Industry Insight: As Local News is Decentralized, Everyone’s an Entrepreneur

We’re in the midst of a massive decentralization of local journalism, and media and tech companies both large and small will have to adjust to be successful.

There are now just fewer than 1,300 daily newspapers in the U.S., down from about 1,800 in 1970, but that doesn’t tell the whole story of what’s happened to local news. More than half of newspaper jobs have disappeared over the last 15 years. The Denver Post recently announced that it would cut one-third of its already shrunken newsroom, while the San Jose Mercury News is down from more than 400 in the 1990s to 39 union journalists. Many chain-owned smaller-town daily newspapers have only one or two local news reporters left on staff.

The big newspaper chains of the past won’t be going back into these communities to restore the journalism jobs that have been cut. And attempts at building national, cookie-cutter, Patch-like local online news outlets have repeatedly run up against the reality that local news doesn’t scale in that way.

The future—and spottily, the present—lies in “authentically local” journalism, steered by people who live in the communities they are covering. The fix for local news will bubble up from the grassroots, with individual communities having to take responsibility for their own information needs.

Counterintuitively, this rapid decentralization is being driven, in part, by a big consolidation of the newspaper industry. That’s due to who is doing the consolidating. Stock investor-driven Gannett and hedge fund-owned GateHouse Media and Digital First Media are buying up independent and family-owned local newspapers, not with an eye toward long-term investment in the industry, but short-term profiteering from what is left of a dying business.

As the dust settles, local news ecosystems are emerging that will serve readers through a combination of local independent online news sites, nonprofit news organizations, public media, niche publications, local TV news, such as it is, and what’s left of daily newspapers.

Also feeding this decentralization of local news is readers’ internet-driven appetite for getting “everything about something.” Daily newspaper coverage that’s a mile wide and an inch deep won’t satisfy. People want depth and comprehensiveness on the individual interests they care about most. And amidst major turmoil in the advertising business, these niche enterprises hold the most promise in getting readers to pay for news.

Niche online news sites with a local layer are among the most fascinating stories in media today. Technical.ly, for example, covers tech news with separate sites in Philadelphia, Brooklyn, Delaware, Baltimore and Washington, D.C. Chalkbeat takes a similar approach to local education coverage. Sioux Falls Business covers local business news in Sioux Falls, S.D. Eco RI covers environmental issues in Rhode Island. DC Commute Times is covering transportation through the practical experiences of a daily commuter in the D.C. area. And there are state politics-focused sites all over the country.

Some communities will have a stronger local news ecosystem than others, based mostly on the success of local online news startups and the degree to which the local daily has been damaged by ownership.

One of the biggest challenges for local online news startups is seed funding. Most of the for-profit sites that have launched are bootstrapped with severance from being laid off from a newspaper job, or savings. Nonprofit sites have relied on foundations for seed funding, but as this becomes more of a solution all over the country, that’s not going to be an option for everyone.

Legacy media companies should have a huge advantage in that they have the capital to provide a runway for local news enterprises and experimentation. But even if they can get past a myopic focus on short-term profits at the expense of future growth, few companies seem to have mastered the ability to spawn entrepreneurship within a large organization. Bandwidth of local leadership has disappeared, as publishers now run multiple daily newspapers in vastly different markets, or even oversee entire states or regions. And rarely do product launches within a big local media company come with dedicated top-and bottom-line management, and importantly, dedicated local sales reps who aren’t also pitching a million other things.

Another consequence of decentralization is adjustments that will have to be made by tech companies, software-as-a-service vendors and online platforms that cater to publishers. If 1,300 daily newspapers are replaced by 10,000 smaller local online news outlets, it will upend how products serving publishers are designed, priced and sold.

Matt DeRienzo is executive director of LION Publishers, an organization that supports local independent online news publishers from across the country. He is a longtime former newspaper reporter, editor, publisher and corporate director of news.