When digital ads pay for local news

By Felix Salmon
September 7, 2011

In the world of regional newspapers, Journal Register Company and MediaNews Group are very big fish; they’re now merging, and the merged entity to be called Digital First Media, will be run by John Paton. Who writes that already he’s reaching an important milestone:

If our dailies continue on the trend they are on right now, by the end of the year they will have brought in more digital revenue than the costs of running their newsrooms.

Digital revenues can pay for newspaper newsrooms.

It seems to me that Digital First is much more likely to solve the problem of building strong — and profitable — web-based local media than is AOL’s Patch.

The first and most important reason is that local newspapers are, and always have been, the first best source of local ad-sales talent. They know their towns, they know their advertisers, they know their readers. Local advertising relationships are valuable and expensive things to build, and AOL doesn’t have any.

On the other side of the editorial divide, local newspapers are also the first best source of local news, and are generally much more respected and trusted in local communities than any cookie-cutter Patch site is likely to become. On an individual, case-by-case basis, it’s possible to find hyperlocal websites which are better than the local print rag. And of course it’s trivially true that wherever there isn’t a local print newspaper, any Patch site would be an improvement on nothing. But if you’re looking for a national-scale business with trust and local content in the community, Digital First is an obvious place to start. More than Patch, and indeed more than Groupon, too.

Finally there’s the opportunity for economies of scale. In theory, this is common to both Digital First and Patch: they both share hosting, design, development and other expenses across a large network of sites. But even here I think that Digital First has the edge: they’re far more advanced in terms of being able to share content, too. Local newspapers aren’t all local news, after all. Things like features, reviews, columns, comic strips — anything which can be syndicated, basically — can be shared.

Because Patch is web-native, syndicated content feels weirder there: this is an area where the old-fashioned aura of newsprint can help a website do things that a brand-new website would find much harder to get away with. But print ads should be easily capable of covering the marginal cost of printing and distributing a local paper, which means that print editions are not going to go away any time soon. So Digital First will, for the foreseeable future, be able to continue to have that hard-to-replicate feel of an old-fashioned newspaper, even as it embraces reader-generated content, new-media workflows, and the rest. The simple existence of a print product, found on the front shelf of the local grocery store, makes a very big difference.

None of which is to say that Paton’s job is an easy one. It’s not — in fact, it’s very hard. But I’d much rather be in Paton’s shoes right now than whomever has been put in charge of running Patch this week.

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Comments
One comment so far

I agree with everything you say here, and understand the importance of this company i’ve never heard about. The presumption with AOL’s current cicrumstance was that people would migrate over to patch to regain local notoriety. Of course, it’s much easier to do it through local online newspapers, especially when the only way to make money off patch is by directing people to your local blog.

The question for every person online now is what do we give away for free, what should corporations crowdsource, and what will people pay for other than magazines?

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