront.

Times-Picayune staffers — numbering just 29 — labor in the paper’s aging offices near the Superdome, hard by an expressway overpass. The Picayune employees essentially are engaged in repackaging for print what has already appeared on NOLA.com.

By emphasizing digital news and cutting its print schedule, Advance is betting that it can save money on overhead, such as running presses and fleets of delivery trucks. It has adopted a similar approach at its papers in Cleveland; Portland, Ore.; and Alabama.

So far, Advance is the only chain publisher to turn its dailies into three- or four-times-per-week papers. Other companies may be reluctant to follow out of fear of inciting the kind of public relations backlash Advance faced in New Orleans, says Rick Edmonds, a media business analyst for the Poynter Institute.

“The seven-day reading habit is hard-wired into people’s lives,” he says. “You disrupt it at your own peril.”

Of course, many publishers would gladly switch entirely to lower-cost digital publishing if they could profitably do so. But they can’t. Traditional print ads and subscriptions may be shrinking fast, but they still generate the vast majority of revenue — about 88 percent for the average newspaper in 2013, according to the Newspaper Association of America.

In other words, NOLA.com could not survive long without the money the Times-Picayune generates.

The good news, Mathews says, is that NOLA.com has shown “double-digit” ad growth since 2012. He proudly says the site attracted nearly 7 million unique visitors last month, a record total.

The bad news? The Times-Picayune is declining at a double-digit rate, too, which means it is losing ad revenue faster than the digital side is gaining it. The paper’s circulation, hurt in part by the loss of residents after Katrina, has plunged to around 95,000. The figure was 257,000 just before the storm.

Asked whether the “digital-first” strategy is a success, the normally voluble Mathews pauses. “I don’t think you can say that,” he replies. “There’s not a finish line that any of us see in the near future.”

Part of the reason may be that Advance’s plans to re-engineer NOLA.com and the Picayune were themselves disrupted by an unexpected arrival. Soon after Advance trimmed the Picayune, the nearby Baton Rouge Advocate pounced, launching a seven-day-per-week New Orleans edition. Suddenly, New Orleans had two newspapers.

A new arrival

Amoss and Mathews dismiss the Advocate as little more than a vanity play for its owner, John Georges, a supermarket mogul who has run unsuccessfully for mayor of New Orleans and governor. They say that Georges (D) launched the paper merely to raise his profile among voters in southern Louisiana, that there is no business rationale for a second paper, particularly one as small as the 31,000-circulation Advocate.

Georges seems delighted to disagree.

“I may be the flea having sex with the elephant, but I’m having a good time doing it,” he says. “I’m very comfortable promoting the virtues of a locally owned, seven-day-a-week newspaper.” (And no, Georges adds, he has no plans to run for office).

To get a jump on its rival, the Advocate has hired a number of the Picayune’s former stars, including Walt Handelsman, a two-time Pulitzer Prize-winning editorial cartoonist. Georges also snapped up two of Amoss’s top deputies, Dan Shea and Peter Kovacs, after they were ousted in the paper’s 2012 purge. Shea is now president of Georges’s newspapers in Baton Rouge, Lafayette and New Orleans. Kovacs is vice president and editor.

Despite playing down the threat from the Advocate, Advance has nevertheless modified its three-days-per-week strategy since Georges came to town. In early 2013, Advance began printing a slimmed-down Picayune for newsstand distribution on the four days it had stopped publishing. Last year, it added home-delivered “bonus” editions on Saturdays and Mondays during the football season. (It’s not clear whether those will resume this fall.)

Advance was forced to add the editions by the Advocate’s arrival, says Rebecca Theim, a former Picayune reporter. The new editions mean Advance saved only “a fraction” of what it expected when it announced its “digital-first” approach in 2012, says Theim, the author of the 2013 book “Hell and High Water: The Battle to Save the Daily New Orleans Times-Picayune.”

All of this maneuvering obscures a larger question about the news in New Orleans: Are readers better off now than they were when the Picayune was winning Pulitzers for its Katrina reporting?

Amoss says the answer is yes, that digital news gathering tools offer far more flexibility and interactivity for readers than a traditional newsroom could ever muster.

Certainly, NOLA.com and the Times-Picayune are capable of fine work. A 2013 investigative series called “Louisiana Purchased” (conducted with New Orleans TV station WVUE) exposed numerous irregularities in state campaign spending and won several national awards. The paper’s long editorial crusade for flood-insurance reform paid off in national legislation last year.

As Katrina-plus-10 approached, NOLA.com has offered substantial retrospective coverage as well as a forward-looking series called the “Future of New Orleans.” In the Web site’s office this month, reporters, designers and editors put the finishing touches on some of the many articles, photos, video and audio pieces that will commemorate the catastrophe.

But at times NOLA.com can be heavy on the light stuff and light on more substantive fare. At one point in mid-August, 14 of the 17 articles leading NOLA.com were about the National Football League preseason game between the New Orleans Saints and the Baltimore Ravens. One article, about a Saints player’s postgame tweets, was three sentences long.

“Neither NOLA.com and the T-P nor the Advocate is as strong as the T-P was right after ­Katrina,” says Leslie Jacobs, a business executive and ­education-reform advocate who subscribes to both papers. Even so, she says, the Advocate’s arrival has forced NOLA.com to have more and better reporting than it would have had without the competition.

Jacobs laments, however, that the city has been diminished by a newspaper landscape in so much flux.

“People are no longer on the same page,” she says. “There is a loss of civic cohesion, as there is no longer a single, dominant narrative.”

More change is afoot. In another cost-saving move, Advance has announced that it will close its New Orleans printing facility and shift production of the Times-Picayune from New Orleans to Mobile, Ala., a move that will eliminate 100 local jobs later this year. The shift means that New Orleans’s leading newspaper will no longer be published in New Orleans, or even in Louisiana.

Last week, rumors swept NOLA.com and the Picayune that another round of newsroom layoffs was imminent, the first since 2012.

Mathews won’t comment directly. But he won’t say no, either. “We’re not hiding from the fact that we’ve got to constantly work to change our cost structure to put it in line with our revenue,” he says.

In New Orleans, it seems, the Times-Picayune hasn’t seen its last storm.

An earlier version of this story used the word “succeeding” in place of “a success” in reference to a question asked to Ricky Mathews about a digital-first strategy. This version has been updated.