Apr 21, 2020 - Economy

Local media outlets launch during the coronavirus pandemic

Illustration: Sarah Grillo/Axios

Local newsrooms have been hit hard by the crisis over the past month, but several are planning expansions that can provide a much-needed shot of optimism for the industry.

Driving the news: McClatchy plans to launch a new digital local news outlet called "The Longmont Leader" this spring, serving the residents of Longmont, Colorado, executives tell Axios. 6AM City, a local newsletter company, is planning expansions to new cities.

Details: McClatchy will be taking over all of the existing assets of the "Longmont Observer," a free, nonprofit, hyperlocal news website in the community currently run by local volunteers. The volunteer model of that website wasn't sustainable long-term.

  • The new outlet will be designed similarly to how McClatchy launched its first local newsroom in Youngstown, Ohio, six months ago with Google's funding.
  • McClatchy will hire 5 people to start. That includes one person for sales and revenue operations, along with two reporters, an editor and an assistant editor.

"We're in middle of global pandemic, and local news is more important need than ever," says Mandy Jenkins, general manager of The Compass Experiment. "We're just going to jump in and try to make a quick impact on the community."

  • Longmont has been ranked the top "boomer" town in America based on its recent GDP and population growth, but lacks a major news presence.
  • Jenkins concedes that some of the on-the-ground community outreach that the company leveraged to launch the outlet in Ohio will be much harder to do this time around in Longmont amid the pandemic, but says there's never been a better time to launch a new local news company.
  • "Right now is a time where people are very engaged with news," Jenkins adds.

Yes, but: McClatchy has had its own financial struggles throughout the pandemic and leading up to it.

  • The company is able to move forward with this project because Google is fully funding it. Google's Richard Gingras told Axios last year that Google is investing "many millions of dollars" on the partnership overall.
  • This is the second local newsroom McClatchy is launching through its Compass Experiment, a partnership between Google and McClatchy to launch 3 new, digital-only local news operations on multiple platforms.

6AM City, a local news company centered around newsletters, is planning a significant growth effort this year in markets across the southeast, its COO Ryan Heafy tells Axios.

  • The company is in final stages of talks to acquire several other local media brands, and is planning to launch a major outlet in Atlanta this year in partnership with a larger media company.
  • The company has 27 employees in 7 cities across 4 southeastern states. It has 25 million+ newsletters read with 215,000+ active newsletter subscribers.
  • Heafy says that the company is on track to meet its financial goals, despite the coronavirus pandemic, due to increasingly high demand. 6AM City has 250+ active advertisers, and expects to book roughly $3.5 million in revenue this year. Most of its revenue comes from selling custom branded content to advertisers across its local markets via its custom newsletters.

Other efforts to bolster local journalism are still underway. Report for America, an initiative of The GroundTruthProject that places emerging journalists into local newsrooms, will announce on Thursday a large new class of corps members that it will place into local newsrooms this upcoming year.

Be smart: There's some historical precedent for newsrooms launching during financial crises, with the most famous example being Henry Luce launching Fortune Magazine, one of the first serious business magazines, in 1930 during the early months of the Great Depression.

  • The upside is that the demand for news tends to increase in times of crisis, but the downside is that it's tough to sustain a business model for journalism when the economy is bad — ad money dries up and consumers get pickier about their wallets.

The big picture: The local news outlook in America and around the world is very grim, and analysts don't expect it to get better any time soon, despite a country-wide, bipartisan realization that the local news crisis is a major problem.

  • Tech giants and non-profits are throwing millions of dollars at the industry and lawmakers are pushing to fund relief efforts for local news. But on-the-ground work to build a local newsroom, even a digital one, is going to be extremely difficult.

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