Emerging For-Profit Models in Local News

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July 3, 2019, 12:23 pm

The following case studies are part of the Landscape Study of Local News Models Across America

Minneapolis Star Tribune

The Minneapolis Star Tribune, a for-profit daily, delivers comprehensive coverage of the state of Minnesota, digitally and in print, on a 24/7 basis. The paper is owned by billionaire Glen Taylor, who is also the majority owner of the Timberwolves and Lynx basketball teams and a former Republican state senator. With 62,000 digital-only subscribers, 225,000 daily print and digital subscribers, and 360,000 Sunday print and digital subscribers (it also has 28,000 replica edition subscribers), the Star Tribune has been much lauded for its turnaround in the digital era as other newspapers have failed. It takes in $200 million in revenue annually from circulation (50%), advertising (40%), and printing and distribution for third parties, e-commerce, and events (10%). It has 232 full-time equivalents currently in the newsroom, with some additional unfilled positions, as well as 350 active freelance contracts on file. “We have stayed profitable, but it gets tighter every year,” said Michael Klingensmith, the paper’s publisher and chief executive, in an interview with the WSJ. The Star Tribune will need to surpass 150,000 digital subscribers to be sustainable in the longer term, he said, and his hope is to double digital subscriptions by 2025 or sooner.

With a market size of close to 5 million, this seems possible. The Minneapolis and St. Paul metro area has 3.6 million people, the state of Minnesota has 5.6 million, and the paper is also looking to millions of out-of-state digital reader prospects. Klingensmith confirmed by email that the Star Tribune has seven daily email newsletters and more than half a dozen sports newsletters that are sent to subscribers more than daily, depending on the season. It also distributes at least eight weekly newsletters on a host of topics and a monthly subscriber newsletter. It also produces occasional newsletters about special projects or investigations and frequent breaking news alerts.

“We place a high priority on accountability reporting, from daily watchdog stories to data-driven explainers to year-long in-depth investigative projects,” Klingensmith wrote in an email.  “Enterprise and in-depth reporting on an array of topics and beats – from the environment and politics to local businesses and global companies based here – is key to engaging our community. Narrative reporting about the people, the place and the social fabric of our community is essential, particularly in the area of lifestyle, religion, arts, entertainment, outdoors and sports.” Noting the parallels with the Henrys, who own the Boston Red Sox, one could begin to argue that sports teams and a thriving local newspaper are a useful combination to weave the energy of a city towards local storytelling and hometown pride, providing investigative units are prioritized.

The Star Tribune has prioritized “solutions-driven” reporting in daily and project reporting and made an effort to put out stories that can serve as accessible “utility” reporting to help readers better navigate their lives. As we approach the next presidential election, dailies can take note of the Star Tribune’s “Be a Better Voter” feature from 2016. The newspaper helped readers follow the steps of registering to vote, explore the Election Guide on the candidates, and look at campaign financing data. An “Essential Twin Cities Guide” has offered entertainment and dining tips for visitors to the Super Bowl and the Final Four when those events were held in Minneapolis. It has also recently added a “Curious Minnesota” feature to allow readers to assign the newsroom stories they believe should be told and vote on vote on their favorite suggestions in an effort to increase audience engagement.

The Star Tribune does collaborate with companies and nonprofits. It accepted Facebook funding for a social media intern this summer through the University of Missouri and it is a “continuity” partner of the Knight-Lenfest Newsroom Initiative’s Table Stakes program. In the past, it has partnered with the Solutions Journalism Network on coverage of the Somali community in Minnesota.

The Information

If The Texas Tribune is the poster child for nonprofit upstarts, The Information, a for-profit subscription based digital media product, is the “it kid” for the commercial crowd. While The Information feels local for residents of Silicon Valley given it is a one industry town, it is really a B2B product more akin to The Wall Street Journal or Wired magazine. With subscription rates unaffordable to most and a focus exclusively on the tech industry and its leaders, The Information has defined its own market from the get-go and in the Valley it is considered the local news. Founded by Jessica Lessin, a former WSJ reporter who quit her job and launched the niche site for tech-based executives in 2013, within three years The Information turned a profit with a price tag of a $400 for a yearlong subscription. Today The Information has tens of thousands of subscribers across 84 countries.

Lessin is independently wealthy, like Texas Tribune founder John Thornton (her husband is close friends with Mark Zuckerberg and a former software engineer at Facebook who sold his startup to the tech giant) and she was able to seed her company with what she once described in an interview as “less than tens of millions of dollars”. She timed it right with a unique digital media value proposition specific to her region and micro climate of Silicon Valley given the scarcity of national media on the West Coast and legacy NYC positioning as the media engine that drives most of the national conversation and business news. These are facts that must be accounted for when we consider models like The Information, The Texas Tribune and The Washington Post as models to emulate. All three began with deep pocketed founders, in unique situations which may not be easily replicated or scaled by those hoping to start an online magazine or newspaper in their county, town, or city. This said, it is the leading example for how to build a for-profit online magazine that has no legacy brand, and there is a great deal to learn from Lessin’s beautiful interface, consistent email newsletters, professional tone, branding, and succinct delivery of topical news. The Columbia Journalism Review reported in 2016, when The Information was only three years old, that 10 of the 11 most highly valued tech companies subscribed to The Information.

Subscribers are Lessin’s key focus and she ensures they have access to in-depth, data-driven analysis, calls with founders and VCs, roundtables, and special events such as the subscriber-only Autonomous Vehicle Summit in San Francisco held in June. You have to afford to fly there or live there which feels either hyperlocal or uber-globalist. Subscribers are given a bio page to encourage community involvement. The Information’s advisory board reads like the who’s who of tech and new digital media, including venture capitalist John Doerr (worth $7 billion), Axios and Politico cofounder Jim VandeHei, ProPublica executive Chairman Paul Steiger, and Quartz editor-in-chief Kevin J. Delaney. The Information is a great example of the new “glocal.”

Philadelphia Inquirer

The Philadelphia Inquirer counts 32,000 digital subscribers but it arrived late to the digital subscriber game. It expects to catch up to its peers. As a for-profit-public-benefit-corporation owned by a nonprofit organization, it is an early model many local newspapers are exploring. Today, it has put all of Philadelphia Media Network under one digital brand, Inquirer.com. With over 250 journalists in Philadelphia that focus on eight counties, it is a big believer in collaboration, wrote executive editor Stan Wischnowski. Wischnowski says partnerships expand coverage locally, regionally, and nationally. Examples include: a collaboration with The Boston Globe on the clergy sex-abuse scandal, which started with a phone call from editor to editor; a ProPublica investigative series on immigration; and regional collaborations with Spotlight PA, a Pennsylvania investigative team with Pittsburgh Post-Gazette, Lancaster Newspapers and Temple University. Spotlight PA has a dedicated independent editor and a 12-person reporting team to serve as a state watchdog. Locally The Inquirer collaborates with Resolve Philadelphia and Solutions Journalism.

Wischnowski and his team also revamped their social media strategy to focus more on engagement to grow The Inquirer’s digital base. In a recent Poynter interview, The Philadelphia Inquirer reports moving away from time on Twitter. With “a subscription business model, a 2 percent return on 80% of effort just isn’t good enough.” Today, its Twitter accounts are automated for the 2-3 percent return but the seven-person audience team can now focus on growing its Instagram account, streamlining Facebook posts to fewer high-engagement posts, redeveloping its staff-written newsletter strategy, and launching a smart-speaker briefing. With The Inquirer’s shared interests with the Lenfest Institute and a mission “to develop and support sustainable business models for great local journalism,” we can likely expect to see a great deal more innovation for local news coming out of Philadelphia.

Berkeleyside, CA

Berkeleyside is a local news outlet that is a much celebrated for its award-winning independent news in Berkeley, CA and also a much-admired study by those seeking for-profit models in hyperlocal markets. As the only news outlet dedicated to covering Berkeley, California, it is now counting an average of 1 million page views and 300,000 unique visitors a month. It has 15,000 newsletter subscribers, 61,000 Twitter followers, and 22,000 Facebook followers. With Berkeley home to around 120,000 people, its market size is niche. It also covers the local food scene in Oakland and the East Bay, which gives it a potential market reach of 500,000. Given the site currently has 300,000 unique visitors a month, that is pretty impressive market saturation.

Berkeleyside provides local news, be it breaking, regular, or investigative, and its coverage embraces crime, local government, education, the arts, business, community, and real estate. It also has obituaries and an opinion sections. Revenue paths include advertising, membership, and events. They produce daily and weekly email newsletters, including the popular Nosh Weekly, which delivers the top East Bay restaurant and food stories. It does not use a paid subscription model. Existing collaborators include KQED, Cal Matters, and ProPublica. Berkeleyside has seven full-time staff and over 30 freelancers.

Richland Source, Ohio

The Richland Source was founded in 2013 by Carl Fernyak, on the belief that North Central Ohio was yearning for a forward-thinking, community-focused, digital newsroom dedicated to covering Richland County with daily stories by and for the people in the area, as per its website. It is a hybrid focused on local news while also providing social media consulting, ad models, community events organizing, and small-batch apparel production for businesses, foundations, and nonprofits in the area. The staff proudly display their core values in their office in downtown Mansfield, Ohio and write on their website, “That means that our news mix is decidedly more holistic than traditional news sources and devotes about 90 percent of our headlines to the lives, businesses, schools, and activities of extraordinary residents.” They take it a little further as a metaphor. “We aren’t all rainbows and unicorns, however. We absolutely report the challenges confronting our region, but we don’t live off of it or attempt to exploit them. Think of our news mix like you would a balanced diet and regular exercise. Spending all our resources reporting the worst parts of our region is like living off Cheetos and whiskey. It might work for a while, but it will eventually make you sick.” The Richland Source has covered stories about flooding, infant mortality, and race while also highlighting the positive impacts of residents and businesses alike.

It’s an interesting model (similar to Flint Beat owned by Brown Impact Media and to the WhereBy.Us sites we describe later in this paper) where creative services are part of the offering, so long as those steering the editorial decisions remain committed to speaking truth to power. As we noted earlier, news outlets must remain vigilant to avoid the blurring of lines just as when legacy newspapers were owned by the wealthiest in a town or city. Society must demand transparency and editors willing to hold truth to power, even if it is to the one who funds them. That story is as old as time.

Santa Rosa Press Democrat

Christine Hare writes a wonderful newsletter on local news for the Poynter Institute. In a recent installment, titled “The Pulitzer-winning paper has local owners. They bought it from a chain,” Hare points out that while the locally owned Sonoma country paper, the Santa Rosa Press Democrat, won a Pulitzer for breaking news, large corporate media owners like Gannett, GateHouse, Digital First Media, and McClatchy get a lot more attention for shrinking newsrooms. Nearly six years ago, a group of local business people bought the Sonoma County newspaper from Halifax Media. Again, we see influential residents, including two determined widows, saving the local newspaper. Jeannie Schulz, the spouse of the late Charles M. Schulz who built his Peanuts comic strip empire through newspapers, and Norma Person, whose late husband Evert Person sold the Press Democrat to The New York Times in 1985, were two of the six residents writing checks.

Using the ever-popular events model in a time when people crave connection, The Press Democrat brought in $1 million in revenue last year from its event business. With 15 newsletters, a regional magazine that publishes six times a year, wine competitions, and a Spanish-language site, it has doubled digital-only subscriptions in the past year to 6,000. A digital-only subscription costs $10.50 a month (the same pricing at the Bozeman Chronicle and in a similar size market), digital access plus the Sunday print edition is $14.50 a month, and an unlimited print and digital subscription is $24.50 a month (what major markets like The Boston Globe charge for digital-only access). The Press Democrat predicts to pay back all its investors by the end of this year. It’s a small win but a model for tiny communities that are determined to have a local newsroom in this digital era.

The Bozeman Daily Chronicle

Founded in 1883, the Bozeman Chronicle began as a weekly in 1883. In 1996, the for-profit Chronicle began publishing each morning, and today a digital subscription is $10.40 a month. Owned by Adams Publishing Group, revenue comes largely from print and digital advertising and circulation. It also holds events through its advertising department: a wedding show, salutes to 20 over 60, 20 under 40, and such. Today, its 12,000 subscribers receive 1-2 daily email notifications, and more frequent emails if there is breaking news. The Daily Chronicle’s primary focus for coverage is on Bozeman and Gallatin County, which has a population of about 100,000. Its 12 full-time employees have worked with the Solutions Journalism Network on local projects and statewide collaborations with other newspapers. The news covers Bozeman local government, schools, law and order, and the environment. But, Nick Ehli, Managing Editor of the Bozeman Daily Chronicle says, “We also strive to give our reporters time and space – at least once a week – to tackle significant projects, in-depth stories that readers aren’t going to find anywhere other than the Bozeman Chronicle.”

BoiseDev

BoiseDev is a founder-run microsite focused on the development and growth of fast-growing Boise, Idaho. In 2013, founder Don Day began tweeting on the subject of his city’s hyper-development growth and it led to a newsletter in 2015, then the launching of its digital home in 2016. Day says BoiseDev’s editorial focus is on unique and unduplicated coverage of local city politics, business changes, and general growth. Day writes both long form and short news alerts, and maintains an extensive Project Tracker tool for monitoring city development and building projects. Since 2018, BoiseDev reports on its website that it is the most-read business news source in the state, according to SimilarWeb analytics. Its work has been cited by CNBC, People Magazine, Fox News, Vox Media’s Curbed, Idaho Press, KIVI-TV, KBOI-TV, KBOI-AM, KTVB-TV, Idaho Statesman, Spokesman-Review, Boise State Radio, Boise Weekly and more. Day uses an active Facebook group to find many of his stories and ideas from the community. His membership model, BoiseDev FIRST, is priced at $110 a year or $10 a month, and his popular development and business roundup has secured him 260 paid users after only five months.

Revenue models include subscription, sponsorship, membership, and potential “add on” sponsored products in development. The Boise, Idaho metro area is home to more than 800,000 residents and is the largest city in the state. Paid members receive a daily email newsletter while non-members who have signed up to receive emails receive two to three per month. In a time of solutions journalism and collaborative efforts to mobilize local news, Day says he has had preliminary discussions with Membership Puzzle, a research project through NYU, and has considered Report for America but is not currently participating in either program. He hopes to add paid staff positions in the next year. The business is currently profitable with no outside investment.

Colorado Sun

Only launching last September, the Colorado Sun is a journalist-owned, ad-free news outlet based in Denver. In an email interview, senior editor Dana Coffield wrote, “ we strive to cover all of Colorado so that our state — our community — can better understand itself.” This for-profit has codified its mission to save journalism in Colorado and has incorporated as a Public Benefit Corporation. [A Public Benefit Corporation is still taxed the same as an S or C corp. Benefit corporation status only affects requirements of corporate purpose, accountability, and transparency; everything else regarding corporation laws and tax law remains the same.]

The Colorado Sun exclusively covers Colorado through explanatory or investigative reporting. It is attempting to recapture an audience lost to clickbait. “You’ll never see a spot news story about a murder or a robbery, for example,” writes senior editor Dana Coffield. “We do this by writing stories about subjects that are relevant to people who live in Colorado, or tailoring our writing and reporting to help people understand why the subjects we choose are relevant to them. We are appealing to readers’ sense of doing the right thing, asking them to become members in order to keep our content in front of a pay wall.” Its model is similar that of the Guardian, which has a long and successful record of asking readers to pay up if they value independent journalism.

The Colorado Sun publishes two super-premium newsletters and expects to add more. It is also actively recruiting sponsors and underwriters. It has accepted grant money and is currently attempting to find concessionary capital that will allow it to scale up more quickly.

To date, Colorado Sun has about 22,000 subscribers to its free and paid newsletters and has earned three times more paying members than it expected to have after its first nine months. Its potential market is 5.7 million people. Its focus is the state of Colorado and state government. It does not cover city-level Denver politics, but occasionally write stories about things going on in Denver. Coffield believes that about a million people out of it’s potential market represent a “revenue opportunity” willing to pay for the newsroom’s work.   Colorado Sun publishes a free newsletter three times a week while members receive a daily newsletter. It also has a daily push that arrives at five a.m. each day. With a staff of 11 full-time journalists (two editors, a tech editor and eight reporters) it also relies on three freelancers on part-time contracts and a big stable of freelance photographers, graphic reporters, and writers to better approach its goal of being a statewide publication.

The outlet is actively engaged in statewide and local collaboration and planning for a solutions journalism collaboration involving legacy TV, public TV and radio stations, and other word publications. “Like every other publication in the U.S., we applied for a ProPublica grant for investigative support,” Coffield wrote in our email correspondence.

When I asked Coffield if there are other emerging models that she admires in local news, she wrote, “The Longmont Observer (here in Colorado) which is attempting to get the local library to help with a taxing district for itself and we have a crush on Berkeleyside, for its willingness to ask its Bay Area readers to finance the operation with zero hope of getting paid back.”

Berkshire Eagle, Pittsfield, MA

Hans Morris, a now-owner of the Berkshire Eagle, visited Santa Rosa to learn about the Press Democrat and how local residents bought the newspaper from the Halifax Media Group. It was an early inspiration for the Berkshire Eagle. More inspiration came when fellow owner Fred Rutberg, who had lived in Stockbridge, Massachusetts for 40 years, was at a talk by veteran journalist Joe Klein who said, “Democracy requires citizenship and citizenship requires a town square,” Rutenberg told The Boston Globe.

Morris returned home after seeing the Santa Rosa Democrat, and with Rutenberg inspired by Klein, in 2016 the two businessmen, along with other local investors, bought the Eagle and three Vermont newspapers from Digital First Media. Since then they’ve added 50 jobs, including replacing those that the chain had consolidated such as design, finance, and a call center. “In my view, you can’t cut your way to a successful business model,” Morris told Poynter. “However, it’s not a panacea. You need to create a successful, thriving, economically profitable company, otherwise it won’t be there in 50 years, regardless of what the new owners think.”

Today it is a private, for-profit, and locally owned company with a lofty goal “to become the finest community newspaper in the United States,” executive editor Kevin Moran wrote in an email. Moran said that his goal is to cover the Berkshires, exclusively, and added, “there’s no place like it anywhere in the country.” Revenue comes from advertising, subscriptions, events, niche publications, and commercial printing. Daily circulation is holding at 14,179 and at 16,711 on Sunday, according to the latest figures from Alliance for Audited Media, while digital subscriptions increased to 3,976, as of March 2019, from 2,474 last June. Berkshire County’s population is 130,000. The Eagle pushes out daily newsletters and alerts as often as breaking news warrants, plus specialty newsletters such as one covering food. In news, it now has 45 full-time staff and at least 20 active correspondents. Local news is its number one priority, with an emphasis on investigative reporting, local opinions, and covering the cultural mecca that is the Berkshires. A digital-only subscription is 99 cents for the first 30 days and $13.00 per month thereafter. Moran adds, “you can cancel anytime, but why would you want to?” Daily print delivery with digital access is $26.00 a month, competitive with other dailies across the country. Sunday delivery with digital access is $17.33 a month. Rutberg would not disclose to the Boston Globe whether the paper is profitable.

The Chattanooga Times Free Press

The Chattanooga Times Free Press is a for-profit daily newspaper published in Chattanooga, Tennessee. Its goal is to be the most accurate, thorough and interesting source of news, sports and entertainment for Chattanooga and 12 surrounding counties in Tennessee, northwest Georgia and Alabama. Editor Alison Gerber wrote in an email, “We gather and report local news that improves the lives of our readers by connecting them deeply with their community.” Daily and Sunday home delivery subscribers combined number 30,800, but that does not include single-copy newspaper sales in a city with a population of 179,000 and a greater metro area of over half-a-million residents. Revenue sources include: print and digital advertising; services sold through a digital marketing agency; and print and digital subscriptions. We have an increased emphasis on digital-only subscriptions.”

The Times Free Press currently relies on 16 newsletters, four of which are daily and the remainder weekly, as well as breaking news emails which average one to four per week. For the past four years, they have collaborated twice with the Solutions Journalism Network and this year they will experiment by hosting a Report for America corps member starting June 1.

Gerber reported that prioritizing local news and investigation remains challenging with fewer resources, but they continue to push it as a focus. “We have made it a priority since no other local news source does this type of work. We have one full-time projects reporter, and we also allow beat reporters to step away from their beats for limited amounts of time to do investigative or in-depth reporting. In the past year, two beat reporters each spent four months (spread over an eight-month period) reporting a project on the cost of gun violence and a third beat reporter spent about a month helping them.”

Free speech and opinion writing also remain a priority with the paper taking a unique approach to keep liberal and conservative viewpoints side by side. The Chattanooga Times Free Press has two editorial pages: the liberal Times page and the conservative Free Press page. The separate pages honor the legacies of the two papers that merged 20 years ago to form the current newspaper, and provide readers with viewpoints from different political perspectives. It has one editorial cartoonist on staff. He draws cartoons for the Times page because that page traditionally had a cartoonist. Today Gerber counts 61 full-time staff members, 2 part-time staff members, and 25 freelancers. “The FTE number includes 10 page designer positions since, unlike many newsrooms, we do not use an outside design studio.”

The Times Free Press’ sister paper, the Arkansas Democrat-Gazette, (both are owned by Walter E. Hussman, Jr.) is trying a new revenue model, as recently reported in the Times Free Press: Give every paying subscriber a free iPad to convert to digital so long as they continue to pay their annual subscription of $36/month. As Hussman ends the printed delivery of the Arkansas paper he is investing millions of dollars to convert the newspaper’s print subscribers to digital by the end of 2019.

The Ozarks Independent

Jason Wert, editor and publisher of The Ozarks Independent, launched the locally-owned news site dedicated to providing in-depth coverage of the Ozarks area, in Springfield, Missouri in December 2018. The Ozarks are home to about half a million people along the Springfield/Branson corridor. The newsroom does not cover national or state news unless local elected officials from the area are involved. Wert’s one goal is to provide local residents with information about what’s going on in their community so they can be better informed and “show the good being done in the community and celebrate what makes the Ozarks such a wonderful place to live.” He explicitly states they have no political or social agenda.

A for-profit company with revenue based on online ad sales, the Ozarks Independent keeps overhead for operations low, allowing it to sustain itself as a for-profit business. Wert says it is the only locally owned full-time news outlet in Springfield, Missouri and given that other news outlets cover national and statewide news, it limits the amount of time or space they have for local news. “We jokingly refer to ourselves as the ‘AFLAC of News’ because we supplement the area’s coverage of national and state news with an avalanche of local stories.” The Ozarks Independent is a team of two: Wert and an independent contractor with some regular partnerships in the discussion stages. The news site accepts stories from local journalism students at area universities and high schools for publication as Wert is committed to help student journalists learn and hone the craft. Wert began his journalism career working at his small Pennsylvania hometown’s radio station when he was 16, and understands the power of hands-on learning. “We’re local, local, local,” he says. “The only time we mention a national story is if our local reps are a key part of the story and if it has a direct impact on our region in some way. Same with statewide news. There is more than enough happening in the Ozarks that goes unreported for us to have dozens of stories some days, so we maintain that local-only focus.”

When pressed on other revenue models or collaborations in the works, Wert wrote, “One of our goals is to be able to provide our service to the community based only on advertising revenue, so that local news remains completely free. Pipe dream in 2019? Maybe…but we’re going to give it all we have to do it.”

TheEditorial.com (disclosure: the author founded TheEditorial.com)

In 2012, I set out to build a local digital magazine around emerging ideas and voices along the Harvard and MIT line, decoupling the feature profile on the cover of magazines and newspapers. Without the million-dollar seed funding to hire a team of reporters to cover the city, we had to earn a loyal audience one interview at a time. We published a new interview with an emerging voice around an emerging topic every second Thursday in a push email. We focused on beautifully designed, deep-dive interviews, putting these emerging visionaries and influencers on the record, verbatim. It was, in essence, a print version of an interview podcast. Once we realized this, we also added a podcast version.

TheEditorial had a 35 percent open rate or higher on most interviews. Our readers were loyal, stayed a long time, and showed up at our live events. Interviews varied in traffic based on the social media machine or corporate push behind the person we were interviewing, given we were bootstrapped and dependent on organic growth. Some interviews garnered 20,000 unique hits while others would only reach 3,000. Many of the interviews are evergreen and the dormant site still counts 2,000 unique readers a month.

Revenue came from the live events where tickets sales and local corporate sponsorship showed signs of growth. We used a Philadelphia startup called TicketLeap.com to handle our ticket sales and promotion and Wallit in Milwaukee, Wis. when we experimented with a pay-per-read solution given our product was a highly crafted singular interview. Our strategy was to drive revenue through sponsorship from top-shelf corporates who line the street of Kendall Square, the biotech hub of the world, yet they were only interested in the live events that were time-consuming for a tiny team. The market also had a ceiling for live events in Cambridge, where Harvard and MIT hold countless lectures and events that are often free and open to the public. Our events would sell out, yet at $25 to $50 a pop and a venue that holds 300 people, the revenue was not enough to grow. We modeled that with an infusion of capital we could replicate our “emerging interview around local ideas with global or national appeal” paired with public ticketed events in five cities (growing cities like Charlotte, Austin, Cincinnati, Atlanta, and Phoenix) and then our model showed real revenue that would grow us into a six-figure for-profit. However, we were unable to find an angel investor or venture firm willing to risk investment in journalism. At the same time, the nonprofit model was gaining steam. I share this case study as there are many out there trying to do the same thing and the question is, “How do we harness storytelling, journalism and civic engagement?” I joined the Shorenstein Center with the hopes of trying to solve this with many others researching how to protect an independent press.

Cambridge Day

Sharing the same subway line as TheEditorial.com, Cambridge Day, founded by veteran local news journalist Marc Levy, is focused on city hall versus exporting Cambridge’s world renowned brain trust to the larger world, as TheEditorial has done. Levy, under his business Cambridge Media Systems, posts two stories a week on Cambridge Day, a for-profit, web-only source for news and entertainment about Cambridge and surrounding communities. Over the past few years, Cambridge residents have come to count on Levy for some semblance of local political coverage absent in the local dailies and public stations that focus more on Boston and greater Massachusetts.

Levy reports 225,000 visits a year, averaging 22,000 readers a month. In an email interview he wrote, visitors are invited to participate by commenting on posts (so long as comments are handled responsibly and respectfully) as well as by submitting letters or essays for publication and, in some cases, contributing regularly as a reporter, reviewer, or provider of other content. Levy writes, “Cambridge is in large part politically progressive; embracing of science and reason; and welcoming – and protective – of the diversity of humanity, and Cambridge Day tends to reflect the mores of its community. Its reporting is fact-based, however, with a separate section set aside for the (also fact-based) expression of opinion, and all voices are welcome in its pages.”

The Local For-Profit Newsletter Model

The Skimm is a for-profit prototype in national news, and three major players below appear to be making headway in the local newsletter space following its model.TheSkimm began in 2012, when founders Danielle Weisberg and Carly Zakin left their jobs as producers at NBC to produce the subscription-only newsletter with a pyramid scheme for its evangelists. TheSkimm was the first big brand to own the newsletter space. The local newsletter is gaining speed outside of daily newspapers. Again, with scale the numbers and reach of a specific demographic (millennials, moms, etc.) seems to appeal to venture capitalists. In June 2016, theSkimm raised $8 million in Series B funding to move into video with the launch of Skimm Studios. The round was led by 21st Century Fox and included as early backers RRE Ventures, Homebrew, and Greycroft Partners. In early 2018, theSkimm raised another $12 million in an effort led by Google Ventures, along with Spanx founder Sara Blakely. In October 2018, theSkimm announced that it had over 7 million subscribers. The newsletter also has political power. In the 2016 presidential election, theSkimm interviewed 12 of the major candidates running in the primaries and reported that it registered 110,000 people to vote.

Charlotte Agenda

Charlotte Agenda was one of the earliest innovators in the local newsletter space. It arrived on the scene early in 2015 as a successful local newsletter and a model to many. Founders Katie Levans and Ted Williams made it their goal to make Charlotte smarter and better connected. It is owner-operated and the founding team seeded the company with $50,000, building relationships with readers and advertisers that led to increased results each quarter. With its success in becoming profitable, they expanded to Raleigh, only to shutter the second location a few months later and then be forced to lay off staff in 2016. Experimenting is part of the startup culture. By the end of 2017 Charlotte Agenda was reporting $1 million in revenue.

Today, it is fully immersed in all things Charlotte with a focused list of products for young millennial locals who care about supporting local brands and local news. As listed on its website:

  • The Agenda Daily Newsletter (41,000 subscribers, 40%+ open rate)
  • CharlotteAgenda.com (450k unique views a month, 1.5 million page views a month)
  • Agenda Instagram (136,000 followers)
  • Annual City Guide (100,000 blended circulation)

WhereBy.Us

WhereBy.Us is an emerging player in the for-profit local news space that deserves attention because a number of its local news affiliates already have substantial momentum. Focused on producing newsletters for five American cities, WhereBy.Us sends each city’s newsletter five days a week with a 30 percent open rate, according to an email interview with Chris Adamo, chief business officer. The five local newsletters include: The New Tropic in Miami, The Evergrey in Seattle, The Incline in Pittsburgh, Pulptown in Orlando and Bridgeliner in Portland. Each of these five local for-profits shares resources and templates across the WhereBy.Us brand. Each city’s specific publication has on average a team of four to five local team members, with a lot of shared centralized staff across tech, marketing, sales, creative, and events. This is a unique model in the local news landscape. It is also one of the first for-profits accepting foundation grants that we have seen.

Adamo further explained its revenue model by email, “We are a for profit, as are all five of our publications, and they all follow the same channels for sustainable revenue, plus revenue channels like event creation/ ticket sales, sponsored/ supported journalism products, product sales and creative consulting.” He also defined the use of foundation support: “We do work with many foundations on grant programs as well as partner with nonprofits on projects, as we are allowed to take grants as a for profit when the work is civic focused.” He went on to explain that when a project is civic-focused, the grant money is earmarked to cover only the costs of  the project’s content and events (salaries, production, marketing, tools etc.)

Newsletter subscriptions to date, according to Adamo, are growing:

This revenue model of creative services adjacent to the newsroom looks very similar to those of the Richland Source and the Flint Beat. The emerging hybrid is certainly interesting to many in the industry, especially when we consider for-profits accepting foundation support for civic news.

While he would not share revenue numbers, Adamo did reveal that his company crossed $1 million last year in gross revenue. WhereBy.Us is in the midst of a funding round to expand the platform to new cities. Its funders include Jason CalacanisThe Knight FoundationMcClatchy (parent of the Miami Herald/Seattle Times), Krillion Ventures (Jeff Miller and Melissa Krinzman), Quixotic Ventures (Mark Kingdon), Seed Invest, the Miami AngelsLouis Wolfson, and many other mission-aligned angel investors.

Past partners who have publicly funded civic storytelling projects in their five cities include such top-shelf names as Miami Dade College, Lyft, Bank of America, Frost Museum, Vulcan, Pinnacle Housing, Gates Foundation, FDOT, the city of Orlando, the Miami Dolphins, Glossier, WeWork, Lime Bikes, Biketown, the Ford driverless cars division, Portland State University, and the University of Oregon.

The New Tropic, Miami (WhereBy.Us)

The New Tropic is a local for-profit news site that was able to accept foundation grants and donations, as well as partner with nonprofits on civic-focused projects. The New Tropic Miami was the original tenant inside the WhereBy.Us infrastructure. In fact, The New Tropic founder Chris Sopher is also the founder of WhereBy.Us. Sopher was originally housed inside the Knight Foundation in Miami and both projects are funded by the foundation, which is known for its experimental hand in the current journalism landscape. This membership based startup plays heavily on its newsletter and membership perks. For $10 a month or $120 a year, members are rewarded for their patronage with discounted tickets to The New Tropic live events, tasting menus at local restaurants, special giveaway contests to win symphony tickets, and a welcome kit. Today The New Tropic has 39,000 subscribers to its daily newsletter.

The Incline, Pittsburgh (WhereBy.Us)

WhereBy.Us has also acquired The Incline, an award-winning media site in Pittsburgh, from Spirited Media. The Incline is well known for its morning email that tells Pittsburgh residents all they need to know about their city’s news and culture. In the merger announcement, the editors said they were excited about the new ownership given they would have better mobile interface, a redesign, and an opportunity for events. Today The Incline has 13,000 subscribers to its daily newsletter.

In an email to subscribers, The Incline editorial staff wrote, “The Incline will still be Incline-y. We’ve still got our sass and Pittsburghese. We’ll keep monitoring the city, highlighting bright spots and challenges. We’ll continue to answer your questions in our Peculiar Pittsburgh series and we’re doubling down on serving as a guidebook to your town — think neighborhood guides, profiles of community leaders, and even more awesome events.”

6AM

Another hipster local news brand that is making some headway across the Southeast is 6AM. Spanning from Lakeland, Florida to Asheville, North Carolina, 6AM is a network of six sites structured around daily newsletters and Instagram Stories. The Nieman Lab reported on the spin-off from legacy print company, Community Journals Publishing Group, chronicling how this small chain of business journals and magazines based in Greenville, South Carolina was seizing the millennial audience. Christine Schmidt entertainingly headlined her Nieman story “Can this network of lit-to-be-local newsletters unlock younger civic engagement?” Ryan Johnston, 6AM’s managing director and former executive vice president of Community Journals, called 6AM “a local, social and vocal brand” and reported being profitable through ads and local business partnerships. He also told Schmidt that 6AM would not be experimenting with paid membership. Schmidt reported that in late 2018, 6AM had over 150,000 email subscribers across the six sites and a 25 percent open rate, which is a hair more than those of WhereBy.Us affiliates at this time.

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