If the latest from David Carr doesn't mark the final nail in the coffin of Patch, it's pretty darn close. Carr quotes AOL CEO Tim Armstrong acknowledging that AOL cannot continue "to go it alone in what has been a futile attempt to guide Patch to profitability."
Exactly what that means for the remaining Patch local news sites is unclear. Carr says Armstrong mentioned forming partnership with other companies but did not give specifics. Absent a partner with deep pockets and a deeper faith in corporatized local on a shoestring, it seems more likely that Patch will be dismantled.
So what went wrong? As a failed experiment, Patch offers plenty of lessons in local news entrepreneurship. Among them:
- Patch scaled very quickly. Armstrong launched Patch in 2007 and sold it to AOL when he became CEO in 2009. In 2010-11, the number of local Patches grew from dozens to hundreds. In August, there were 900 Patches when AOL announced that some 300 unprofitable sites would be shut down and hundreds of employees lost their jobs. It's best to develop a new model on a small scale - experiment, make mistakes and corrections - and then grow with careful attention to organizational efficiencies, which is not the same as lack of investment. By contrast, we are seeing expansions by local, independent publishers but they tend to go slow, adding a site for adjacent territory one or two sites at a time.
- Patch didn't consistently connect with local advertisers. Many Patch sites featured little local advertising and relied heavily on national ads. National advertising may make sense in a national network, but it's hard to see how national dollars will be enough. Meanwhile, many independent publishers believe that taking national advertising undermines their credibility and value to local advertisers.
- Corpororate profit levels may not be attainable. Patch never got to profitability, but even if it had, it might not have been possible to meet investor expectations. The small independents tend to have more modest expectations - make a decent living, re-invest in the business. Scott Brodbeck, publisher of ARLnow.com, who is expanding in the DC area, had a great comment about this in Nieman Lab: "If everybody's focused on the billion-opportunity in local, they're going to be missing out on a lot of other opportunities, because this isn't a billion-dollar space. This is a $1 million space."
- Patch was only quasi-local. While Patch hired journalists to cover highly granular "hyper-local" news, many were not from the community. From what I have seen among the more successful independent publishers as well as with established newspaper journalists, history with, connection to and passion for the local community is a significant driver of good journalistic and business results.
None of this suggests that only the indies will corner success. Communities may benefit from a mix of a local newspaper, a couple of online sites or blogs and TV coverage. In many communities, independent sites (and their readers) may benefit from the demise of competing Patches. In other communities, unfortunately, Patch may be the only or best source of local news and information available. Let's hope new sources of news can be established and that they heed the lessons of Patch.