As yesterday’s local media companies wind down, tomorrow’s local media companies are being born.
And like actual childbirth, local media company birth isn’t postcard pretty. Yesterday’s local media will underestimate and scoff at these scrappy news startups as they fumble with accuracy, delivery, ad products, pricing, and polish.
You’ll hear the old guard say, “That’s not actual news” and “They’re just an Instagram handle” and “Proper news organizations don’t do that” and “They’re not making any real money.”
As the media echo chamber gets louder using tired terms like “mobile storytelling,” tomorrow’s local media companies are relentlessly focused on finding product/market fit. Why? Money.
Money matters. Local media innovation is as much about the business model as it is about the journalism.
What works for Vox, or even The New York Times, won’t work for local media. In fact, as yesterday’s local media companies run toward digital models pioneered by Vox or The New York Times, they’re actually accelerating their death.
But make no mistake, the financial rewards for building tomorrow’s Gannett, Lee, Tribune, and McClatchy are massive.
The $300 million that AOL burned with Patch.com provides an excellent learning tool for BuzzFeed, Vox, and Vice. As smart as these global media companies are, they don’t have the hustle or experience required to build a local media company.
Because of this, you’ll see BuzzFeed, Vox, and Vice acquire and actually listen to local media companies that are (a) growing and (b) profitable. Selling to Nike is different than selling to Roger’s Jewelry Shop. Serving a neighborhood is different than serving the globe.
Here’s what the business development teams at BuzzFeed, Vox and VICE will look for as they evaluate local media investments and acquisitions:
- No grant funding. Business plan competitions and grant funding are what losers do when they don’t want to do the hard stuff — sell and build sustainable models. If a local media startup has a grant to “transform” something, they’re probably not transformative.
- Team humility. Tomorrow’s local media talent will be humble, open, and exceptional at learning. You’d be shocked at how big of a strategic advantage this is in the world of journalism.
- Usefulness. News and tools that will focus on solving problems and answering questions for readers. Everything from “What’s the most cost effective way for me to buy a local craft beer keg for my cookout?” to “Where should I send my daughter to kindergarten?” No Pulitzers, but plenty of neighbors saying “thank you.”
- Native advertising. Ad products that aren’t display and actually work. You’ll see repeat customers.
- Leveraged technology approach. Shockingly low production costs. Local media entrepreneurs will focus on having well designed digital products and first-class web-based tools. There’s no excuse for high production costs.
- Community activation. The idea that you’re going to have a newsroom of 100 full-time, employed journalists in a city of less than 1 million people is insanity. And the idea that this large newsroom is somehow smarter than the community is the type of attitude that leads to death.
- Marketplace creation. Strategic approaches to creating marketplaces that are inherently local: jobs, rentals, tutors, nannies, etc. Even as large national players focus on these verticals, there will continue to be opportunities for a trusted brand to sit on top of low-tech digital marketplaces.
- Limited service revenue. Yesterday’s local media is obsessed with becoming mini ad agencies. While there is opportunity here, the idea is lazy and will ultimately lose. Truly great local media companies will have few (if any) lines of service revenue.
- Focus on choke points. There’s a reason why local TV affiliates and newspaper properties throw off all sorts of cash (for now). You have a bunch of people looking at the same thing. It’s easy to buy and easy to understand. Tomorrow’s local media companies will be really good at choke points: podcasts, homepages, newsletters, feeds, video, events, and even print — large audiences looking at, listening to, or doing the same thing.
- Profits. Strategically, most media should scale, then monetize. Not local media. Because scale is limited to geography, monetizing matters more — to delay that activity is to delay finding true product/market fit.
So what will BuzzFeed, Vox, and Vice bring to local media startups? Data expertise, technology, and national advertising relationships.
And the marriage will be beautiful — both for local communities and investors.