The future belongs to the independents

1885 Newspaper Publishers

1885 Newspaper Publishers



Look at the pictures of these men.

Set aside the fact that they are all middle-aged white men, consider the other traits they have in common.

They all owned newspapers in 1885 that were not part of chains. They weren’t concerned about scale. They owned their newspapers at a time before big department stores bought inserts on Sundays or recruitment agencies bought blocks of help wanted ads. The sold their papers for a penny a piece. The term “professional journalism” was not a phrase they had ever heard in their lives. If the newspaper they published in 1885 was still alive in 1985 and they strolled into the newsroom, they would have been shocked at the multitudes of reporters sitting at desks and found the whole notion preposterous.

The news business was very different in 1885.

There are two trends in local online journalism today.

One trend is “throw a lot of money at the problem.” This is the faction that says “scale” is what is needed in local news. The proponents give us Patch and Main Street Connect.

They ignore the fact that no chain in the history of mass media has ever begun as a chain. Frank Gannett owned but one newspaper at one time, as did E. W. Scripps, Joseph Pulitzer and even William Randolph Hearst.

The first great newspaper chains were built one acquisition at a time (and they weren’t publicly traded companies).

The other trend is the independent online publishers. This are mostly bootstrapped operations.

But the independents are also the ones with the greatest percentage of sites that are actually making money.

There are at least a dozen, and perhaps as many as 20 local independent news sites pulling in more than $100,000 in annual revenue. Tim Armstrong would kill to have even 10 Patch sites with that kind of revenue at this point.

The future doesn’t belong to the insta-chains. It belongs to the independents.  Like the newspaper publishers of the 19th Century and early 20th Century, they are building real businesses, forging alliances in their communities, defining the future of journalism, serving their communities and building the foundation of long-term profitable businesses.  They are doing it through hard work, with little to no investment capitol and showing real progress.

I know this not because it’s how I view myself.  I know this because I personally know most of the men and women doing it.  I’m a witness to what is really working, and what isn’t.  Those who focus too much on “scale” are missing the real scale being built in a hundred different towns and suburbs.

39 thoughts on “The future belongs to the independents

  1. Hey Howard, Why do you keep bashing me when I do nothing but sing your praises?

    If every community in America could have a Howard Owens, the future of news would be dandy. Alas, America has 6000 communities and maybe 6 Howard Owens-caliber local publishers — maybe 12 — you get the point. Main Street Connect wants to deliver high-quality profitable community news to the 5994 communities you can’t get to.

    I’ve spent my life publishing conscientious high-quality community news. I’ve spent so long doing it I think I was one of the guys you had a picture of on your column. I have never viewed Main Street Connect as engaged in a contest with independents. Our mission is to provide good news to all the communities that have lost or will lose their newspapers.

    I see us all as trying to accomplish the same goal, not fighting with one another. Cheers, Carll

  2. Carll, I’m not bashing you. Two adults can disagree over business philosophy without it being personal.

    First, let’s begin with the philosophical notion that chains are evil — robbing communities of their soul and prosperity, from A&P 100 years ago up through Walmart today.

    Second, the primary reason for the decline of American journalism is the creation of the chain newspaper company. The soul purpose of the chain is to remove cash from communities that once had close and personal relationships their their newspapers. Chains have done 10 times more damage to journalism in the United States than Craigslist could ever hope to accomplish. The idea that “quality journalism” and “chain” belong in the same sentence is nonsensical.

    Third, may you live long and prosper. It’s not that I wish Main Street Connect ill, nor Patch, I just firmly believe it’s the wrong approach. Nothing personal, I don’t like chain journalism. I don’t believe in it. I don’t believe it’s good for communities. I don’t believe it’s good for America.

    Thank you for seeing value in my meager accomplishments; however, in no way am I insulting you to state that I have a philosophical and political view that is opposed to the chain business model.

    Finally, this post is much more about encouraging independent publishers and inspiring aspiring publishers than it is bashing Main Street Connect or Patch. I’ve not bashed at all. I’ve merely stated both the competitive and philosophical advantage of the indie over the chain.

    I should also mention that I completely reject the notion that I am somehow unique or special or that 6,000 other people can’t accomplish what I have done. What I’ve accomplished so far is not anything magical (nor is it yet anything all that great). It’s simply a matter of common sense and a willingness to work hard. Anybody willing to put those two ingredients in the same stew will have equal success.

    And so the rub is — insta-chains are a threat to thousands of potential indie publishers; they can do damage to many locally based news orgs while those start ups are still in the cradle, and to contemplate that makes me sad. I would hate to see any newly minted publisher fail, or an aspiring publisher fail to launch, because of a better-funded insta-chain site.

    At least, Carll, I’ve never said what you do is a “hobby site” or that Main Street Connect isn’t a “real business,” as you’ve said about me and my indie colleagues. Talk about bashing …

  3. Hey Howard,

    True, I did say “hobby” or “passion” sites awhile ago, but as soon as I realized I’d given offence, I scotched that language from my lexicon. My temperament is not pugilistic.

    True, too, we disagree about the replicability of you. You disclaim your accomplishment as nothing special, but I don’t see many of your ilk. In the nearly three years I’ve been in this business, I can still count the capable hyperlocal publishers on my fingers and toes.

    When I started Main Street Connect, I believed it was possible to create sites one at a time, but the economics buffaloed me. How could we afford not only the journalistic, design, reporting, sales, marketing, community relations, finance, and management talent that newspapers had depended on, but also the expertise in technology, social media, analytics, recirculation, and innovation demanded by this emerging medium? Building a CMS was way beyond my capacity — the few OK ones on the shelf cost a bundle and would prove inflexible over time. We have probably spent a thousand smart hours working with local Realtors to understand their needs and provide them a medium that would equivalate the role once played by community newspapers; ditto, auto-dealers; ditto, health care providers. Our team of more than half a dozen brilliant young engineers are ceaselessly inventing new ways to bring news and information more effectively and agreeably to our core reader, the Main Street Mom. In the wide world of analytics – a boon to any publisher who wants to fathom his readers and customers – you need skill and experience to understand your data, otherwise it just sits there mute and useless.

    The list goes on. At the Street Smart Conference, I struggled to understand what the dazzling young speakers were telling us. I could spend all my time learning about industry developments and never get any work done. Our starkest lesson, building Main Street Connect, is that creating high-quality profitable community news sites is hard – harder than we imagined – and the more we do, the more we realize how much we have to learn.

    For community news to grow beyond the single-site owner-operator model, a publisher will need to access the skills, talent and money necessary to be successful online. That means scale. Paradoxically, online, bigger will be better. I was led to this conclusion not by a desire to build a huge company, but by the desire to serve our neighbors better. The logic seemed inexorable. One of me was not enough. Ten of me was not enough. A hundred-plus of me has not proved enough. Next week, we announce our new CEO, a terrific talent, as I take on the role of Founder and Chair and still, we will not be enough!

    In the end, this debate is not hypothetical. Readers choose. They select the sites they prefer. No one can buy their allegiance. Nor do they really care who created a site. If it’s good, they come; if it’s not, they don’t.

    You and MSC will continue to do our best by the neighbors we serve. We’re in this together. The world is plenty wide for all sorts of models.

    Cheers, Carll

  4. The conceit of your approach, Carll, is that you believe that because you have “half a dozen brilliant young engineers are ceaselessly inventing new ways” that you have a competitive advantage that is insurmountable.

    It isn’t.

    The way I see it, is that you and Patch are Starbucks and Caribou Coffee, while Howard and I are Metropolis (Chicago) and Coffee People (Portland). We can exist near you, compete with you and even have a higher margin – but not a higher EBITDA.

    A successful publication is as much art as it is business. Those of us on the smaller end will need to master the art. For you on the higher end, you’ll need to master the business.

    I believe both can succeed.

  5. Howard — You’re absolutely right. You can’t scale local relationships. And to those who think you can’t pull off an independent site in this economy, we just celebrated one year in business in a community of +/-10,000 people at MilfordLIVE.com, our website/PDF newspaper operation serving Milford, DE. If we can do an mid-five-figure first year in a down economy in a small town, the independent hyperlocal is possible anywhere.

  6. Hey Vouchey, I think our comments crisscrossed — but as you see, I agree with you: we’re all in this together. I never argued that Main Street Connect possessed “a competitive edge that is insurmountable.” It’s not what I believe on a per-town basis. I only wanted to clarify the logic that resulted in our structure. You are quite right: Main Street Connect aspires to be a Starbucks, excellent and familiar in all our stores while keeping faith with individual markets. Can this be done? Get back to me in a couple of years and I may have an answer!

    This is a new business and we are all experimenters. Our readers are the better for it.

  7. Thank you, Howard, for pointing out the key ingredient to success in independent publishing — a passion for the community you are in. No chain run from a corporate headquarters hundreds or thousands of miles away can duplicate that.

  8. Carll, I appreciate your willingness to engage in a conversation and share so much of your thinking on this topic. Not too many people in your position would, and that speaks well of your character.

    However, we’re still in fundamental disagreement in nearly every respect.

    “In the nearly three years I’ve been in this business, I can still count the capable hyperlocal publishers on my fingers and toes. ”

    True, there aren’t too many successful local publishers yet, but it’s still early. Success will beget success. Just like in technology, there are always the innovators and then early adapters before you get to the early majority. Local online news publishing is probably still in the innovator stage, maybe just crossing into the early adapter phase. I have little doubt that as I and others have continued and growing success, more aspiring publishers will emerge. Personally, in more than 25 years the news game, I’ve known a dozen or more people who have the right combination of drive and savvy to jump into a local news start up.

    But here’s where our core disagreements begin:

    “How could we afford not only the journalistic, design, reporting, sales, marketing, community relations, finance, and management talent that newspapers had depended on, but also the expertise in technology, social media, analytics, recirculation, and innovation demanded by this emerging medium?”

    The question should be, “how can I afford,” but how can I wring out costs?

    For about a decade working for newspaper companies, I kept trying to figure out, “how can we make more money online so we can support this super structure of newspaper journalism.” The birth of The Batavian came when I figured out the answer to the question is in the inverse. In my previous jobs, I’d proven/figured out how to make pretty darn good money online. What I needed to do was figure out how to run a news operation that scaled to the amount of money I knew how to make (and fwiw, I’m not even 25 percent of the way there with The Batavian).

    All of the things you list above can be done less expensively and more efficiently than you seem to believe.

    “Building a CMS was way beyond my capacity …” OK, funny thing is, I’ve built a CMS. I hand coded my first blog using Cold Fusion in 2002. I started it before there was any such thing as WordPress. Now we have WordPress and Drupal. Who the hell would spend time building a CMS when there are good ones available for free. The learning curve on Drupal is a little steep, but anybody can launch a WordPress site from conception to publishing within hours.

    “For community news to grow beyond the single-site owner-operator model …”

    Why does it need to grow beyond “the single-site owner-operator model”? I can’t relate.

    “.. a publisher will need to access the skills, talent and money necessary to be successful online …”

    Setting aside the money issue for a moment (which is not unnecessary, but tend to overstate the need), everything else is part of the reason we’re forming an independent publisher’s association.

    “That means scale.”

    Ah, scale, the fools gold of local online news publishing …

    “… online, bigger will be better…” No, at least for now, bigger is always worse.

    “I was led to this conclusion not by a desire to build a huge company, but by the desire to serve our neighbors better. The logic seemed inexorable. One of me was not enough. Ten of me was not enough. A hundred-plus of me has not proved enough. ”

    Carll, the math is all backwards. It’s not a question of “not enough.” It’s a question of too much. Too much expense, too much overhead, too much capital at risk.

    The web is fundamentally disruptive. It’s also the most turbulent media environment in history. The approach needs to be “how much can I do with as little as possible?”

    I’m sorry to hear you’re giving up the CEO role. Founders giving up the CEO role rarely works out for start ups. There are far more Yahoo!s than Googles on that front. I don’t care how talented your new hire is, he’s not you. He can’t possibly have your vision, your passion, your drive.

    But Main Street Connect adding a CEO is terribly illustrative of the problem. You’re adding overhead, overhead that must be covered by revenue derived from local communities. Not only do you steepen the curve to profitability, you commit two sins against the local communities you say you serve — the money sent to HQ is money that could be used to provide better pay for journalists or hire more journalists in each local community. Second, you’re hurting the economies of local communities by shifting ad dollars from those communities to Worchester County. To illustrate with Walmart: For every $100 spent in a Walmart, only $14 stays in the local community. For every $100 spent at a locally owned store, $47 stays in the local community.

    Local owners are fundamentally more connected, more involved and more caring about their communities than out of town owners.

    This is why I’m part of the Authentically Local group and support local shopping in every manner I can.

    By trying to answer the “enough” question, you’re chasing your tail. It will never be enough, because every time you add another layer of trying to get to “enough” you’re putting the horizon of “enough” further out of reach. Adding expense on top of expense, especially with so much in flux and so much yet to be proven businesswise, trying to be “enough” is the surest way to never reach “enough.”

    “In the end, this debate is not hypothetical. Readers choose. They select the sites they prefer.”

    Previously and elsewhere you’ve said that you have nothing against the independents, a sort of “can’t we all get along” attitude, we can all co-exist. This position is fundamentally disingenuous. It’s an easy one to take when you have money in the bank. “Sure, we have nothing against you as we can hire more journalists, under cut your ad rates and outspend you on marketing — in the end, readers will decide who’s best!” The independent can’t afford to lose money. You can. That’s not a competitive advantage. That’s cheating. It’s fundamentally the reason that any where a group of independent publishers gather, nobody has anything good to say about Patch. The insta-chains are a threat to the livelihood of many independent publishers. And there should be a concern throughout the journalism world that the insta-chains will drive many independents out of business (or thwart them ever getting started) just before their chase for “enough” eventually causes their business models to implode, leaving many communities without strong local news voices.

  9. You should look up the Local Indie Online Publisher’s group on Facebook and request to join. We’ve currently got 101 members. We’re also forming a trade association that might interest you.

  10. Welcome to the indie publishing world. Good luck with your venture. You should look up Local Indie Online Publishers on Facebook at request to join.

  11. I wouldn’t call WordPress a good CMS, but ExpressionEngine is available for just a few hundred bucks, and is as capable as the systems that cost $20-100K.

    And I can’t count the number of successful hyperlocal chains on my fingers.

    There aren’t any.

  12. You can launch a site and be profitable with WP. That’s all I’m saying. For what I do, WP seems unsuitable, but I wouldn’t discourage an aspiring publisher from using it. It’s easy enough to get the data into EE or Drupal when you’re ready.

  13. Thanks, Howard. I’ve lurked here for a while. Already in the FB group this a.m., thanks to a shout from Uriah Kiser @ PotomacLocal.com, who contacted me after my post here, and approval from Tracy Record.

  14. Sorry, Carll. You’re wrong. There are far more than six local publishers of Howard’s caliber. I count myself among them, though you don’t know I exist. It’s really the height of arrogance to say people don’t exist because they’re not on your personal radar. There are hundreds, if not thousands, of us — professional journalists engaged in quality community journalism online, as independent news publishers.

    Maybe you should just open your eyes.

    Most of us are too busy doing what we do — and making good money at, too — to participate in these forums. That’s one of the things I admire about Howard. He manages to have a public presence AND run The Batavian. But don’t assume there aren’t many, less visible, less public “Howards” out here in the independent publisher universe.

  15. Sorry, Carll. You’re wrong. There are far more than six local publishers of Howard’s caliber. I count myself among them, though you don’t know I exist. It’s really the height of arrogance to say people don’t exist because they’re not on your personal radar. There are hundreds, if not thousands, of us — professional journalists engaged in quality community journalism online, as independent news publishers.

    Maybe you should just open your eyes.

    Most of us are too busy doing what we do — and making good money at, too — to participate in these forums. That’s one of the things I admire about Howard. He manages to have a public presence AND run The Batavian. But don’t assume there aren’t many, less visible, less public “Howards” out here in the independent publisher universe.

  16. Man, you’re getting a lot of conversation on this post. That’s great. I’m pretty sure you and I will never persuade each other but it’s fun talking.

    You’re right, it’s about the money. I firmly believe that there’s no free press that’s not a profitable press. I’ve spent my life making money in community publishing — I had to eat off what I earned — and with Main Street Connect we’re doing it again.

    Unlike another outfit in our space, we launched with a least-cost model to accomplish our goal. Our goal was to create an investment-worthy company, one that could raise serious money to accomplish admittedly ambitious objectives. We’re not scooping into our own or shareholders’ pockets to get this done. Every dollar in our operation is invested — by smart capitalists who believe Main Street Connect will give them a good return. I hope they’re right.

    Truth is, I couldn’t see my way to a cheaper model. You tell me I could code. You don’t know me! I could sooner walk to China than I could code — it’s just not in me. Yes, I can sell an ad — but one guy could not sell and fulfill the 500-plus advertisers we’ve signed up in 22 months. Could I cover a town board meeting? You bet. 52 or 500 town board meetings? No way. Candidly, I will never find my way around analytics — I’ve been learning fast as I can for 2 years and it’s still blurry. I can envision exciting marketing promotions like Better Schools Bonanza and Santa’s Wishlist, that hypercharge audience and community, but could I construct and execute them? Not on a bet.

    I understand how with an heroic effort you — and the few online community news publishers who have your brains, talents and fortitude — can carve out a decent living with a few sites. That’s sort of how I started in the community news business. I cannot for the life of me see how, with a small overhead, you can build an investment-worthy company that raises big dough to do big things. It would take too long — and the Internet lacks the patience that permitted the comparatively much slower growth of the newspaper business. Running a small community news company didn’t interest me; I’d been there, done that, selling my baby to Gannett in 1999. If this opportunity weren’t big, I’d have stayed on the beach.

    Maybe we can’t pull this off — but we’re pretty far along — within a few months of proving that we can be unit-profitable (we have three units so far — MSC Mass, MSC Westchester, and MSC Fairfield). Once we’re unit-profitable, we can propagate with confidence. Our new CEO is a brilliant proven digital entrepreneur who can get us to the next level. He will have 70 hours a week of work to do — and so will I — and so will the other 100-plus members of Main Street Connect’s team. We spend a lot of money but there’s not much fat here.

    The Batavian and Main Street Connect have different ways of looking at the world. I honor what you do. I wish you well. I am hoping we can coexist.

    It’s kind of nice this blizzard is keeping me indoors so we can find time for this conversation.

    Cheers, Carll

  17. Hey Denise, I’m glad there are thousands of folks making good money running community news sites. I’m a news guy — and if that’s true, great. My sense from my time working in this space is that the economics of stand-alone community sites are not that rosy. Many I’ve talked to found it to be grueling work for very modest pay. Congratulations on having cracked the nut.

    By the by, what’s your URL? I want to visit. Cheers, Carll

  18. Just a couple of things, Carll.

    “You tell me I could code.”

    I never said that. I said the opposite. With CMS development being what it is, there are free, off-the-shelf solutions that allow anybody to launch a local news site.

    “I cannot for the life of me see how, with a small overhead, you can build an investment-worthy company that raises big dough to do big things. ”

    Why does that matter?

    If the point is journalism, not just a get-quick-rich scheme, then you don’t set out to build a big company.

    Which brings us back to the original point of the post. None of the pioneers of newspapers started out with “scale” in their minds. They heard the word and wouldn’t fathom the concept. They wanted to serve their communities and be profitable doing it.

  19. Carll, This is Ben from The Sacramento Press.

    I have met Denise, I know the caliber of her operation – it is quite high – as are many others around the country.

    I’m not sure if you are challenging her or the entire community of indie publishers, but I assure you that one way or another more and more people are building authentically local solutions in their communities.

    The technologies that make these possible benefit from economies of scale and keep getting better. The revenue strategies we all test and use are being shared and developed so many of us have seen our revenue grow.

    I have been building technology in this arena since 2006 and working through the business model since 2004. Since then I have seen backfence come and go. Same with examiner.com. Same with US local news network And now with Patch…

    I have also seen more and more indies with stronger and stronger bottom lines. Attacking the burgeoning strength of these efforts seems out of touch.

  20. I hope that both can succeed because the public deserves it. At the same time, one won’t succeed if one fails to recognize the landscape of our industry.

    There are things that only work at scale, like a CMS. WordPress and Drupal work only at scale. This is true of CRM’s, ad networks, and social media platforms – and we all benefit from these amazing innovations.

    There are somethings that *might* scale like customer service, social media consulting and perhaps even call centers for advertising sales. But they also might be inefficient given the differences from community to community.

    Then there are pieces that have not yet scaled well – the big one is ownership. Local ownership has given us the most successful local online news sites to date. And not just Howard’s. I’m lucky to have met so many people who are doing wonderful work in and with their communities. And I’m luckier to be one of them.

  21. “My sense from my time working in this space is that the economics of stand-alone community sites are not that rosy.”

    That’s utter bull shit and you know it, Carll.

    Let’s face it, you started Main Street Connect because you want your own pocketbook to scale.

    Fine. Bravo. I’m a fellow capitalist and believe in wealth creation.

    My problem isn’t with the idea that you want to create wealth, but that you think the only way to do it is through “scale.”

    Comments like the above are just offensive as saying that use indies are all a bunch of “passionate hobbyists.”

    There’s all kinds of ways to make money in online news. It will take time to get there, but the revenue is assured. And for the local indies, we can do it without the outlandish overhead of a Patch or Main Street Connect. We don’t have to pay CEOs, for one thing. We don’t have to hire legions of engineers. We don’t have to have a central office in New York or Worchester County to support.

    In all this conversation, you keep ignoring the big flaw in your business model: Unsustainable and unnecessary expense.

    You hired a CEO? My God, what a waste of money. I can’t get over that.

    And to that the economics of stand-alone local sites argues against your own interests. If we can’t make money, you certainly can’t make money. If the revenue model isn’t there to support a stand-alone news operation, no company of scale will ever be able to support the overhead that goes with a CEO and CFO and COO and all of those technology experts.

    And if the revenue is there, then the independents, with their lower overhead are a much better bet (even for investors).

  22. The problem with chains that scale up is that eventually, revenues level off and shareholders begin to stamp their expensive shoes and expenses are cut in order to continue to provide profits to shareholders.

    I worked for ClearChannel, perhaps the best example of a company eating itself hollow as it continues to reduce expenses (read: people) while claiming that it will provide even better local news, information and entertainment.

    Bullwash.

    And there are numerous examples elsewhere in print and electronic journalism.

    The prime difference between Patch/MSC and indie publishers is this: The indie publisher never has to turn a profit. It just has to pay its employees, including the owner/operator/coder/writer/janitor, enough to make it worth the trouble.

    After 12 years, our publication, OswegoCountyToday.com, still has some debt to pay. But the only time we’ve ever earned less than $100K was our first year ($92K) and before the recession kicked us hard in the ass, we had three years over $200K. In a county with chronic high unemployment and a low standard of living.

    Not only can it be done this way, it should be done this way.

  23. The problem with chains that scale up is that eventually, revenues level off and shareholders begin to stamp their expensive shoes and expenses are cut in order to continue to provide profits to shareholders.

    I worked for ClearChannel, perhaps the best example of a company eating itself hollow as it continues to reduce expenses (read: people) while claiming that it will provide even better local news, information and entertainment.

    Bullwash.

    And there are numerous examples elsewhere in print and electronic journalism.

    The prime difference between Patch/MSC and indie publishers is this: The indie publisher never has to turn a profit. It just has to pay its employees, including the owner/operator/coder/writer/janitor, enough to make it worth the trouble.

    After 12 years, our publication, OswegoCountyToday.com, still has some debt to pay. But the only time we’ve ever earned less than $100K was our first year ($92K) and before the recession kicked us hard in the ass, we had three years over $200K. In a county with chronic high unemployment and a low standard of living.

    Not only can it be done this way, it should be done this way.

  24. So much is claimed about economics of “scale” – oh, if we have more locations, we can all share the costs of a (fill-in-the-blank). The thing that makes me sad about Patch, for example, is that many of those dedicated, passionate local journalists could and should be working their butts off for themselves. What are they getting for toiling for a chain? “Security” is an illusion. They could be cut at any moment and eventually will be. Meantime, as Howard eloquently puts it somewhere else in this discussion, every dollar that goes to that extra management layer is dollars taken away from the local community and resources they could use. And so far, watching from outside, all I’ve seen Patch management do is issue mandates further hampering the task. Moms, pets, whatever. Let the content direction bubble up from the local community and the editors’ decisions, not central TV-style “oh, it’s parenting news, we can sell that.” This is hard work, but it’s not hard. With WordPress, with a six-year-old out-of-the-box design, with no CEO, with no investors, with no analytics analysts, with no engineers, without pageview-boosting gimmicks like celebrity slideshows and breaking everything into multiple pages, with just a rock-bottom-basic blog-format site, we just “scaled” to our first one-million-pageview month. About half as many as Mr. Tucker’s entire 51-site network, per Quantcast.

  25. Pingback: Owens, Tucker Spar Over Indies’ Profitability | Street Fight

  26. Here’s another way to look at this….

    Those with some level of investment dollars to spend ( Main Street Connect, Patch, angels, venture firms, Broadcasters & Newspapers, etc ) should simply invest in, or acquire the best independents. Then, string together a regional powerhouse. ( sorta like a more financially powerful version of what Ben has successfully accomplished on a shoe string budget )

    Tim Armstrong from AOL went shopping for national sites to create a premium ‘portfolio’ (Huffington Post, Techcrunch, etc). Someone should do a local version of that.

    Carlllll, break out the check book.

    Sometimes it will certainly make more sense to offer stand-outs like Howard, Tracy & Ben a payout that they can’t ignore rather than building from scratch and competing against these entrenched incumbents.

    If you offer the best indies a minimum 20x multiple, I bet some will take the offer.

    Or maybe buy a 49% passive stake in these fast growing, online publishers.

    Mel Taylor
    http://www.MelTaylorMedia.com

  27. Wait – I just read this quote from Carll:

    “And I went online and there was not a single community news site that I would have characterized as being a satisfactory replacement for a great community newspaper, anywhere in the country. I couldn’t find a single one. I looked and looked and looked.”

    http://streetfightmag.com/2011/05/17/main-street-connects-tucker-hyperlocal-needs-scale/

    You know, that makes my blood boil because this is likely what Carll said to investors when pitching MSC. It shows either a willful ignorance of the indie publisher movement – including some very wonderful and, frankly, nationally recognized efforts – or a lack of due diligence that as an investor I would find appalling.

    The interesting thing if you read the rest of the interview is that Carll’s math looks correct to me:

    “… and [MSC] breaks even in 12 months and it repays its investment in 24 months.”

    I have built a similar business plan and a local site can reach break-even in 10 months with payback of initial investment around 2 years. However, for venture capital, this kind of return is never enough to justify the risks.

    In fact, I would argue that because there really isn’t any special proprietary system for generating significantly more revenue than an indie, MSC would be at a disadvantage against homegrown efforts that combine business models with the passion of entrepreneurs and deep community roots.

    The math works just as well for an indie, if not better. This is why authentically local community publishing does work for many in all sorts of different markets and it is why the movement continues to grow. Sharing our failures and successes only makes us stronger and forming a trade association takes us to another level.

    I know that I am sounding harsh here, but having read that quote above really does get me worked up. I’m sure it would anyone who has spent as much time and energy in this industry as I have. The comments Carll makes in this forum seem to be at best disingenuous if this is what he says to the media and investors.

  28. I started to write a comment to join in on this debate, but then when I stepped back for a second I realized that what I also enjoyed about this post and these comments is that I to get here I first had to scroll through a post with photos of a dog, some leaves, trees, a bird’s nest, some flowers, a pink flamingo, and pumpkins.. And I thought, ‘Quite a ride with only two blog posts.’ So instead I will just add ‘Bravo Howard’!

    For those of you who came to this post directly, here is a link to the post with the photos: http://howardowens.com/2011/10/30/first-roll-of-color-film/

  29. Realtors…yeah, that’s a tough one.

    “Hey, Mr. Realtor, would your client like a listing on our site, including pictures, video and all?”

    “Yes.”

    Wow. I’m blown away. Look at all that hard work of one non-engineer. Does that sound snotty? It should.

    Just because MSC spends much time, money, and energy creating a product portal that makes Realtors and advertisers feel like they are being served at the kitchen table, doesn’t mean they actually are.

    Organizations like Patch, MSC are like the local dinner buffet; Indie’s actually serve their audience while the biggies just throw the food on a big table in the middle and say “feed yourself.”

    We don’t need no stinking engineers!

    Rick Nelsen

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