Inside Patch's new local newsletter platform

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.