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Summary:

AOL maintains that its Patch hyper-local news venture is not shutting down, but it has clearly failed to meet the promise of CEO Tim Armstrong’s vision — because the model it was built on was the wrong approach to the problem

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AOL chief executive Tim Armstrong is apparently scrambling to downplay the implications of a New York Times weekend piece on the company’s troubled Patch unit, which suggested that the hyper-local journalism business might be headed for the bone-yard. According to an internal memo, the AOL subsidiary is not shutting down — and while it has shed a number of staff, the company maintains that it is a going concern and is “talking with potential partners.”

These protests aside, however, Patch is clearly a failure — in the sense that it has failed to meet the ambitious goals that Armstrong had for the unit when he first came up with the idea in 2007, before he became CEO of AOL. His vision at the time was of a network of semi-independent local journalists covering thousands of local communities spanning the entire United States, a vision sparked by a look at his own community of Riverside, Conn., where he said no one was really covering the topics that mattered to residents like himself.

That was — and is — almost certainly true of many communities where there is no strong local news outlet, either because the town or region is too small or because the newspaper that used to do that decided that the economics didn’t work. But Patch’s model was completely wrong for solving that problem, as author and journalism professor Jeff Jarvis points out in a post.

Artisanal journalism, not assembly-line

As I and a number of others have argued for some time, Armstrong’s solution to this hyper-local conundrum — and the related hyper-local advertising strategy he hoped would help pay for it — was fatally flawed because it is an inherently industrialized approach to what isn’t an industrial problem. In a nutshell, hyper-local news or journalism or content of any kind isn’t something that can scale to the point where a single massive entity like AOL can apply an assembly-line solution and profit.

Part of the reason for that is economic, and related to the breakdown of the traditional advertising model, as well as the disruptive effect that digital content has had on the journalism business, both large and small. But part of it is about what makes hyper-local news work at all, and that is community.

Virtually all of the successful small journalism companies that cover a specific town or series of towns — efforts like Howard Owens’ Batavian or West Seattle Blog — are still around because they have formed an incredibly tight bond with their community. This is the thing that Patch seemed to never really get a handle on. Whether it’s in print or online, no one is going to connect with a “local” news site if it is a cookie-cutter version stamped out by an assembly line.

Kennedy tweet

Hyper-local news companies that work, whether they are newspapers or websites or both, are owned and run by passionate residents, and that passion is what sustains them when the money gets tight — which it almost certainly will. And that is also what gets them readers and advertisers. At the risk of overusing a popular term, think of it as “artisanal” journalism rather than the mass-produced kind.

Hyper-local isn’t a business, it’s a lifestyle

The harsh reality is that hyper-local content of the type that Armstrong envisioned for Patch — with everything from sports scores for the high-school football team to town council decisions about a zoning change for the local butcher shop — has never been a big business, and arguably never will be.

In a sense, Patch’s ambition was a new, digital-only version of the same model that national newspaper chains pursued over the past few decades in print: namely, buying up hundreds of small weeklies and dailies in tiny little towns and then distributing mass-produced content through them and monetizing it all with ads and flyers from local and national merchants. This model worked for a while, but it is now broken — and it is probably never going to return at the same scale.

Loundy tweet

Now, the only people investing in hyper-local media are people like billionaire Warren Buffett, who is buying up small papers with the intention of milking them for revenue until they expire, or local owners who are dedicated to covering their communities regardless of whether it’s a good business or not. And that’s simply not good enough for Patch or for AOL’s shareholders, nor should it be.

The graveyard of hyper-local journalism companies is littered with bodies already — startups like Bayosphere and Backfence and even EveryBlock, which tried to reduce the cost of the problem by applying algorithms to it (although it sounds like EveryBlock may be reborn). Maybe not today, but soon Patch’s dessicated corpse will almost certainly join that pile.

Post and thumbnail photos courtesy of Flickr user Stewart Chambers

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  1. The members of Local Independent Online News Publishers have been saying “local doesn’t scale” for years.

    But they’d disagree that local news isn’t a “good business.” It certainly can be – the 115+ members of LION Publishers are proving every day that local news reported with local leadership can be a serious, sustainable proposition.

    Patch and its ilk are failing not because local news isn’t a solid business, but because they’re not local. We’ve seen it again and again; giant chains trying to templatize the production of news. That’s not a tactic that worked in print for Gannett and others, and it certainly won’t work online.

    The networked plays seek to profit from communities, rather than being invested in them. Centralized planning leads to success in journalism just as effectively as it worked for Soviet agriculture.

    The local news industry is strong, healthy and growing — the real *local* segment of the industry.

    LION’s members and other locally run news outlets are finding success – because their readers and sponsors value their community connections. Local news sites can connect local small business owners with the engaged local readers who are their customer base — and do so effectively and affordably.

    We regularly see LION members announcing that their readership and revenues are reaching new heights, that they’re hiring new staffers and deepening their coverage. Yes, it takes passion — as well as a deep knowledge of the community and a committment to cover it appropriately — but there is a decent living to be made for talented, motivated publishers.

    Local news is successful when it truly *is* local — historically, when newspapers and radio stations were owned by families or local partnerships, they served their communities more effectively. Chains broke that model, focusing more on quarterly reports, stock prices and executive salaries than long-term investments. Local news organizations must be *of* their communities, not just *in* them to ship profits out of town. Local news must respect readers: know what they want to know, know what they need to know, and provide it quickly, accurately and comprehensively. Cookie-cutter editorial priorities mandated on a national level are the complete opposite of that.

    The withering of Patch isn’t the end of local news online. Rather, it’s a chance for talented, motivated enterpreneurs to tend their own gardens.

    1. Thanks, Dylan.

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  3. I love how what sparked Armstrong’s idea for Patch was his belief that his own community of Riverside, Connecticut, wasn’t being well covered. Although I trust that somebody at Patch sometime did demographic studies of more normal communities, I hope that Armstrong didn’t think Riverside was typical? Its median value of owner-occupied housing units is more than $1 million. Its median household income is $147,336 and median per capita income $77,193. Those are, respectively, 5.4, 2.8, and 2.7 times the median U.S. community’s figures! Perhaps Patch’s revenues would indeed have been better if the folks in each community it covered were as well off as Frank and Kathie Lee Gifford, TV ‘Judge Judy’ Sheindlin, Regis Philbin, or other Riverside residents. http://quickfacts.census.gov/qfd/states/09/0964530.html

  4. Yes, it is all about being in community and understanding what that activity is really activating and that is above everything else TRUST, as I wrote for the Huffington Post a few months ago. http://www.huffingtonpost.com/sally-duros/tech-titans-look-for-comm_b_4144899.html

  5. Interesting how many pundits are writing the obituary for Patch today and wrote another for paid circulation print community newspapers years ago. The truth is, plenty of print paid circ papers are still around, making money and paying their bills without the help of big corporations like AOL. The paper where I work was started in 1902 and we shrugged off competition from a couple of Patches when they opened in our area. They had sales people on the street while new advertisers were still calling us and walking in the front door with money to spend. Our paper was old when I was born in the early 1960s and with some luck, our stewardship will be good enough to keep it around after we’re dead. I’m sorry that some of our colleagues at Patch are probably going to lose their jobs, but then, they actively sought our company’s demise. How are we supposed to feel? Excuse me while I peel the foil off a bottle of champagne.

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