January 10, 2012

Will Patch’s fate foretell the future of local online news? Hardly

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2012 may be the year that the other shoe drops at Patch - reports suggest AOL’s chain of some 800 local online news sites is under pressure. But if Patch does disappear, don’t take that as evidence that local online news isn’t a viable business. Here are four reasons why:

Michelle Ferrier, publisher of locallygrownnews.com reports that Patch’s future was a topic of conversation at last week’s ASU Scripps Howard Journalism Entrepreneurship Institute.

She told fellow independent publishers in the Block by Block group on Facebook, that one day culminated “in bar talk with Jeff Jarvis and Dan Gillmor on hyperlocals: Patch, Backfence, GrowthSpur and other fail(ed)(ing) efforts. ‘Nuclear winter’ coming to hyperlocal space as Patch is in death throes which will cast shadow over funding for hyperlocals.”

However, if Patch fails, that should not be seen as a sign that local online news ventures are doomed.

“Would the demise of Patch mean the end of hyperlocal news? Hardly,” said Debbie Galant, founder and co-owner of Baristanet. That would be like saying that if Applebee’s went out of business, that would be the end of people going to restaurants.”

I asked Galant and three other independent online community news publishers to say why homegrown ventures are different from Patch.

1. There is money in it.

Local online news may not have the profits that corporations and investors are looking for, but more news entrepreneur are cracking the revenue code, among them Howard Owens, who reports annual revenue in six-figures at The Batavian.

“Simply put: there is money to be made in local online journalism. While a failure for a high-profile, big media start up will scare off investors in the sector, nearly all of the successful local news sites are boot-strap operations,” Owens said. “The local indies making money now will stay in business and grow, and new entrepreneurs will enter the field.”

2. As small businesses, homegrown community sites have more affinity with local advertisers.

“What strikes me is that ‘nationwide scale’ is always seen as a big benefit when the real work is at the small scale. For indie publishers, the impotant partners aren’t huge brands, but small businesses. The key strategies are the ones that uniquely work for their community. That’s the essence of local,” said Ben Ilfeld, founder of the Sacramento Press.

3. Local publishers are part of their communities and that’s reflected in the coverage. “Independent hyperlocal media brings an authenticity and a nuanced coverage to the news that corporate coverages rarely achieves. Because staff lives and works in the community, there is an ‘us,’ not a ‘them,’ that translates into more vibrant, reflective news and discussion,” Susan Mernit, founder and editor of Oakland Local, said.

“As much as venture capitalists and business editors want businesses to scale, the fact is that local is not about scale. Local is about place, relationships, character, uniqueness,” Galant said.

4. Independent publishers are getting smarter.

Many any failures in news innovation can be traced to poor execution of the idea, not to the idea itself. In the local online news space, I’ve worked with a lot of independent publishers, and their problem is not a lack of readers or advertisers. It’s a lack of expertise - mostly a lack of business expertise. But they’re learning (and KDMC is trying to help). This makes me confident that small, independent news sites will grow.

Galant says Patch has had something to do with that as well.

“The fact is that in the past year—partly as a result of Patch—the indie hyperlocal movement has organized itself and begun to share best practices in a meaningful way. We are smarter than ever, and getting better at what we do.” Update: This post from Street Fight updates Patch Media president Warren Webster’s more upbeat take on Patch - he says the sites are showing consistent growth in traffic. And revenue?  “We’re expecting very meaningful growth in monetization in 2012 and 2013,” Webster told Street Fight.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

By Michele McLellan, 01/10/12 at 5:23 am

Comments

Just a quick reminder that Authentically Local isn’t really the full expression of indie sites organizing. This is: http://blog.fourcher.net/2011/10/01/independent-local-online-news-publishers-trade-group-formed/

By Anna Tarkov, 01/10/12 at 3:25 pm

Thanks. Good point!

By Michele McLellan, 01/10/12 at 4:00 pm

There’s a big premise here that isn’t contextualized: that Patch is failing. What’s the argument for this conclusion, aside from some bar banter?

By Emily Henry, 01/11/12 at 2:32 pm

There have been a number of reports questioning whether Patch is a sustainable model in its current form or suggesting that it is not. Since Patch does not release a lot of data about revenue or traffic it is hard to judge or to know how many of its sites are actually profitable.
For some context, I did include this link in the summary paragraph: http://gigaom.com/2011/10/06/how-long-can-aol-stay-committed-to-patch/ I felt it summarized the key issues.
I think Patch’s sustainability is a fair question and I think the issue raised in the bar discussion was a different one -  the impact any failure of Patch might have on the larger field - which is very diverse but not generally seen that way. Perhaps my wording was clumsy.
I have asked Patch to weigh in. I should have contacted them when I was writing the post. Sorry for the oversight and hope I can add a Patch comment soon.

By Michele McLellan, 01/11/12 at 4:17 pm

There have been a number of reports questioning whether Patch is a sustainable model in its current form or suggesting that it is not. Since Patch does not release a lot of data about revenue or traffic it is hard to judge or to know how many of its sites are actually profitable.
For some context, I did include this link in the summary paragraph: http://gigaom.com/2011/10/06/how-long-can-aol-stay-committed-to-patch/ I felt it summarized the key issues.
I think Patch’s sustainability is a fair question and I think the issue raised in the bar discussion was a different one -  the impact any failure of Patch might have on the larger field - which is very diverse but not generally seen that way. Perhaps my wording was clumsy.
I have asked Patch to weigh in. I should have contacted them when I was writing the post. Sorry for the oversight and hope I can add a Patch comment soon.

By Michele McLellan, 01/11/12 at 4:17 pm