The narrative that local news is dead is widely accepted in the media industry. The rise of digital advertising has cut off the main source of revenue for organisations that cover local news, leading to decades of cuts and managed decline at once-lucrative publications who have struggled to adapt.

But over the last few years, there have been glimmers of hope. Although there are still vast news deserts with no coverage, start-ups are springing up to fill gaps in some areas. Publications like Axios get a lot of publicity for their pledges to save local news via their bullet-pointed newsletters. However, there are many smaller publishers which get far less attention, but which are well on the way to making the business side of local news work for them.

In this special podumentary episode of Media Voices, Esther Thorpe talks to four of the participants of the most recent Google News Initiative Startups Lab: Borderless, Santa Cruz Local, the San Jose Spotlight, and The Mendocino Voice. They discuss what drove them to start their publication, what business models they’re choosing to use, and some of the challenges they’ve faced launching a media business.

The start-ups:

Nissa Rhee, co-founder of Borderless
Borderless serves the immigrant communities of the Chicago area with much-needed information and hires and trains freelance immigrant journalists to share those stories. Nissa and co-founder Michelle Kanaar created the Immigration Reporting Lab to teach other news organizations how to accurately and humanely report on immigrants and undocumented people.

Kara Meyberg Guzman, CEO and co-founder of Santa Cruz Local
Prior to launching Santa Cruz Local, Kara Meyberg Guzman served as the Santa Cruz Sentinel’s managing editor – the first woman and first person of colour to hold the newspaper’s top editor position. During the 2020 elections, she produced local election guides in English and Spanish guided by input by more than 600 community members. SCL’s podcasts focusing on local government have become popular with millennials in Santa Cruz – more than 700 of them now support SCL with a paid membership! Kara sold her car in 2019 and used the proceeds to launch Santa Cruz Local.

Ramona Giwargis and Josh Barousse, founders of San Jose Spotlight
Ramona Giwargis and Josh Barousse are a husband-wife duo who successfully grew their local news start-up while also giving birth to a baby during the pandemic. San Jose Spotlight is San Jose’s first nonprofit newsroom and is rivalling major legacy media operations in the area in terms of their audience growth (fuelled by COVID-19 reporting). They’ve hired reporters who speak Spanish and Vietnamese to deliberately serve the various ethnic communities in the area

Kate Maxwell, co-founder of The Mendocino Voice
Kate Maxwell and Adrian Fernandez Baumann are founders of the rural news outlet specializing in providing breaking and on-the-ground forest fire coverage to Mendocino residents during fire season and in communicating urgent information to Spanish-speaking residents (When they launched in 2017, county emergency info had never been translated into Spanish). Kate is a 2020 JSK fellow at Stanford, and has worked as a reporter for several local newspapers and radio stations. Baumann and Maxwell are piloting innovative models for rural journalism outlets, including experimenting with a cooperative business model and building a program to help train Spanish-speaking residents to document public meetings.

Thanks also to Conor Crowley from the Google News Initiative for joining us.

The full transcript is live here, or see below for some highlights:

Common challenges for start-up founders

Conor: Most of the founders who start something up, they are journalists by trade themselves, so they bring a really solid editorial skill set. And they know what good reporting looks like, they have a pretty clear idea of who their audience is, or will be. They’re good at doing the community outreach, to build engagement with the community. They’ve got all of that already.

But they’re typically not as strong when it comes to building out a business and putting in place the operational backbone of when you’re trying to grow and scale something up. There’s a lot of jobs to be done when you’re running any business. And they might be less interesting than the reporting; things like budgeting, fundraising, hiring, etc. But unless you do them and do them well, then you’re going to find yourself in trouble before too long. And you can forget about scaling beyond a certain point. So there’s an element there of building the plane while flying it.

The impact of the pandemic on these fledgling ventures

Ramona: We did lose some donations. But I will say in many ways, the pandemic was also good for for local news, because we saw a huge spike in readership, people turning to the San Jose Spotlight, people discovering us for the first time because we were providing life saving information. How to get a test? What are the symptoms of COVID? How do I get a vaccine? When is it my turn?

These basic things that the world was trying to figure out together, we were on the frontlines of that. And we were really giving people that education that could save their life. So we saw a huge spike in readers and in turn donations as well as people turn to us during that time.

Josh: Actually, in fact, at the end of 2020, we nearly doubled our revenue from 2019 to 2020, solely because of what Ramona just alluded to that, folks are just so unaware of what was going on. They were turning to us to give them the information they needed to navigate their way through the pandemic. And in turn they wanted to keep this journalism going. So they all pitched in.

Encouraging donations but keeping journalism free

Nissa: Borderless is committed to not having a paywall and having this information accessible, because I think that’s part of the reason we started is the lack of accessibility to some of this information. And so that that remains important to us. So as long as we do that, that means we know we rely on donations and and other things to keep us going.

Kate: We really wanted to make sure that our coverage was not necessarily limited by certain financial interests. So we don’t have a paywall at all, and that’s really important to us. But we did launch a membership programme within the first couple of months of starting. And so at this point, we have about 1,000 members in a county of maybe 90,000 people who give us recurring donations just to support our work.

Part of our plan is to be able to offer them increasing ways to participate, whether or not it’s in these info need surveys, or around participatory budgeting, really making sure that we’re accountable and transparent to our members and readers.

The importance of a mixed revenue model

Kara: I think our model will always include a mix of membership grants, and philanthropic gifts from individual donors. Our monthly recurring revenue, the revenue that we can count on each month, which all comes from memberships, that covers about 60% of our staff costs. We want to get to a point where our monthly recurring revenue covers our monthly recurring expenses, which is basically our payroll.

So essentially, about doubling, really growing our membership revenue. We have about 700 members right now, and our next milestone is when we can double the amount of revenue coming from that.

Kate: We have a pretty healthy mix of advertising and sponsorship. And we’ve also gotten some grants. So we limit our advertising to local businesses who are purchasing by the week, and we also have sponsorship programmes for specific sections. That means that we can make sure we are not driving our reporting solely based on clicks, and that we’re really providing a way for local businesses to reach a dedicated local audience who values and trusts our local news and also trust supporting local businesses, of which we are one.

That really means we can build a sustainable budget based on the local businesses here that want to support the work that we’re doing.

Spotting opportunities in the market

Nissa: When we’re talking about these big news outlets, most people covering immigration in the United States today do not have connections to immigration, they aren’t immigrants themselves, they don’t have immigrant backgrounds. And so they’re coming in with their own perspectives. And we don’t see that sort of investment by news outlets in having long term beat reporters covering immigration.

Ramona: There’s a hedge fund called Digital First Media, and it’s owned by a group called Alden [Global] Capital. And essentially what happens is they buy these newspapers across the country, gut the newsrooms and squeeze them for profit and lay off reporters.

I worked at the Mercury News for three years covering politics and government. And during that time, we saw multiple rounds of layoffs; Pulitzer Prize-winning journalists who were forced to leave the newsroom, take buyouts.

Kara: We’ve just seen [The Santa Cruz Sentinel’s] staff shrink and their coverage of civic news, local government news, the kind of news that you used to depend on the local paper for, it’s just not as reliable as it once was in its heyday, nor as comprehensive as it used to be.

We just saw a really wide gap there. There are other local news organisations in our county, but no one was really covering that local government beat really comprehensively.

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