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June 7, 2021, 1:50 p.m.
Business Models

Ted Williams proved local news can be profitable. Now, he’ll try to replicate the success for Axios.

“As time goes on, even when you’re financially successful in media, the tendency is to do more and more stuff. If I look at media companies who are poorly run, everyone is really busy, stressed out, and they’re not making money.”

There’s been a glut of new initiatives focused on newsletters and local news. Nieman Lab has written about a bunch of them, including Tiny News Collective, Substack Local, IndieGraf, Overstory, and whatever Facebook’s up to here.

One of the most promising of the bunch is Axios Local. Late last year, the news organization known for its scoops and skim-friendly articles kicked off its local efforts by acquiring The Charlotte Agenda, soon rechristened Axios Charlotte. The first batch of cities included Charlotte, Denver, Tampa Bay, Minneapolis, Des Moines, and Bentonville, Arkansas. (Apart from Charlotte, Axios Denver has attracted the most subscribers; its newsletter goes out to 100,000 people daily. The other four cities split another 150,000 subscribers or so.) Now, Axios is hiring and expanding to eight more locations: Austin; Dallas; Atlanta; Chicago; Philadelphia; Nashville; Washington, D.C.; and Columbus, Ohio.

There’s been some healthy skepticism about Axios’s ability to generate profits in local news. But Axios CEO Jim VandeHei is bullish about the potential based, in no small part, on what he saw under the hood at Charlotte Agenda. He said he jumped at the chance to hire the Agenda’s cofounder and publisher, Ted Williams, to be the general manager of Axios Local.

“Ted had me at hello — literally,” VandeHei told me. “The moment he said he had cracked the very code in Charlotte that we were trying to unlock in cities everywhere, it was a no-brainer to see if we could bring him in.”

The Charlotte Agenda has been profitable for several years running and generated a reported $2.2 million in revenue in 2019. The newsletter and website are free, and its membership program had 1,700 paying supporters at the time of acquisition.

“If we can do in other cities what he did in Charlotte, we will grow a huge, profitable division and help revitalize local coverage,” VandeHei said.

I talked to Williams about what his days look like as general manager of Axios Local, replicating the success he found in Charlotte in new (bigger) cities, and more. Our conversation, edited for length and clarity, is below.

Sarah Scire: I’m sorry about this first question but — were your parents big baseball fans?

Ted Williams: My mom says Theodore runs in our family — though I don’t actually know anyone in the family named Theodore — and my dad is a big baseball fan. So, I can’t get an accurate answer to that.

I did interview for a job in Boston 10, maybe 15 years ago and I couldn’t work there. There’s no way I could do it.

Scire: Ah, yes — well I am calling you from Boston and I grew up in the area. I had a feeling I wasn’t the first to ask! You’re the GM of Axios Local now. Can we start with what that looks like, day-to-day?

Williams: Most of it’s spent trying to build the business. So I spend a lot of time thinking about the strategy of how to go into markets, how to make sure we hire the very best people, how to make sure that our product is something that smart professionals in these cities wake up to every morning.

I have been spending a lot of time thinking through how to take some of the things that have worked well here in Charlotte, in terms of driving revenue, and then roll them out to these additional markets. It’s a super exciting time. I feel like we’ve got really good evidence that what we’re doing is connecting with smart professionals in these cities and then, we’re grounded in the reality of what it’s like to actually grow a local media business together. We’ve been doing this in Charlotte for the past six years or so.

Scire: Right. That’s one of the reasons I was so excited to talk to talk to you. Nieman Lab has written about Charlotte Agenda a handful of times and you’re bringing that wealth of experience to Axios Local. Can you tell me the story of being acquired?

Williams: Around our office in Charlotte, I’d talk to the team about writing more in the Axios style. I would go around saying, “Let’s write the story in Axios style and by that I mean, direct, smart, [and] getting people the information that they need as quickly as possible.” So I always respected Axios, read them, and loved the way that they were building a digital news operation.

Then I read a Wall Street Journal article about them getting into local media and sent the CEO [Jim VandeHei] an email. I think he responded back two minutes later, and then we jumped on a phone call — maybe that afternoon or maybe the next few days — and outlined the deal right there.

Charlotte isn’t a large operation but I wanted to make sure that the 11 people in Charlotte all had a good opportunity to grow within Axios and that Axios wouldn’t want to do anything too different here. We did a two-day learning session where we got to know their team and they got to know us before the deal closed. And then I think the deal closed in the middle of December.

Scire: Talk about a return on one email. It sounds like you had questions about making sure your employees would be taken care of. What questions did Axios have for you?

Williams: I would say most of the questions were around people. I think Axios has built a really strong culture and they wanted to make sure that the Charlotte team fit within that culture. That was the number one thing.

And then, from a business standpoint, they wanted to know how we developed the mix of revenue that we have, how we put together long-term sponsorship deals with local buyers, and how we’ve managed to roll out the job board, event board, and membership program.

They were curious and interested in talking to a local operator who had done these things within a market and done it over a long period of time. We’ve been profitable for five years and never needed more than the original $50,000 to get the business started. We’ve always been a self-funded, profitable operation. I think they liked that mentality and they were interested in how we built the actual business over time.

Scire: Is that the same mix of revenue streams planned for Axios Local? Job boards, event listings, possibly a membership program? With advertising that’s a mix of national and local?

Williams: Yes. A big benefit of being an Axios is they know a lot of national advertisers very, very well. Those advertisers are looking to reach influential, smart professionals in growing cities throughout the U.S., so you’ve got a built-in national ad base.

Then you have the group in Charlotte that have all of the battle scars from building a local media operation from scratch.

I think that combination will give us a good mix of national advertisers and local and regional ad buyers who we’ve learned how to work well with. And then we’ll roll out a job board, event board, and membership program over time.

Scire: Can you walk us through how you think about the membership program? I know Axios has promised readers it won’t put up a paywall, that its content will remain free.

Williams: We think about it as people that live in a city that want to support the ongoing operation of local journalism, and how we can develop a deeper relationship with those people. Right now, events is a big thing and virtual events are something we’ve done here.

We’ve learned a lot of people want to feel like an insider and that if they believe in the mission of the organization, they want to support what’s happening. I think people are becoming smarter and smarter about media.

Scire: That’s interesting. It does feel like some people have a new understanding about the precariousness local newspapers and local news organizations are experiencing. Is that a shift you’ve noticed, or even intentionally tried to create in the messaging you’ve put out the readers?

Williams: We don’t talk about it in terms of competition or what’s happening at the national level, but I do think people understand it. For a certain portion of the population, you can say, “Hey, listen. We’re able to do more reporting on topics that you care about, but that requires more resources. As revenue grows, so can our local journalism. We’d love for you to be a part of that.” I think that they intuitively understand that much more now than they did three or five years ago.

Scire: I saw that Axios Local hit a milestone of 300,000 subscribers a few weeks ago. Where are you now? Can we talk about how evenly — or not — those are distributed across the cities?

Williams: Yes, we’re at 350,000 email subscribers right now. Charlotte has more than 100,000 and Denver just hit 100,000, too.

Scire: Eight more cities are going to be added. Can you tell me about the first batch compared to the second batch? What do these cities have in common or what did you consider when choosing which ones to include?

Williams: I wasn’t at Axios when the decision was made on that first batch, but if you look at the cities [in the second batch] in terms of geography and population size, they’re very different.

With these additional eight markets, we were looking at major metros — in the top 50 within the U.S. in terms of population — and then discounting New York and LA for being larger markets with more complex media ecosystems. We looked at what we thought were really good ad markets and we looked at how the markets can play off each other. People that live in Dallas are interested in news coming out of Austin and vice versa.

We also looked at general news and excitement over these cities, too. It was a mix of art, and a bunch of data, too.

Scire: I’ve seen some of the job listings for the new cities. It sounds like you’ve typically hired two reporters to produce the daily newsletter. Can you talk about what you’re looking for when hiring?

Williams: I think our philosophy is pretty simple. We want to hire the best reporters in each city that we go into. We’re only hiring two journalists in each city to get things started. Then we’ll centralize or possibly regionalize some editing operations and centralize graphics, illustrations, and any type of data and visuals. It’s, overall, a very lean operation, and very newsletter-first. I think as time goes on and we build up audience, we’ll have to go reinvest in these different spots. And then, from a business standpoint, we’ll be hiring a lot of sales talent and operations talent to support these cities, too.

Scire: And when you say the “best” journalists — what are we talking about? The journalists with the most local knowledge, writers who have strong voices to carry a newsletter, people who already write in a style that’s close to, uh, Smart Brevity?

Williams: I would say it’s probably those first two things. Who is breaking the most important, the most impactful news in a city? And then who is well-known in the cities? Who do smart professionals and the decision makers of that city read? That’s who we’re looking for.

Scire: For these last couple of questions, I was hoping we can take a step back. There’s been this groundswell of new news organizations focused specifically focused on local news and newsletters. There are also companies like Substack and Facebook putting money aside for local, too. What is it about local news and newsletters that go so well together? What do you attribute this groundswell to?

Williams: I think people want to wake up and read something that is finite, that gets them up to speed on the items they need to know to make smarter local decisions. I think that need was met by newspapers and the morning TV news and then, as consumption changes, I think a newsletter is a really good format for delivering that information to people, again, in a very quick and finite way. I do think that newsletters, as a product, really fits that fundamental need more so than other things.

Scire: I know you have experience building media companies from the ground up in Charlotte and, for a bit, Raleigh. Now, you’re looking at local news operations across many different cities. Has there been anything surprising or interesting to you?

Williams: We’ve had a lot of success in Charlotte because we have had relentless focus on doing a very few things really well. As time goes on, even when you’re financially successful in media, the tendency is to do more and more stuff. If I look at media companies that are poorly run, everyone is really busy, stressed out, and they’re not making money. Most of the time — and this is true in life — if you don’t know what to do, you just do a lot of stuff. People that do know what to do, [they] do very few things.

I really credit a lot of our impact and a lot of our business success to just staying focused, over a long period of time, on sending a really good daily newsletter, updating the website with a couple stories every single day, and running a Instagram handle. That’s all we do. I’m really proud and I think the results have been really strong because of the focus there. I really respect and admire disciplined media companies.

Scire: Are you going to tell me which media companies you think are undisciplined?

Williams: We don’t spend a ton of time thinking through and looking at other local media operations, to be honest. I think that us not getting caught up in the more academic or thought bubble-ish world [that asks] “Who’s going to save local journalism?” but instead staying focused on the reader and focused on creating a really good product has allowed us to perform better. If anything, flying under the radar a little bit helps us out. We’re not looking at what other people are doing and knee-jerk copying that.

The truth is, local media is very difficult. It’s also, in my opinion, not a complicated business. You have to be patient, disciplined, and laser-focused on the reader and very few things. If you do that over a long period of time, you can develop a pretty good business.

Scire: Axios doesn’t publish opinion content and it’s said in its reader bill of rights that it never will. Is local opinion something that you did at Charlotte Agenda? How did you think about that decision?

Williams: I think, like any local media company, we’ve experimented on different coverage topics. I think the way Axios views coverage — it’s a very clinical approach to approach to news. I do believe that it fits local really well.

I feel like the opinion side, you just have enough of that in life, you know? Facebook fills that void, NextDoor fills that void, so I think for the smart professional, they don’t really need to wake up to opinions. That doesn’t mean our newsletters don’t have voice and don’t have a sense of humor built-in or don’t feel like they’re written from real people. I think that’s a very important side of it, but I just think opinion is not space that we’re going to go fill.

Scire: Is there anything I forgot to ask you about? Something you’re particularly excited about?

Williams: We’re literally hiring in these cities right now. I think it’s an exciting time in local media. I know that sounds weird. But as consumer habits change, as business models change, there’s a really rewarding opportunity to build what the future looks like.

I think it’s important that readers — especially Nieman Lab readers — understand there’s a future in this. It’s a sustainable future — we’ve proved it out. And then, just from a job applicant standpoint, if people are looking to build the future, look at Axios. Look at how pragmatic it is getting into local media. I think the right type of candidate really craves that.

Photo of Ted Williams by Symphony Webber.

POSTED     June 7, 2021, 1:50 p.m.
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