What can local news publishers learn from other industries?

This week we turn to tech, retail, music and hospitality to find lessons for building sustainable local news businesses.

What are technologies or businesses that serve a geographically limited market?

One unique aspect of local news is that it serves communities with physical locations. We can look to the sharing economy to understand how technology can help businesses serve specific locations.

Many local news outlets lose out on efficiencies by re-creating proprietary online and mobile apps, while technology companies excel at building scalable products. For example, Lyft is a Bay Area-based ridesharing company. When Lyft scaled up, a central headquarters provided the technology that served field offices. The developers were at headquarters, while marketing and operations people staffed field offices to support local launches.

AirBnB, meanwhile, offers “Experiences.” Experience hosts take guests on tours, or to favorite restaurants, or offer lessons. Even if someone can’t rent their apartment, they can still create an experience and a new source of revenue for AirBnB.

“Our real goal here is to change your perspective on the world or at least this piece of the world. I think that is something worth paying a little bit more for,” said AirBnB cofounder, Nathan Blecharczyk. AirBnB is making a bet that people are willing to pay for meaningful experiences.

Local news outlets are also making that bet by offering roundtables, award shows, editorial meetings and other money-making events that relate to the community. One paper reports making between $500,000-$700,000 on events.

Another trend is publishers taking on “good neighbor” roles and providing in-depth news and hubs for local information. Like AirBnB they are providing a product differentiated by place.

The sharing economy companies are different from local news because the supply side can scale up based on demand. When SXSW comes to town, hosts in Austin add listings to take advantage of the sharp hike in visitors. Local news has a relatively fixed demand for services. Unless the city has a population boom, there is probably a fixed maximum-reader number.

Is there a way for content producers to go straight to readers and bypass publishers?

Etsy, the eBay of hand-crafted items, is flourishing, according to The Economist. Customers want to purchase items with stories. Sellers use the internet to connect with far-flung buyers. A two-way rating system ensures quality and the users police fraud. Small, loyal customer bases can support legacy products. Etsy charges $0.20 per listed item and takes a 3.5% cut of sales.

In an interview with Dr. Michal Kosinski, psychologist and data scientist at Stanford, he also sees the connection between retail and news. He said rating systems could police fake news and ensure quality. He also said local news will become more desirable and important to consumers as national and global information becomes easier to get. The online retail industry shows how digital technologies can bring together buyers and sellers to support boutique products, whether that’s handcrafted soaps or information about a specific topic.

Etsy and other online retailers also provide very personalized user experiences. Personalization helps connect shoppers to the kind of products they want to buy, and local news could also help readers have a better experience through personalization. Online retail benefits from harnessing the long-tail of products. Imagine what publishers could do if there was some kind of platform for information that offers a personalized experience — oh wait, that’s Facebook.

Still, local and small publishers need to find a way to own and optimize the user experience within their online or mobile apps. Digital technology offers ways to connect quality journalists directly to their readers. For example, there could be a local user-regulated news exchange that makes publishers unnecessary.

Navigating the platforms

Fandango recently announced it will sell movie tickets on Facebook in the news feed. “It’s not just about purchasing ease, it’s also about bringing along groups of people,” said Paul Yanover, Fandango’s president. A local news publisher could do something similar, selling stories or subscriptions seamlessly via Facebook.

Music streaming services such as Apple Music and Spotify helps listeners discover more artists through in-app recommendations. They also allow artists to deliver music directly to fans. Patreon, meanwhile, is an online platform that allows artists to ask fans directly for donations. But direct to consumer news sites have been slow to take off. Maybe it goes against the cultural norms of journalism to self-promote. Maybe it’s just too much work to be a reporter plus publisher, plus marketer.

Final thoughts

Local news should use scalable technology to connect writers to readers, and personalize reader experiences. Publishers should also focus on creating experiences and products that are unique and that people are willing to pay for, both online and offline.

The New York Times had a profile of a fine-dining chef, Daniel Patterson, who opened a healthy fast-food restaurant in Watts. I thought this story would be a lesson for local news because, even though they don’t use digital technology to deliver the product, a restaurant serves a local customer base. Watts has food deserts and many communities have news desserts. But, the restaurant, Locol, struggled because they were perceived as outsiders, according to the article, even though the owners tried to work with the community and hire local people. Maybe instead of coming in and trying a new restaurant, it would be better to support the efforts of local people who are already or aspire to be running restaurants or businesses.

The lesson for people on the coasts who care about news in the heartland is to support the people who are already there doing this work for their own communities.

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Next week, I’ll explore about crowdfunding. Follow me on Medium and join the conversation @jane_e_nevins. Sources? Click here.