Hope again for local news: Innovative start-ups find their feet

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After decades of decline, local news had been written off as a casualty of the digital age. But creator-led innovations in digital publishing tools and technology have made it easier for newer organisations to grow. Esther Kezia Thorpe rounds up the year in local news as part of our Media Moments 2022 report.

Cuts, layoffs and takeovers have been the theme of local news coverage for some years now. Big players like Alden Global Capital have taken over many once-thriving local news organisations, squeezing the last bits of profit out before gutting them. The term ‘news deserts’ has been used many times in the US to describe the increasingly large swathes of the country without reliable local news provision.

For many years, the outlook for the sector has been grim. But recently there have been vast numbers of start-ups springing up to fill the gaps. What has changed and how does this affect the future of local news?

Easier publishing tools and tech

The internet has been available to the public for decades and digital publishing has been an option for almost as long. But what has changed recently is the simplicity of the tools available. Where a publisher may once have needed back-end expertise to manage a website and a subscriber list, tools like Substack now exist to help start and monetise a brand with just a few clicks.

Many of the biggest local news success stories have been able to generate revenue from day one using plug-and-play tools. This means outlets can be run with just one or two people, rather than needing a team behind the scenes to keep it all going. Although this ‘minimum viable product’ approach isn’t sustainable in the long term for scaling and doing in-depth reporting, it has allowed many publications to get off the ground and get support straight away.

Newsletters have been a primary conduit for these new businesses. Some more well-known names like Axios Local and 6AM City have become synonymous with newsletters, and in both cases the businesses have created a blueprint that can be easily duplicated in other cities with even just a single reporter.

6AM City co-founder Ryan Heafy told Media Voices in March that they had reached 1 million newsletter subscribers across the 24 cities they covered, and were on track to exceed $10 million in revenue this year. That’s pretty good going for a 6 year old hyper-local business.

“We spent a lot of time in the first few years perfecting process: how do we do this? What does it look like? How can we scale and replicate this over and over again?,” Heafy explained to us.

Axios has similarly seen rapid growth this year with its Axios Local brands. Earlier in the year they surpassed 1 million unique newsletter subscribers across 24 cities, 10 of which launched in 2022. Each city has a two-person team, except Atlanta and D.C. which have three reporters each. Axios plans to grow the local teams “as the audience grows and revenue grows…rather than go in and hire really large teams and just burn through cash quicker.”

However they aren’t the only ones taking the low-tech approach. Downtown Albuquerque News (DAN), a hyperlocal newspaper created in 2019 in Albuquerque, New Mexico, US, covers a zone of about 30,000 people. They are 100% reader-funded, with no advertising or philanthropic funding. All stories are emailed once a week to some 500 subscribers paying around $10 a month, with nothing given away for free online.

“Why is our business model successful? It’s because it’s dead simple,” founder and editor Peter Rice told journalism.co.uk. 

There are so many similar start-ups like this appearing across the world. In the UK, a country where it is notoriously difficult to paywall local news content, one of the more successful examples is the Manchester Mill, which publishes through Substack. In November, it reached profitability ahead of its second birthday, boasting an email list of 27,000 people, 1,600 of which pay £7 a month.

Founder Joshi Herrmann has launched two sister titles off the back of its success; the Liverpool post and Sheffield Tribune, which are at 650 and 900 paying subscribers respectively.

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Listen: Chris Jansen, Head of Local News, Global Partnerships at Google joined us on the Media Voices Podcast to talk about the state of local news, and what local publishers need to do to become sustainable.

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Still challenges ahead

Of course, many of these start-ups face the same challenges as they become established; local news is far from being ‘saved’ yet. To cover an area effectively requires investment in reporters, and any deep dives or investigations are likely to be out of scope for some time yet. There are going to be important stories, especially in local government and politics, that publishers with one or two reporters in an area are going to be unable to cover.

But we’ve still come a long way in just a few years. And importantly, these outlets are getting back to what local news should be. The larger organisations fell into the trap of writing whatever would drive large enough volumes of traffic, from non-local stories to straight-up clickbait, which has degraded the quality of the audience. 

Press Gazette analysis in spring this year showed that most website traffic was non-local for the biggest UK regional news brands, for example Reach-owned Liverpool Echo has just 18% of its audience from the region. This is backed up by a quick glance at any well-known local news site, many of which feature stories designed to appeal to people wherever they may be. A good strategy for maximising digital ad revenue, but a very, very bad one for building a truly local audience.

The early green shoots are encouraging. As more local news start-ups find the path to profitability, that will in turn encourage media entrepreneurs around the world.