Sprouts from the ashes

Our house was already on fire; COVID threw gunpowder on the flames. In this piece for Tortoise, I surveyed the damage to our field. Now I will look at some hopeful sprouts rising from the ashes.

First, to be clear: There is no messiah that will save us overnight; our messiahs have all been false. We will not — and should not — return to journalism as it was; we must not lose this opportunity to rethink what journalism can be. Though I want to give them the benefit of hope, I fear the innovation required will not often come from incumbents as they are overwhelmed trying to save the business that was; but I still wish they’d try. The new journalism will not arrive big and fully birthed; it will grow from many small seedlings, many experiments, thus many failures. Patience is required.

Here I’d like to report on conversations I’ve had with three local examples I’m impressed with: Canada’s Village Media, Innocode’s transparency app, and a German paper’s experiment with delivery for stores.

Talk with Google’s senior VP for news, Richard Gingras, about local news (as I will be on June 10) and he will tell you that Jeff Elgie has the answer. I agree. He has a very good answer.

Elgie’s Village Media has the model of simple local reporting for three dozen towns of 50,000 to 150,000, some of its outlets owned by the Sault St. Marie-based company, some franchised to partners (including a few experiments underwritten by Google with McClatchy in Youngstown, Ohio, and with Archant in the UK). In Elgie’s model, the ideal town is a bit isolated, the kind of place where people are born, live, and work without commuting to the big city. Village Media isn’t perfect for tiny, uh, villages (though it has a town of 10,000 as a satellite to a neighboring market) or suburbs or big cities, at least not yet. Elgie says in his best markets residents have a local news habit; it’s easier to start a Village Media site in a town with competition or in which the paper just died, rather in one that has been a news desert.

Village Media sites provide just the value you’d expect from a local newspaper a few decades ago: town council doings, schools, crime, new businesses; it’s comforting in its familiarity. Each site has a handful of reporters covering what matters and Elgie firmly believes they should not waste time rewriting press releases; their sites post them, properly labeled. Village media provides the model and the technology.

Village Media sites are supported by — get ready for it — local advertising. It has not died. Elgie has creative offerings for local merchants beyond standard ad units, video, and sponsored content. There is directory advertising that is self-published by the local merchants, and “sponsored journalism.” That’s not as fearsome as it sounds. It’s underwriting as engaged in by public-radio stations: A sponsor is able to take credit for making it possible to offer coverage of, say, volunteerism or high-school sports or local arts. Village Media also has some programmatic advertising and — like McClatchy, Advance, and Stat — has instituted voluntary payment (read: contributions) in this crisis.

Now hold onto your hat: Even in the COVID crisis, Village Media’s revenue is *up* this April over last by more than a third, not counting growth in franchise fees.

Yes, Village Media sites lost advertisers in the shutdown. But it worked hard (like the German site I’ll mention below) to help them get customers. A major auto dealer that was ready to cancel has ended up spending more. Cities are advertising.

There are other, similar models out there. Patch in the U.S. spread like kudzu into 900 towns, blew up, and rose again from its own ashes, smaller. My area in New Jersey has TAPinto sites as well as independent blogs. In Geeks Bearing Gifts I extolled the hyperlocal blog as a building block of a new news ecosystem and then I confessed my over-enthusiasm, though there are still lots of great single-proprietor blogs serving towns. Every commentator about local news — and there are more commentators about it than reporters in it these days — is quick to complain that any model I propose doesn’t scale. Well, nothing will scale in an instant; that was Patch’s problem: thinking it could. Local is going to be spotty. For Village Media, the challenge is identifying and training the perfect local publishers; as a school, I’m drawn to help.

I’ve long taught our entrepreneurial students the C-A-R rule of media businesses: They must first build a critical mass of content before they can attract a critical mass of audience before they can get a critical mass of revenue. This meansan enterprise of the size of Village Media’s requires a low six-figure investment to get to break-even. Given that the model is proven and the revenue and margins are enviable, I see no reason that capital cannot be raised as loans to build new outlets all over the map. Think of it as a burger franchise and it makes financial sense.

What about tiny burgs that don’t fit the Village Media model? On my last trip outside New York, I got to sit down with Richard Anderson, the founder of Village Soup (no relation) in Maine and a great pioneer in online local journalism. He had thriving local digital sites and then unfortunately bought the local newspapers just before the crash and ended up selling the business. But he remains an innovator, working on how to serve towns’ needs for local government transparency and accountability without wasting time and resources on distractions. Anderson is working on an exciting idea I’ll tell you about another day, when he’s ready.

Anderson and I are inspired by a 2018 paper by Pengjie Gao, et al, that contends: “Following a newspaper closure, we find municipal borrowing costs increase by 5 to 11 basis points in the long run…. The loss of monitoring that results from newspaper closures is associated with increased government inefficiencies.” That is, transparency is good for local towns, schools, businesses, and taxpayers. In my state we have something called Sustainable Jersey, which certifies towns on a number of criteria — including public information and engagement — and they compete to improve.

This inspired another thought: call it transparency-as-a-service. What if transparency services offered a start — just a start — on the way to a healthier local information ecosystem? What if that could be a business? What if the client is the town? Is that a conflict of interest? Sure. So is advertising. Bear in mind that Benjamin Franklin was not only the publisher of a newspaper in Philadelphia but also the official printer of Pennsylvania and the postmaster at the same time. If Ben could manage it, we can.

I was sharing this thought with a Scandinavian media executive I respect and he told me I had to talk with Morten Holst of Innocode, which provides technology for many media companies. I mentioned my thoughts on transparency-as-a-service to Holst and he showed me the Sandefjord Citizen app they’ve already built. The client is the local government. The users are a third of the population of the town. The product is local data. With the app, users can sign up for alerts when building permits are filed (the town would rather people raise objections before v. after it is issued), get data on water temperature and snow plowing (it’s Norway), and send out messages on behalf of their local clubs and organizations.

No one would say such data transparency is sufficient to assure local government accountability. Journalism is needed atop this data. The Citizen app is just one piece of an impressive, larger local strategy Innocode has. In any case, why waste journalists’ time rewriting press releases about snow plowing? Why not, too, follow the lead of Chicago’s City Bureau and make citizens collaborators in covering meetings and gathering data? The journalists should devote their time to true accountability journalism, not just filling space. The more informed and engaged citizens are in their local government, the better for journalism, the better for the town.

My point here is that we need to cut journalism up into component parts so we can start smaller. As I said in this post, one of my students argued that when faced with building from ground up, one must choose whether to build transparency or service journalism and I would add community. You want to end up with all three, but you need to start somewhere. The Citizen app is an example.

Finally a note on local business and community. This headline in Germany’s Die Zeit struck me:

Translated: “The newspaper now brings beer. Many local papers are fighting to survive. But in the middle of the pandemic, the Mindener Tageblatt had an idea.”

I emailed the publisher, Carsten Lohmann, to learn more. What impressed me is that he empathized with the needs of his local advertisers and their customers and brought to bear what he could: his own newspaper delivery staff. The company had already decided to take a cost center — delivery — and turn it into a revenue stream. Then came COVID. Lohmann told me:

They have been delivering beer (it’s Germany), plus about 80 pair of shoes so far, and office supplies. Will this make him rich? Is it the elusive messiah? Of course not.

This is not the only line extension the paper has developed. In 2003, it founded MR-Biketours and is now the largest provider of guided motorcycle tours to the U.S. By the way, when I told students in our News Innovation and Leadership program at Newmark about the Minden paper, my colleague Anita Zielina said the paper she once worked for in Austria, Der Standard, bought a local bread company and offered daily delivery of papers and rolls. Who wouldn’t want a nice Zimtschnecke with the news?

Many years ago, when I was still consulting, I set up a meeting with eBay and PalPal (they were still together) to investigate whether local newspapers could help local businesses sell online and deliver locally to compete with Amazon. The eBay executive said the problem was that local stores did not generally have inventory digitized, so it could not be presented for sale online. I wrote a business plan for a stores’ equivalent of OpenTable, which had to build a system for restaurants to manage reservations so those reservations could be offered online. It almost got investment and a team but then didn’t. More recently, at the Newmark J-School, we started a professional community of practice for ecommerce with a not-so-hidden agenda to convince and help publishers to open online stores (à la Wirecutter) to build a new revenue stream and a new set of skills around individualized user data. The group convinced one company to do this and it gained a new revenue stream of a few million dollars.

My point is that we need to build new journalistic enterprises, new models, new services, and new revenue in small ways. This is why I like the dialog-driven journalism of Spaceship Media, the collaborative journalism of Chicago’s City Bureau, the answers and advocacy that come from Detroit’s Outlier, the listening inherent in Tortoise’s Thinkins, the power-sharing of The City’s open newsrooms, as well as innovation from the incumbents: Advance’s texting platform Subtext; McClatchy’s and Archants experiments above, and service journalism from the Arizona Daily Star’s This is Tucson. They build a piece at a time.

At Newmark, we just announced that we are also thinking small to train individual, resilient journalists in our new Entrepreneurial Journalism program. It will prepare journalists to serve passionate communities by making email newsletters, videos, events, sites, texting services, books, and more — and to support their work by making money via Medium, YouTube, Patreon, book publishers, events, and so on. My colleague Jeremy Caplan will head the program.

None of these journalists is likely to get venture-capital funding and return 100x. None of them will instantly serve every town in America. None of them will solve all of journalism’s woes overnight. None of them is a messiah. But any of them could serve a town’s transparency needs or bring together a community to share with each other or find creative ways to earn money by serving local merchants. Any of them could rebuild journalism from the ashes as small sprouts. That’s what it’s going to take, when the fire is out.

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