TBD: Hunting for a new business model for regional news

TBD.com 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.

TBD.com 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.