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Home > Publications > Quill > What the Patch?


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Thursday, December 2, 2010
What the Patch?

Local online news startups are boosting journalism employment when the jobs are certainly needed. Is it a fleeting trend?

By Laura Houston Santhanam

Layoffs, buyouts and bleeding attrition swept through newsrooms in 2009, gutting the local coverage on which communities had come to rely.

As the dust settles and job openings slowly crop up, hyperlocal community news websites appear to hold the media industry’s promise, and don’t think established media outlets failed to notice. The parlor question of the moment is: Is this a costly fad, or is hyperlocal community news a sustainable enterprise?

Yahoo News, Newsday, MSN with NBC Local Media and Hearst Television are just a few traditional and new media entities hiring personnel and shifting resources to fill the news niche that had been left to grassroots community bloggers. Among these established media steps into hyperlocal news, AOL Inc.’s Patch.com emerges as one of the largest, boldest, most well-coordinated attempts yet by an established media company to serve up hyperlocal news markets (and attract local advertisers) on an increasingly national scale.

Earlier this year, AOL’s Patch blitzed the media job market when it pitched $50 million to hire journalists to cover neighborhood news in communities no larger than 75,000 people, and already the company touts the ability to offer more full-time journalist jobs than anyone else in 2010.

“A lot of people who used to do a lot of job fairs have hit a new lower level, and they’re just trying to maintain that lower level." - Joe Grimm, journalism recruiter

Longtime journalism job recruiter Joe Grimm thinks more local news coverage is part of the answer for journalism’s long-term stability and growth.

“It’s interesting and exciting that somebody wants to spend $50 million hiring journalists,” Grimm said, saying he hasn’t seen an appetite among many traditional media outlets for hiring en masse.

“A lot of people who used to do a lot of job fairs have hit a new lower level, and they’re just trying to maintain that lower level,” he said.

These industry changes are permanent, Grimm said. After leaving the Detroit Free Press in 2008 with a buyout and more than 32 years of experience that included recruiting journalists and editing, Grimm committed himself to assist during the “historic reinvention of journalism,” he wrote in a column that ran on the Poynter Institute’s website.

Grimm continues to write Poynter.org’s “Ask the Recruiter” column, teaches journalism and works as a contract recruiter for Patch.

While he says he feels good about journalism, Grimm admits he is not certain where it is going.

“I can hardly imagine what journalism will look like in 20 years,” he said.

FOUR CONCERNS

Veteran newspaper editor and Silicon Valley businessman Alan Mutter is not convinced the news business will be saved by the grace of hyperlocal online news coverage.

“The problem with all this is it’s not efficient to hire, maintain and supervise work staff,” Mutter said. “It’s not, ‘Consumers wouldn’t be interested,’ but ‘How could we get (news) to them in an efficient way?’”

Concerns surface about hyperlocal online coverage -- whether it’s produced by Patch or a grass-roots community blogger -- in four areas, Mutter said. Generating high-quality, original content, building an audience, monetizing with advertising sales and making a profit formed pillars of a sustainable business model that has not been seen in this area of journalism, he said.

“These things start out losing a lot of money. It’s going to take a long time to attract a big enough audience and see whether or not advertisers are going to pay.” - Alan Mutter, news industry analyst

Patch and hyperlocal websites spun off from media companies can afford to experiment because “they have the money and resources from more established business operations that can underwrite these efforts and can fund them while they figure out what works,” Mutter said.

By contrast, independent community news websites that compete with Patch in a growing number of cities nationwide often have little to no sustainable revenue from advertisers, grants or donors. Community passion generally fuels independent website coverage, often without pay, and it is common that absence of revenue and compensation end with websites going dark.

“These things start out losing a lot of money,” Mutter said. “It’s going to take a long time to attract a big enough audience and see whether or not advertisers are going to pay.”

Advertising and audience are where Patch develops its edge.

“They’re going to try to drive traffic there by having all the people going through the AOL front door,” Mutter said. “Yahoo and NBC are trying to do the same.”

While users may recognize AOL and find Patch in the process, national and regional advertisers also will know Patch through its AOL connection.

That is what Patch President Warren Webster is banking on.

Webster came to Patch in 2007, and AOL bought the network of community websites two years later.

“We’re making a big investment to build that infrastructure,” Webster said. “The next phase is bringing in the local business community.”

More than 250 websites were set up this year in 16 states and the District of Columbia, and plans are in place to hire a total of nearly 800 salaried, full-time local editors to run 500 websites by Dec. 31, Webster said.

“Few people speak loudly about workloads. It’s not for everyone, and it requires real passion for the community.” - Warren Webster, president, Patch.com

Three-quarters of the editors on staff receive pay that was equal to or better than what they received at previous jobs, Webster said. Many came to Patch with newspaper or broadcast backgrounds, and the Patch staff have an average of nine years of journalism experience per employee. Meanwhile, each Patch website operates printing-press free on 4.1 percent of the operating costs required on average to run a comparable, competing, traditional newspaper, Webster said.

“IT’S NOT FOR EVERYONE”

Media reports about Patch sometimes focus on employee complaints of long hours from their home with little support. Webster defended the company, saying that internally, employees have compared Patch operations to those found at a small community newspaper.

“Few people speak loudly about workloads,” Webster said. “It’s not for everyone, and it requires real passion for the community.”

Based on the number of unique visitors, how often they visit and the percentage of a Patch community’s population, Webster says Patch has already shown itself to be successful.

“We’re 100 percent confident in our business model,” he said.

While he did not provide exact numbers from Patch’s metrics of success, Webster said Patch’s website goal is to be the local source for news and information.

“We don’t ever expect that Maplewood, N.J., will ever have millions of people coming to the site. That’s not what it’s about,” Webster said.

Each site promises to deliver news coverage and information that is “professional, passionate, energetic and totally local” to communities of 15,000 to 75,000 people — a service that many traditional newsrooms simply can no longer afford to offer.

Patch’s criteria for picking a community, however, is not so simple as selecting places that other outlets neglect.

Before hiring a work-from-home local editor for a given community, Patch runs a “depth check” to determine whether a community’s residents and businesses are ripe for reporting.

This process involves a 59-point algorithm that weighs a community’s demographic traits, including public high school rank, to prioritize places that might be most ready to receive Patch. Other factors that help determine the next Patch community include business community strength and the level of resident engagement in local politics.

Legacy media outlets dabbling in hyperlocal news is not a new idea, just one that mostly has fallen flat in past attempts, said American University’s J-Lab Executive Director Jan Schaffer.

Schaffer sees Patch as “the first behemoth effort” to deliver hyperlocal news coverage “in a very systematic way.” However, based on J-Lab’s years of monitoring community news website successes and failures, she said several unknowns prevent her from offering a forecast of what’s to come for commercial efforts to capitalize on the hyperlocal news niche.

“What we don’t know is how many sites created this year will be around two years from now,” Schaffer said. “Patch could be a very credible source, or Patch could put credible sources out of business. We just don’t know.”

Within two years, Schaffer said, people will have a better sense of the style and substance of hyperlocal websites and the media companies backing them.

J-Lab’s recent report “New Voices: What Works” assessed best practices gleaned from several community news websites over time across the United States. The key findings emphasized the need for community engagement, passion for local issues and original content. Also, and perhaps more importantly, the report bluntly stated that, “Community news sites are not businesses yet.”

That may be where established media websites such as Patch find advantage. The report points out that Patch “offers a templated website, pays a salaried editor, and networks regional and national advertising,” a decided advantage over community start-ups largely running on entrepreneurial passion, crowdfunding, donations and grants.

Given the hardship associated with starting, sustaining and making a living as a journalist for a grassroots community news website, Schaffer suspects that some independent editors will turn to entities such as Patch for work.

OaklandLocal.com Editor and Publisher Susan Mernit knows how tough it can be to start, fund, staff and edit a community news website from scratch. That’s what she did more than a year ago when she started her community website that investigates social justice issues in Oakland, Calif.

While Oakland does not have a Patch website or one in the works, according to the main Patch website, Mernit’s concerns about corporate-supported websites competing against grass-roots endeavors is that the smaller operations tend to get lost in the shadow of bigger websites.

“It’s important to assign value to both,” Mernit said.

While established media outlets choose whether to pursue hyperlocal online news, McClatchy Co. recruiter and former SPJ President Reginald Stuart said, “We are looking mostly at what the hyperlocal upstarts are doing.”

He said that several community news websites now capitalize on the lost coverage once offered in areas that newspapers dominated but were forced to retreat from due to the recession.

“The economy’s not back yet for traditional media,” Stuart said.

CONCERNS OVER GRADUATE EMPLOYMENT

Entry-level journalists revealed a deep and abiding concern about what lies ahead for their careers when asked for the 2009 Annual Survey of Journalism & Mass Communications Graduates, a survey that began in 1986 and is conducted through the University of Georgia’s James M. Cox Jr. Center for International Mass Communication Training and Research.

“If I were betting, I would bet on (hyperlocal news sites) rather than betting on the existing media companies adapting.” - Lee Becker, University of Georgia

Slightly more than half of journalism and communications graduates, or 55.5 percent of respondents, reported having full-time employment in 2009, the lowest rate seen since the survey started. (Read the 2009 and past survey results.)

Professor Lee Becker directs the survey, partially funded by the Sigma Delta Chi Foundation, and said that while the job market has been bleak, “our students will see a recovery before seasoned journalists do.”

It’s not news that entry-level employees tend to be cheaper to hire than their more experienced colleagues. With news outlets dipping their toes into new media ventures like hyperlocal online news, Becker suggested that projects will be undertaken as cheaply as possible.

“When CNN started up, it did exactly that,” he said.

An increasing number of journalism graduates are taking up jobs with online news start-ups and hyperlocal entities, especially as traditional media jobs wither away. The impact of newsroom cutbacks left a gaping hole in coverage that communities still wanted, and traditional media staffs stretched thin often could not help but offer less coverage than they once did.

“You can’t do as good a job covering three counties as you could doing one,” Becker said.

Time will tell whether hyperlocal community news websites will revive the journalism industry after newsrooms endured wounding years of slashing jobs and cutting costs, Becker said.

“If I were betting, I would bet on them rather than betting on the existing media companies adapting.”

Laura Houston Santhanam is a former newspaper reporter from Mississippi who now analyzes news coverage for Pew Research Center’s Project for Excellence in Journalism in Washington, D.C. E-mail her at lsanthanam@journalism.org.

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