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Illustration: Annelise Capossela/Axios

Patch, the hyperlocal (and profitable) local digital news company, has built a new software platform called "Patch Labs" that lets local news reporters publish their own newsletters and websites, sources tell Axios.

Why it matters: It follows a growing trend of journalists going solo via newsletters at the national level.

  • "I'm able to pay my bills," says Tran Longmoore, founder of The Saline Post in Michigan, who's been using the platform since July. "I'm selling a fair number of ads considering the state of the economy right now."

Details: The software is currently being used by several local journalists cover small communities independently, as well as a few local newsrooms, like the Michigan Sun Times, that have migrated their businesses onto the platform to reduce costs.

  • One independent journalist in Warren County, Ohio, covers five different local communities using the software.

How it works: The software allows reporters to sell ads and subscriptions directly via the platform, and keep most of the revenue.

  • When reporters sell sponsorships, memberships or custom community calendars, sources say Patch takes a 3% - 10% cut, which is in-line or a little higher than what companies like Substack and Patreon take.
  • Longmoore says he was able to import his subscription list onto the platform, and has seen it grow significantly since joining. The Patch digital infrastructure makes his website more reader and subscriber friendly.
  • Reporters can sign up to use the tech for free. Patch approves the journalists and newsrooms that sign-up, and journalists must agree to a journalistic code of ethics to remain on the platform.
  • Journalists have separate URLs and branding that are unaffiliated with Patch. Journalists in the future will have an opportunity to cross-post articles to Patch.com's local news network.

Between the lines: The new product isn't meant to be a cash cow for Patch in the short-term, but long-term, it could help the company onboard many more local news sites and reporters to its platform.

  • Patch currently has 180 employees and will end this year as its 5th consecutive year being profitable, sources say. Several full-time engineers are working on the project internally.
  • Patch has a few journalists internally using the platform in Manhattan Beach, California, and Tuscaloosa, Alabama. Those writers must adhere to stricter editorial standards.

The big picture: More news companies are investing in newsletter businesses at the local level to help communities with declining newspapers.

  • 6AM City, a local newsletter company, will close a funding round prior to the end of the year, executives tell Axios. It's on pace to exceed 500,000 subscribers by end of Q2 2021. CEO Ryan Johnston says the company intends to expand from seven southeastern cities to 15+ cities across the U.S. next year.
  • Axios plans to launch local newsletters in several markets next year, starting with Minneapolis; Denver; Tampa, Fla.; and Des Moines, Iowa.
  • Substack has several local journalists and outlets using its platform, including the Charlotte Ledger, and The Mill, which covers the greater Manchester, UK area.

Go deeper

Newsletters are growing up and leaving the coop

Illustration: Annelise Capossela/Axios

After 10 months as a collection of newsletters created via Substack, the team behind the Everything Bundle is breaking out on its own with $600,000 in seed funding, its own content and newsletter software built in-house, and a refreshed brand as Every.

Why it matters: While services like Substack have made it easier than ever to start a personal newsletter and even generate income from paying subscribers, some authors are figuring out they need more than an internet connection and writing ideas to build out their business.

Scoop: Ex-CNN executive starts media venture for communities of color

S. Mitra Kalita (L) and Sara Lomax-Reese. Photo: Courtesy of S. Mitra Kalita

Former CNN executive S. Mitra Kalita and Philadelphia radio executive Sara Lomax-Reese have launched a newsletter seeking to expand local news on Black and brown communities to national audiences.

Why it matters: Some ethnic newspapers and local news sites focusing on people of color have suffered in recent years. The URL Media newsletter wants to bring their unique content together to attract big advertisers and facilitate underreported news.

Danger lurks in the Democrats' police talk

House Speaker Nancy Pelosi and House Democrats celebrate last June after they passed the George Floyd Policing Act. Photo: Ting Shen/Xinhua via Getty Images

As Congress forges ahead with police reform legislation, Democratic operatives are warning lawmakers to steer clear of any defund-the-police rhetoric since it could hurt them in the midterms.

Why it matters: President Biden and his fellow Democrats say Congress needs to pass the George Floyd Policing Act, which would ban chokeholds, prohibit no-knock warrants and generally make it easier to hold officers accountable for misconduct.