Newspaper chains won’t save local news

If local news is going to be saved, it's going to be through hundreds of lean, digital native startups.

Image via Pxhere

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Newspaper chains won’t save local news

For years, there was a simple story told about why local newspapers were struggling. First came Craiglist, wiping out the lucrative classified ads virtually overnight. Then Facebook and Google began vacuuming up more and more of the online advertising market, leaving newspapers with mere table scraps.

It’s a convenient story because it places blame on external factors, when in reality the newspapers themselves were structured in such a way that made them resistant to change. Researchers Ellen Clegg and Dan Kennedy published a great piece in Nieman Lab that tackles these more nuanced factors: “The local news crisis will be solved one community at a time.”

Starting in the 1970s, publicly traded chains began taking over newspapers, extracting massive profits and cutting back on coverage, leaving the business unprepared for the deluge that was to come. More recently, hedge funds have moved in, bleeding newspapers of their last remaining revenues rather than investing in the future. Compounding all this is that, in many cases, corporate owners take on massive amounts of debt to build their chains and then extract revenues from their newspapers to pay it down.

The Covid-19 pandemic, whose end in the U.S. may finally be coming into view, resulted in further layoffs, furloughs, and closures, according to the Poynter Institute.

Yet even in the midst of this carnage, innovative, independent local news organizations are serving their communities and providing them with the news and information citizens need to govern themselves in a democracy. Examples include nonprofit startups, news co-ops and even old-fashioned newspapers that are reinventing themselves under local leaders who bought them back from chain owners.

I agree with this assessment. Legacy newspapers chains are not going to make a comeback. If local news is going to be saved, it's going to be through hundreds of lean, digital native startups.

I’ve profiled many of these companies in my newsletter and podcast, startups like The Discourse, 6AM City, WhereByUs, ARLnow, TAPinto, The Charlotte Ledger, and Daily Detroit. Having spent so much time speaking with these entrepreneurs, I noticed a few consistent themes:

These startups are lean: Newspaper chains are incredibly top heavy. In addition to the expensive print infrastructure, they employ entire armies of vice presidents and other business-side operators who contribute very little to the publication’s core product. Media startups, on the other hand, have much smaller staffs, with most of the resources dedicated to editorial. Often, just one or two journalists write the bulk of the content.

They embrace native advertising: Local businesses are never going to embrace programmatic display ads, mostly because they’re difficult to place and not very effective. Most of the startups I’ve profiled aren’t squeamish about publishing native ads. Not only is it easy for a local business owner to understand how these ads work, but readers can sometimes actually get a lot of value from sponsored articles. “Our clients have had some really significant success because it's providing useful information to readers in a format where they know it's an ad, but they don't care because they're getting useful information that’s relevant to them,” ARLnow founder Scott Brodbeck told me.

They opt for memberships over subscriptions: Over the last several years, newspaper chains have begun rolling out freemium and metered subscription paywalls. These models have worked well for national outlets like The Washington Post and New York Times, but only because these newspapers are able to publish thousands of articles each month, making it easier for the average reader to trip the meter. Skeleton staffs at local newsrooms aren’t going to be able to match that content output. Many media startups have opted for membership models instead, which allow them to keep all of their content free. I recently profiled a company called The Discourse, which has perfected the art of asking readers for money. “The relationship typically starts with an email signup, and through the publication’s newsletters it will poll readers on which investigative story topics to pursue,” I wrote. “Then, once the community has chosen a topic, The Discourse hits them with messages that ask for money.”

It’s an exciting time for local news. As someone who got his start as a local newspaper reporter, I sometimes fantasize about moving to a small city with about 60,000 - 80,000 people and launching a newsletter. That’s how real I think the opportunity is.