The dis-economies of scale for small town newspapers (and the rise of local indie players)

This post originally appeared on The Media Briefing. It was announced on 16 June, 2017, that The Media Briefing would be shutting down after the purchase of its parent’s company media events business, which did not include the content side of the business.  I wish the excellent staff there the best. If you’re in the UK looking for some great journalists, editors and analysts, let me know. 

In the last 15 years, more than half of the jobs at newspapers have disappeared, down from 412,000 to 174,000, according to the Bureau of Labor Statistics. While I don’t want to reflexively equate newspapers with local journalism, there is no way to ignore such a tremendous loss in local media capacity, especially in small towns and cities.

Three years ago, the Sheboygan Press, where I was Executive Editor,had three full-time reporters, two sports reporters, a photographer, a local news editor, a night editor and a digital editor to cover a city of 50,000. We shared an opinion editor, a features editor and a sports editor with one other site, and they were player-managers who helped provide local reporting and content. Now locally, there is only a news editor, two reporters and a photographer. That’s it. That’s the decline in only three years. Yes, there are shared resources across an 11-newspaper group, but it is rare for those staff to provide truly local coverage.

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Major metros, second- and even some third-tier cities often have three or four TV stations to provide local coverage, but thousands of smaller communities and millions of Americans have lost local news coverage, sometimes entirely. The Columbia Journalism Review focused on these local journalism losses this month and said cuts and newspaper closures are creating “news deserts”.

This crisis is just starting to get the attention that it deserves, but a lot of the conversation is still focused on major metros or cities with more than 100,000 people. Yet in thousands of smaller communities, the crisis looks very different, and the strategies and the business models needed to save these local news sources are very different. The industry is consolidating, but large newspaper groups are treating all markets as if they are the same. Instead of saving papers like the ones I used to manage, the chains’ strategies are creating dis-economies of scale that threaten to wipe out small community newspapers.

Strategies that don’t scale down

In its coverage of the local journalism crisis, CJR called Gannett the “last great local hope”. I disagree. Large groups like Gannett are now running regional strategies that don’t deliver dramatic cost savings at smaller sites and damage their ability to deliver truly local content. Indeed, strategies designed for the metros caught us coming and going: the cost efficiencies didn’t really amount to much for us, while the ad strategies often priced us out of the local market. So any savings were quickly offset by declines in revenue because we had fewer sales staff selling less ad space, and new digital strategies didn’t scale down to our communities.

For example, Gannett, like many other publishers, has centralised newspaper design in a handful of centres. Gatehouse has taken the model to the an extreme with a single centralised design centre for all of its 125 daily newspapers and hundreds of “community newspapers”.Gatehouse newspapers big front page illustration


While I appreciate the need to make the print production process as efficient as possible, this kind of streamlining has to be done only when it makes sense, especially economic sense.


Our contribution to the design studio budget would have hired two designers locally so not only were our cost savings minimal to non-existent, a lack of local market knowledge sometimes led to poor design decisions. For example, the designer usually used huge front page illustrations, like this one from a Gatehouse newspaper but our readers interpreted to mean that we didn’t have content to fill the page. It sent entirely the wrong message.

Ad strategies that didn’t work for smaller sites

Gannett’s centralised digital marketing services didn’t work for smaller sites either. The floor to engage the service was a $5000 monthly spend and, in smaller markets like mine, that was the annual spend for a lot of our advertisers. Fortunately, I worked with amazing local commercial staff and managers, and we came up with our own digital ad solutions.

Research by the Center for Cooperative Media at Montclair State University in New Jersey found a decline in ad blocks of 34 to 40 percent across the four newspapers they reviewed in that state after they were acquired by Gannett. The researchers said:

“This could indicate a variety of things; there could be fewer resources committed to garnering ads from local businesses, local businesses may have decided to pull their advertising for some reason, or it could be some kind of strategic decision on the company’s part.”

Needless to say, fewer ads means less revenue. Less revenue has meant a download spiral that Gannett is struggling to check.

‘Wistful self-delusion’

Gannett says that it is a “local-to-national network”. While that acknowledges the nationalisation of vast parts of the US ad network, it actually doesn’t make either economic sense or often journalistic sense for small-town news services unless they are little more than one reporter bureaux that feed a regional product. With two reporters left in the sites that I used to manage, in reality they aren’t far from this. Once they are reduced to bureaux, Gannett’s 50 or so small sites will have ceased to be local in a way that my communities define it.

The upside is that Gannett now has retreated from these small towns to such an extent that local competitors are rising to take their place. Sadly for the staff still at those sites, this is putting additional pressure on small Gannett properties.

There is no silver bullet solution to the crisis in local journalism, but as for hope, I don’t look to the large chains in the US. Their consolidation and cost-cutting strategies have run their course.

Rather, I look to local journalism entrepreneurs to create a range of truly local experiments that explore new ways to serve their communities and new ways to generate revenue. I think for local journalism, the days of mass print are over. We are returning to a much more distributed model as we enter the local digital era.

Journalism innovation for small towns and rural areas

As I sit in Vilnius Lithuania, the next to last stop on my 2011 journalism world tour, I was taken back to where my journalism career started: Hays Kansas I started my career as the regional reporter at a small town, 14,000 circulation newspaper, the Hays Daily News. The standard joke told by the locals was: It’s not the middle of no where but you can see it from here. My job was to cover 1100 square miles on northwest Kansas. I covered my first presidential election from Hays as local hero done good, Bob Dole, ran against Bill Clinton in 1996. Dole’s hometown of Russell Kansas was also the birthplace of another Republican candidate that year, Pennsylvania senator Arlen Specter, who also ran the nomination that year. Apart from that, I covered what most cub reporters at local newspapers do: School board meetings, the weather (think storm chasing in Tornado Alley), the odd agriculture story and a beloved Sunday feature called the Nor’wester.

It was a great place to start journalism, working with a curmudgeonly good hearted editor, Mike Corn, and an award winning team of photographers, Steve Hausler and Charlie Riedel. Charlie now travels the world for the Associated Press. It’s still the second greatest job I’ve ever had, second only to working for the BBC in Washington. My job meant something. Western Kansas was a place fighting off decline in the 1990s. It was still reeling from the farm crisis, and as its youth left because they had to find work and their way elsewhere, many of its small towns fought off extinction. When I first moved there, Mike used to quiz me on where these small towns were. Every once in a while with a glimmer in his eye, he would say: “Ha, got ya! Trick question. It’s a ghost town!” For these small towns, I was all they had when it came to news, and they thanked me for it. It was deeply satisfying work.

Hays was also a great place to start because when I worked there, it was very innovative for a small newspaper. I started in December 1994, and we all had Macs on our desks and a cutting edge production system. For a newspaper of that size, I’m pretty sure that was rare then. The paper went online in 1996, and I applied to become their first internet editor. It was definitely ahead of its time.

Hays is why I’ve always been interested in local news, now mostly talked about as hyperlocal. What took me back to Hays? The Colombia Journalism Review has an interesting collection of views about Modesto California and journalism. It’s a world away from Hays and ten times as large, but for Hays and a lot of even smaller communities, the issues of providing journalism to these places is even more challenging than when I was there, especially in my adopted home of England, where the crisis in local journalism is even more acute. Although I cringe a bit when I read the CJR piece and detect a whiff of big city condescension (I’ll always be a country boy), their larger point is right:

If the digital-news revolution is to truly serve a mass audience, beyond educated and reasonably affluent urbanites, we must account for Modesto; we must find ways for innovation to flourish in poor towns where, for so long, it has been allowed to die.

I guess broadly, it’s not just the dying of journalism in not just poor towns, but also small communities, that worries me but the existential threat to rural areas full stop both in the US and the UK. That’s another issue, but if you’re interested in local journalism, it’s well worth a read. I especially love Rusty Coats’ piece. I met Rusty in 2005 at Web+10 at Poynter, and his story and mine share a lot of similarities. I love this line:

Fledgling news websites have cropped up across the country, led by journalists who bleed local, sometimes down to the neighborhood.

Local journalism survives on the dedication of these journalists, like Mike Corn. When I pulled up the Hays Daily News website tonight, there was Mike’s name. He’s still in Hays. He has threatened to leave several times since I left in 1996, but he’s still there. You have to have that kind of dedication because it sure as hell doesn’t pay that well. I made $2000 less than a first year teacher when I started in Hays. I made ends meet by having no student debt and living very frugally. I drove a very used car that had no working air conditioning, something you miss when it’s 45 C (114 F) on a hot, dusty summer day in Kansas.

Sceptical optimism

Local news and information has always been a tough business, and the ongoing economic crises aren’t making that any easier. It is good to see a renewed vigour when it comes to local. John Paton, dubbed newspapers’ digital apostle by the New York Times this week, is pulling the industry forward, and his digital first strategy has been a clarion call to his editors and journalists, many who work at small newspapers. Steve Yelvington has long been a leader in digitally-led local journalism, and as Morris, the group he works for, moves digital close to its core, I’m sure we’ll see great things. I’m sure we’ll see new efforts in how communities cover themselves. For those of you working with such projects, it’s well worth reading the New Voices: What works report.

I continue to be sceptically optimistic about local journalism, more because I choose to be optimistic about small communities. Although I haven’t done truly local journalism for a long time, I remember all too well how hard it is and the dedication required. I remain slightly sceptical because I think a lot of the hype surrounding hyperlocal has needed tempering for a very long time, and I see a lot of hyperlocal projects make the same mistakes over and over and over again. Local journalism needs more of a rethink than national or international when it comes to remaking the business model. Thanks to CJR for trying to move this conversation a bit more front and centre.

TBD: Hunting for a new business model for regional news team speaking at ONA10
From right to left, Steve Buttry, Erik Wemple and Jim Brady of TBD at the recent Online News Association Conference in Washington

One of the areas that I’ve been watching closely has been the effort to rebuild the business model to support local and regional and regional journalism, and this week I wrote a brief profile for the Media Guardian of a new regional website in the US, TBD. I wanted to go into a little more depth about the business model and also answer some questions from Twitter.

While there has been a lot of hand-wringing about a decline in investigative journalism, local and regional journalism has suffered even more during the recession than high-end investigations*. Local and regional has really been hollowed out in the US and the UK. Circulation declines and an over-reliance on advertising revenue has led to massive job losses in local and regional press. According to an OECD report:

The regional and local press are particularly affected and 2009 is the worst year for OECD newspapers, with the largest declines in the United States, the United Kingdom, Greece, Italy, Canada, and Spain

The OECD also found: “Employment losses in the newspaper industry have intensified since 2008 particularly in countries such as the United States, the United Kingdom, the Netherlands and Spain.” Erica Smith, who runs the site Paper Cuts, counted 15,992 job losses in 2008, 14,783 in 2009 and 2761 job cuts in 2010 in the US newspaper industry. 166 newspapers have closed their doors. In the UK, Francois Nel of the University of Central Lancashire did a study of journalism job losses in the UK this past summer. Hedging a bit, Francois “guesstimates” that since 2001, the UK journalism corps has shrunk between a quarter and a third.

In Washington where TBD launched in August,  the iconic Washington Post, the newspaper that broke the Watergate scandal, saw its circulation fall 6.4%, according to the latest figures.

While there has been no shortage of attempts to build a new local news business model, there have been more failures than successes: Backfence, Bayosphere, Sidewalk and others.

TBD, a Washington metro area web and TV news service launched by Robert Allbritton’s Allbritton Communications in August, is the latest to try to create a new model for local news. Industry watchers are keeping a close eye on it. Allbritton has already found success where others saw no opportunity in launching Politico, and now I wonder if he can create a new local news business model.

The editorial strategy

Unlike Politico, TBD is not a pure start-up and a hybrid operation on many levels. It is joined to two established TV stations, a 24-hour local news channel formerly called News Channel 8 but now re-branded TBD TV, and another traditional local TV station, WJLA. has taken to heart Jeff Jarvis’ advice to “Do what you do best and aggregate the rest”. Its editorial strategy is focused on aggregating existing content while searching for new opportunities in covering traditional subjects including entertainment, traffic, weather, sport and local politics. It has a staff of 12 to 13 reporters and bloggers, supplemented by the news staff at the TV stations.

“We tried to focus on things other people weren’t doing,” said Steve Buttry, director of community engagement for the site. For instance, they view local political coverage as essential, Buttry said, but “rather than covering the horse race of the day-to-day campaign, Kevin Robillard, our [politics] reporter is fact-checking.”

Much has been made of hyperlocal strategies with content delivered at a postcode level, but the management of TBD describes it as a regional site with hyperlocal elements. Buttry has 190 bloggers across the area who provide hyperlocal content, and a team of four community hosts that highlight the best posts from the blog network and are also responsible for community outreach.

The commercial strategy

The real challenge for local journalism is to rebuild or create a sustainable business model.

“When people say there’s no money in local, I just don’t buy that,” said Jim Brady, general manager of TBD. He recognises, however, that a new local news business model needs multiple revenue streams. “There are no silver bullets,” he says. “Only shrapnel.”

TBD has one advantage that most start-ups only dream of: an ad sales team of 22 with contacts and contracts with major advertisers in the region. When the story was published on the Guardian, Jonathan Lloyd made this comment on Twitter:

“TBD has one advantage that most startups only dream of: an ad sales team of 22” < woah, that's one hefty payroll though @kevglobal #salesless than a minute ago via web

He has his own hyperlocal start-up, King’s Road, in London. To clarify from the piece in The Guardian, TBD the website doesn’t have to support that sales staff on its own. Will the TV-web sales team succeed in selling digital as well as they succeed in selling broadcast? Time will tell, but it is a competitive advantage over other hyperlocal start-ups who have to start from scratch. 

TBD also has a commercial relationship with about a third of its bloggers, something that Brady sees as a competitive advantage, giving advertisers additional reach.

The site adds location information to all of its content, including network blog posts, so that people can find content related to where they work, live or play. This could open the door to future geo-targeted ads as the site develops.

Buttry is bullish on local, mobile advertising, and based on the expertise they are developing in building mobile applications, TBD might also launch a business to develop mobile apps for its advertisers and others.

Growing pains

As I was writing the feature, TBD had a management shake-up. Less than three months after its launch Roger Allbritton announced that Brady was stepping down as general manager of TBD due to “some stylistic differences”. Editor Erik Wemple is stepping in to take his place.

Reports said that Allbritton wanted someone with more of a focus on original content instead of Brady’s expertise with technology and aggregation.

Staci D Kramer, editor of paidContent, dismissed this characterisation of Brady: “The idea that Jim Brady is too much tech and not enough content doesn’t match anything I’ve known about him over years of coverage.”

Comments from Brady reported by Steve Myers at the Poynter Institute indicate possible friction between the website and the TV stations. When asked if Allbritton could succeed digitally, Brady was quoted as saying: “TBD is digitally forward enough … Time will tell in terms of the rest of the organization.”

TBD is not alone in having friction between digital and legacy operations, whether that is print or broadcast. In fact, I don’t know of a single organisation that hasn’t had some pretty major issues with integration or cooperation. Whether this be a minor bump or the signs of bigger issues down the road, I guess that is TBD.

* Footnote At the risk of sounding like a heretic, I believe some of the focus on investigations in terms of saving journalism is misplaced. Trying to save journalism by focusing on investigations is like trying to save the auto industry by saving Porsche. The point where the analogy falls down is that Porsche is the most profitable car company in the world, and one could argue that investigations have always been subsidised by general interest journalism such as sport and other revenue streams. It’s difficult to make a business built on investigations. Accountability journalism is important, but let’s be honest, investigations have always been an expensive and relatively small part of what we do. I think there has also been a conflation of investigations and the broader category of original content and original reporting.


Two projects to watch: Ben Franklin Project and's Near You zip code news filter's Near You zip code-based news filter

At 428 am in Washington DC a new news site,, launched, and it is definitely one worth watching. Why? They have assembled an all-star staff, brimming with passion. The general manager for the project is Jim Brady, the former executive editor and vice president of Washington Post Newsweek interactive. Steve Buttry, the site’s head of community engagement, has a long history in traditional journalism, training and innovation.  (For any journalist struggling to come to terms with the unrequited love you feel for the business, read this post by Mimi Johnson, Steve’s wife, as he left the newspaper business to go all digital at TBD.) They have some great staff who I have ‘met’ via Twitter including networked journalists Daniel Victor and Jeff Sonderman.

When he was hired, Jeff described his job as a community host as this:

developing ways to work with bloggers and users to generate, share and discuss content.

He described as this:

Our goal is to build an online news site for the DC metro area, and do it taking full advantage of the how the web works — with partnership not competition, users not readers, conversation not dictation, linking not duplicating.

If you look on Twitter this morning, Jeff and Steve are very busy on their first full day as hosts for the new news service.

Digitally native at launch

The site is clean and clear, easy to navigate with a lot of excellent touches. launched with an Android app and are awaiting approval for their iPhone application. They zip (post) code news filter to find out content not only from TBD but also from bloggers in the area is excellent. I lived in Washington from 1998 until 2005 as the Washington correspondent of I know the city well. I typed in my old home zip code, 20010, and got news about Mount Pleasant including from a blog called The 42 Bus, which was the bus that I used to take to work everyday. Their live traffic information is template for how city sites should add value for such bread and butter news. You can quickly pull up a map showing traffic choke points in the area. They even have a tool to plot your best travel route. The traffic tools are pulled from existing services, but the value is in the package.

They had a launch event last week, and they explained their networked journalism strategy. Steve Myers at the Poynter journalism institute said half of the links at would point to external sources, much higher than at most sites. said that At launch, 127 local bloggers had joined their network. Steve Myers had this quote from Steve Buttry about their linking strategy:

“If we’re competing on the same story, we’ll do our story and we’ll link to yours,” said Steve Buttry, director of community engagement for the site. If another source owns a big story, “we’ll play you at the top of the home page and we’ll cover something else with our staff resources.”

Wow. Personally, I think that this is smart. With resources declining at most news organisations, they have to be much more strategic about how they use their staff. They need to focus on what value that they add. Jeff Jarvis says: “Cover what you do best and link to the rest“, and this is one of the highest profile tests of that strategy.

Ken Doctor, brilliant news industry analyst at Newsonomics, has 10 reasons to watch Harvard’s Nieman Lab for journalism has another six reasons why they are watching the launch. Of Ken’s list, I’ll highlight two. Bucking the trend for many new high-profile news projects in the US, this is a for-profit business. Ken’s seventh point is huge:

7) It’s got a big established sales force to get it going. Both TV stations salespeople with accounts — and relationships. So TBD is an extension of that sales activity, not a start-up ad sell, which bedevils many other  start-ups.

The other thing that has going for it is that it has the commitment of someone who already has seen some success with new models, Robert Allbritton. A few years ago, he launched, bringing in two high profile veterans from the Washington Post to compete not only with their newspaper but also specialist political outlets like Roll Call. Politico has managed to create a successful print-web product, “not profitable every quarter but says it’s turning a profit for any given six months,” Allbritton told What is more important though is his commitment to his ventures. He’s got the money and commitment to support projects past the short term.

“The first year of Politico was pretty ugly in terms of revenue,” he admitted. “You’ve got to have some staying power for these things to work.”

The Ben Franklin Project

The other project that I’m watching is John Paton’s Ben Franklin Project at the Journal Register Company. What is it?

The Journal Register Company’s Ben Franklin Project is an opportunity to re-imagine the newsgathering process with the focus on Digital First and Print Last. Using only free tools found on the Internet, the project will – from assigning to editing- create, publish and distribute news content on both the web and in print.

Succinctly, this company is looking to disrupt its own business. Instead of attacking costs by cutting more staff, they are looking to cut costs by eliminating the price of their own production using free tools. It’s not something that every organisation could do, but with 18 daily newspapers and 150 non-daily local publications, it shows the ambition of their project. This is not a tiny organisation.

In practice, the organisation set the goal for all 18 of its newspapers to publish online and in print using free online and free open-source tools, such as the Scribus desktop publishing application. They are also pursuing the same kind of community engagement, networked journalism strategy that is at the heart of

On 4 July, 2010, Independence Day in the US, they published their 18 daily newspapers and websites only using free tools and crowdsourced journalism. Jon Cooper, Vice President of Content, Journal Register Company wrote:

Today — July 4, 2010 — marks not only Journal Register Company’s independence from the costly proprietary systems that have long restricted newspapers and news companies alike. Today also marks the start of a revolution. Today marks the beginning of a new path for media companies whose employees are willing to shape their own future.

This is just part of Paton’s turnaround strategy for the Journal Register Company. However, in 2010, which is proving to be another tough year for the US economy (especially in some of the areas the company covers), Paton just announced that the company is 15% ahead of its revenue goals. He said:

Our goal is to pay out an extra week’s pay this year to all employees for hitting our annual target of $40 Million.

That is an amazing investment in journalists and an incentive for them to embrace the disruptive change he is advocating, but it’s so heartening to see journalists engaged and benefitting from change in the industry.

With all the talk about innovation in journalism, it is rare to see projects launch with such clear ambitions. After a lot of talk in the industry, we’ll now see what is possible.

Landrush for local: NowPublic, Everyblock and now

A common joke amongst journalists is that all we need is two examples to proclaim it a trend, but we’ve got much more than that when it comes to rush to build local media empires in the US. In June, AOL bought two local services, Patch, which provides news to small towns and communities, and also Going, which provides a local events listing platform. bought Adrian Holovaty’s hyperlocal aggregator Everyblock in August. In September, local news network owned by billionaire Philip Anschutz‘s Clarity Media Group bought citizen journalism site NowPublic. Now, we have another major move in hyperlocal with CNN and others investing $7m in aggregator CNN will not only invest in the site, but it will also feature feeds from founder Steven Berlin Johnson called the investment and content deal:

a vote of confidence in the platform we’ve built at, but perhaps more important it’s an endorsement of hyperlocal and the ecosystem model of news that many of us have been championing for years now.

Fred Wilson, a venture capitalist and the principal of Union Square Ventures, is an investor in, and he makes the passionate case for people covering their own communities.

My unwavering belief is that we will cover ourselves when it comes to local news. We are at the PTA meetings, the little league games, and the rallies to save our local institutions, so who better to cover them than us? This is what hyperlocal blogging is all about and it is slowly but surely it is gaining steam.

CNN’s partnership with can be seen as a simple response to a competitor, but with all of the deals in this space, I guarantee that 2010 will see additional deals and development. Add to this location based services and mobile, and you’ve got somethig very interesting happening.

The promise of ‘pro-am’

As Fred says, people will cover their own communities, and we have seen some interesting hyperlocal projects including the pro-am projects of MyMissourian in Columbia Missouri and BlufftonToday in South Carolina or hyperlocal projects here in London like William Perrin’s Talk About Local. I personally like pro-am models where professional journalists cover the official life of the community – council meetings, crime, sports, schools and other local issues – while the site provides a platform for the community to cover itself and the full range of lived experience there. As Clyde Bentley, who set up MyMissourian, found out, readers didn’t want to write about politics as much as they wanted to write about religion, pets and the weather. Here are the lessons he learned from MyMissourian:

  • Use citizen journalism to supplement not replace.
  • UGC isn’t free.
  • Online attracts the eager, but print serves the masses.
  • Give people what they want, when they want it and how they want it.
  • Get rid of preconceptions of what journalism is.
  • Every day people are better ‘journalists’ than you think.

Lessons learned from failure and success

Despite all of this energy and experience, hyperlocal has still seen more high profile failures than successes such as Backfence and the Loudoun Extra project by the Washington Post. Even in those failures, there are lessons to be learned. Mark Potts who was behind Backfence said that one frequent mistake of hyperlocal projects is that they aren’t local enough.

He believes the key is to focus on a community of around 50,000 people. Covering a bigger area makes it harder to keep people interested. “You care less the farther it gets from home.”

The difficulty for Loudoun Extra was integration with and a lack of community outreach, according to Rob Curley who headed up the project.

That doesn’t mean that we don’t have success stories, but again, the secret to success seems to be a laser light focus on niche topics and keeping the hyper in hyperlocal. Crain’s New York just profiled Manhattan Media, which has seen revenue grow fivefold since 2005 and even more surprising is that ad revenue has continued to grow in the midst of the Great Recession. It’s a multi-platform, multi-revenue stream model with newspapers and websites, and their events business now contributes 20% of their revenue.

The lessons I take away is that newspapers trying to be all things to all people with no sense of place or focus are suffering mightily during the recession. Focus is key both in terms of topic and geography, and seeing as this is about engaging not only a virtual but very real world community, I’ll add my basic advice about blogging and social media: Be passionate and be real.

Whether we see a strong recovery in 2010 or not, local will be one growth area, and journalists looking for new opportunities should watch this space for ‘help wanted’ signs.