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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

Jan 19, 2021 - Economy & Business

Exclusive: Forbes launches massive expansion of paid newsletters

Illustration: Sarah Grillo/Axios

Forbes is launching a newsletter platform that will allow journalists to launch their own paid newsletters and split the revenue with the 103-year-old publisher, executives tell Axios.

The big picture: Forbes will hire 20-30 writers with big followings to help get the platform up and running. It later plans to add some of its existing editorial verticals to the platform and make the offering available to its 2,800-person contributor network.

Updated 8 hours ago - World

Mexican President López Obrador tests positive for coronavirus

Mexico's President Andrés Manuel López Obrador during a press conference at National Palace in Mexico City, Mexico, on Wednesday. Photo: Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

Mexican President Andrés Manuel López Obrador announced Sunday evening that he's tested positive for COVID-19.

Driving the news: López Obrador tweeted that he has mild symptoms and is receiving medical treatment. "As always, I am optimistic," he added. "We will all move forward."

8 hours ago - Politics & Policy

Sarah Huckabee Sanders to run for governor of Arkansas

Sarah Huckabee Sanders at FOX News' studios in New York City in 2019. Photo: Steven Ferdman/Getty Images

Former White House press secretary Sarah Huckabee Sanders will announce Monday that she's running for governor of Arkansas.

The big picture: Sanders was touted as a contender after it was announced she was leaving the Trump administration in June 2019. Then-President Trump tweeted he hoped she would run for governor, adding "she would be fantastic." Sanders is "seen as leader in the polls" in the Republican state, notes the Washington Post's Josh Dawsey, who first reported the news.