Main Street Connect’s Tucker: Hyperlocal Needs Scale | Street Fight

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Main Street Connect’s Tucker: Hyperlocal Needs Scale

17 Comments 17 May 2011 by

A veteran in the community news business, Carll Tucker founded the community news company Trader Publications in 1981, built it up, and sold out to Gannett in 1999. Then, two years ago, he came to the conclusion that the community news model he’d been so successful at offline hadn’t really been replicated on the Web. And so he founded Main Street Connect, a small-but-growing (31 sites will launch in a single day on June 1) collection of community sites that began in Connecticut and soon will expand into Westchester, N.Y., and beyond.

Tucker spoke to Street Fight recently about the challenge of putting together a viable online local news chain, the importance of scaling hyperlocal, and why reporters need to live in the communities they cover.

How did Main Street Connect come about?
The question was: “If the future is going to be digital, why can’t every community in America have a community news site as good as the great community newspapers from the past?” It seemed so obvious to me and when I did the back-of-the-envelope math, so potentially profitable, that I said “Why isn’t somebody doing this?”

And I went online and there was not a single community news site that I would have characterized as being a satisfactory replacement for a great community newspaper, anywhere in the country. I couldn’t find a single one. I looked and looked and looked. There were the algorithmic sites, the scrapers — Examiner, Outside.in and AmericanTowns — which were essentially bulletin boards and were not creating a sense of community. They didn’t have [journalists] covering town boards, zoning boards, planning boards, sports, all the things you would expect to find in a community newspaper.

The newspaper sites were, in my experience, universally poor. And although I thought the idea up before I knew about Patch, when I encountered Patch I thought the sites were just terrible. And I still think they’re not much better, and I think that there’s all sorts of problems with their model which might even prevent them from ever achieving the goal of being a high-quality, profitable community news site.

One of the big problems that hyperlocal sites have had is that people haven’t been able to get ad revenue to the point where it supports full-time journalists.  How is your model different?
I’ll just give you the math: We started taking ads in June [2010]. We have sold 125 “Annual Visibility Packages” in Fairfield County at an average rate of $8,000 a year. So we are well on our way to demonstrating that.

I think you can only paradoxically create good community news if you’re prepared to invest in the creation of a national company, because the technology is very expensive for the first time, but it’s very cheap to replicate.

Our basic business unit is called a “pod” — think of roughly 250,000 covered population, although it could be 200, it could be 400. And we have one full-time employee per 10,000 population. Of those, half are full-time editorial. The rest are sales and marketing and a small amount administrative. So you have one full-time editorial person — and that means salary, benefits, a piece of the action — per 20,000 population.

In Fairfield County, 420,000 population, that’s 24 full time employees. In Westchester, where we expand on June 1st (opening 31 sites on that one day), that’s 750,000 population and that means about 30-some full-time editorial employees. So between the two of them we’ll have about 60 full-time editorial employees, and it breaks even in 12 months and it repays its investment in 24 months.

So if you can do that and provide a level of dependable, punctual, reliable community news coverage in an attractive package, then you just replicate that all over the country.

The difference between what we did and what Patch did, as I said at an industry conference when I announced the launch of these sites, it was very important to us to make sure before we mass produce the car that the wheels didn’t fall off. In other words, we wanted to make sure we could produce a high-quality, profitable, dependable model. And so we spent our first year in effect in the laboratory figuring out how to get it done.

What about your business model allows you to have sales people in every town like this? A lot of sites have found that that doesn’t work because the cost of getting an ad from a local business is too high.
There are a lot of passion or hobby sites that are around the country. Some of them are pretty good. I learned a lot from them. But none of them I could see, if you just did the math, were scalable into a real business. So even the best ones like Baristanet or WestportNow or MarketsofFairfield or WestSeattleblog — heroic endeavors by the proprietors to build these things — were undercapitalized.

And to build a really good CMS, which I think we’ve done (and obviously we continue to invest pretty heavily in that) is a big investment. You know, it’s many millions of dollars, and you can’t amortize that indefinitely over two or three sites. So the cost structure that we created — and Patch did the same thing — you amortize over a [large number] of sites.

I think you can only paradoxically create good community news if you’re prepared to invest in the creation of a national company, because the technology is very expensive for the first time, but it’s very cheap to replicate. And so you have to be prepared to spend what it takes to build a real quality product in the first place.

I get a $250 CPM because Luigi’s Pizza doesn’t care about eyeballs. Luigi’s Pizza cares about fannies in the seats. He cares about moving his pizzas. And he knows without any metrics what’s working and what’s not working.

When you say your “Annual Visibility Packages” offer a “rich mix” to advertisers, what do you mean?
It’s a new way of thinking about online communications in a community setting. And it’s intensely local. It’s the names and faces of neighbors, and our dominant metaphor is the ”digital town green.” So if you walk into a town green you see your neighbors. You hear the news. Your neighbor brings you food. You see shops. There can be some events. There might be a carnival. There might be a parade. But in any event it is a rich positive experience coming down to your digital town green. So we weren’t selling eyeballs. We have never priced this by eyeballs.

I remember I was sitting with the head of digital for one of the major national newspaper companies. And he said: “I love what you’re doing,” but there’s no way he can make it successful. And I said “Oh really?” And he said “Well my publication gets the highest CPM in the business.” And I said “What’s that?” He said it’s $50.

I said “actually, no, I get a $250 CPM because Luigi’s Pizza doesn’t care about eyeballs. Luigi’s Pizza cares about fannies in the seats. He cares about moving his pizzas. And he knows without any metrics what’s working and what’s not working.” So that’s the difference.

What’s the key to engaging readers on a hyperlocal level?
You really have to be serious about being a great community news site. You can’t just pop somebody into a place and say “go report the news.” You have to figure out what news readers want, and how to get it to them. And you have to have an organic connection to your community. You have to live there, or somebody has to live there, so you are in touch with the community.

This is the problem that I think that the newspaper companies have had with community news in general. And then they have a compounded problem when you get to community news online. It’s that they sent people who didn’t live in the community. They spelled the name of the mayor wrong. They didn’t go to Rotary. They didn’t go to Little League games. They weren’t invested in the community. And so they ended up vulnerable franchises.

So if you get it and you keep it, you can keep it forever, and you’re not likely to have competition because small towns don’t want two central media outlets. But if you screw it up, you can lose it in a hurry.

We have a local advisory board in every town. It’s a kind of pizza-and-beer, main street mom. It’s no big list. Our editors meet with them four times a year for lunch, and the local adviser writes a little neighbor notes column, which is essentially, uh, it’s like an alumni college notes you know. None of it’s real fancy, but the point is it’s an early warning system that says you know you’re messing up in this picture. You know you’ve gotten it wrong, and I’ve covered community news for so long, I know how easy it is to mess up in the community.

This interview has been edited for length and clarity.

  • http://www.davosnewbies.com lknobel

     A link to a MainStreet Connect site might have been helpful. 

    Looking at a few of the sites, I think they are doing a creditable job. But is it better than what we’re doing with Berkeleyside or what’s happening with Noozhawk in Santa Barbara? Not that I can see. 

    I think it’s insulting beyond belief for Tucker to refer to sites like ours and other bootstrapped, local entrepreneurial sites as “hobby sites”. How does he make that distinction. We’re doing journalism that is equal to or better than anything he is producing. We’re successfully selling advertising. We have deep community connections and resources. 

    We didn’t develop our own platform, but I think there’s a perfectly good debate to be held as to whether that’s truly necessary.  

    He may have a better way to make money, and I wish him luck. But that doesn’t mean that independent, local approaches are invalid. 

    • Keepin it real.

      Your last sentence says it all.  Your sites may be excellent and well trafficked, but how long can you go on if, you’re not making money, can’t invest in marketing and can’t attract enough advertisers before the “big boys’ with the real bucks come in and eat your lunch?

      There is a reason why McDonald’s has tens of thousands of stores and still growing – they own their market space and even if you have the best burgers on the planet , you’re still ever going to be able to compete with McD’s.

      I say don’t fight ‘em  Join ‘em!

       

      • http://www.davosnewbies.com lknobel

        First, we are making money. We’re a sustainable business. 

        Second, what advantage do the “big boys” have in our market? We know our local advertisers better than they do. We know our city and what’s relevant for news better than they do. The economies of scale that apply in a business like Wal-Mart or Starbucks have only the thinnest application to publishing on the web. 

        Third, McDonald’s is a very successful global business. Sure. But in my city, Berkeley, there are dozens of places that sell hamburgers successfully, including one McDonald’s. Are you suggesting that the McDonald’s model is the only sustainable model for a hamburger restaurant? 

        • Wow

          “I didn’t know about Patch.” Wow. That is just who I want starting my company. A person who has no clue what is going on in the industry they are launching a start-up in. I’m guessing the suckers you talked into backing this venture weren’t told about Patch before they wrote the checks.

          I will give you some credit though. Unlike Bernard Madoff your ponzie scheme is legal. In 3 years when you are relaxing in your armchair and your investors are SOL I hope you can sleep at night.

    • Keepin it real.

      Your last sentence says it all.  Your sites may be excellent and well trafficked, but how long can you go on if, you’re not making money, can’t invest in marketing and can’t attract enough advertisers before the “big boys’ with the real bucks come in and eat your lunch?

      There is a reason why McDonald’s has tens of thousands of stores and still growing – they own their market space and even if you have the best burgers on the planet , you’re still ever going to be able to compete with McD’s.

      I say don’t fight ‘em  Join ‘em!

       

    • http://flavors.me/andrewvazzano Andrew Vazzano

       http://mainstreetconnect.us

      Publishers of http://thedailynorwalk.com, among others.

  • http://profiles.google.com/westseattleblog WS Blog

     How condescending, “hobby/passion sites.” My business is a “real business,” as are the operations of dozens of our peers. Our communities know this and know the difference between us and the out-of-town pretenders who attempt to swoop in. The StreetFight writer here also has a factual error – fulltime journalists ARE being supported by grass-roots community sites. 

    Templatizing/commoditizing community coverage is the wrong way to go, no matter whether it’s this guy or AOL or DataSphere or who knows who’s going to try next. The mere slogan “national community-news company” says it all. Big companies running community/local news is what ruined the old media (and I’ve worked for the biggest of them – centralized control is anathema), and those of us who are running strong local businesses now will not let it ruin new media, at least not in our backyards. Our communities – which are full of passionate people running independent businesses, truly serving local residents – deserve better. – Tracy @ WSB

  • http://www.TucsonSentinel.com Dylan Smith

     If you’re going to condescend, you might as well attempt to be accurate. You didn’t build a CMS, Carll, you’re using Drupal. If you’ve spent “many millions of dollars” to build a small series of cookie-cutter sites—sprinkled with inline styles and extra divs—on a free platform, you really need to find a couple of developers who know what they’re doing.

    • amy

      The difference between custom work and hiring a developer to build a site on Drupal is a detail that eludes Tucker because he really doesn’t use the internet himself. This is a man who reminds his assistant to update his facebook status for him. How can someone succeed in a medium they don’t really use?

  • Art

    Carll, a friendly suggestion: take some of that dubious $250 CPM revenue and pay a halfway decent designer to produce a site that doesn’t look like dog vomit.

  • Art

    Carll, a friendly suggestion: take some of that dubious $250 CPM revenue and pay a halfway decent designer to produce a site that doesn’t look like dog vomit.

  • Nick Kedingai

     1.Carll Tucker has reporters from Pennsylvania, New Hampshire, Florida, New York and their editor is from Colorado. They cover Fairfield County, Conn. 

    2. Carll Tucker’s reporters constantly scrape content (from local newspapers) because they’re mandated to have 4 stories a day, seven days a week.

    3. Carll Tucker does not speak for small towns. “small towns don’t want two central media outlets.” Baloney. The more the merrier, everyone is better off because competition nurtures product improvement.
    4. A salable web site does not mean a good product (even if he has sold as many packages as he says, which is unlikely if you look at the sites). Sample headlines from Carll’s sites: “Ice Cream Melts on Weston Kids”, “Snow Flakes Stun New Canaanites Ready For Spring”, “Words Can’t Describe How Mundane These Stories Are”. Okay the last was made up, but you get the picture. 

    5. Their “Annual Visibility Packages” include “advertorials” written by reporters but appear with an ambiguous badge, nothing to tell the reader that the story was paid for. Hmm. 

    6. Too many “L”s in one’s name rouses suspicion in my book. 

    7. What really happen with Trader Publications, Carll? 

    8. Am I really making a list about this guy? Who is he again? Oh, he thought about a community news site before Patch. You know, I invented the Internet when I was 7, but nobody believes me. We’re in the same boat, Carll, I feel you.

    9. Expanding before becoming profitable is producing a car that will lose its wheels. 

    There is a place for community news on the web, but I hope it comes from the ground up, and not from someone claiming to be a “national community news company”.

    • Guest 2

       In addition to hiring “local” reporters from all over the map, a more telling statistic is the length of the list of “former employees.” At this burn rate, they may run out of reporters even before they run out of money.

  • DB

    Hobby sites?  That’s a pretty condescending attitude.

    There’s a key fact missing from this story:  How popular are the sites?  I plugged their sites into Compete.com (an imperfect measuring device, to be sure, but a reasonable indicator of relative strength).

    Their traffic is minuscule.

    However, in hindsight, there was a clue to this absence of traffic hidden in the article.  The owner says he sells fixed-rate sponsorship packages.  He also says he gets $250 per thousand.

    The only way both of these things are true is if the price is high and traffic is relatively low.

    Hubris can be fatal.

  • Fairfield County Resident

    I have been born, raised, and currently live in Fairfield County CT.  I get my local news from various places on the web — while newspaper sites have been lacking, I do check their headlines from time to time, and I utilize Patch and multiple ‘hobby’ sites on a regular basis.  All of these sites are run by local people who are very articulate and well in tune with the community.  Even though Patch was bought by AOL, there is no evidence of this on any of their sites, as they remain entirely locally run.  I have checked out a Mainstreet Connect site or two, and quite frankly, they were terrible.  Poor journalism, and it’s quite obvious that their ‘advertisers’ are paying for editorial space — I’m sorry, but NO CREDIBLE news source would reel in advertisers by promising them news stories.  There’s no quicker way to kill your brands attempt to be taken seriously as a legitimate news outlet.

    Bashing your competition publicly is a really bad idea from a company with zero track record of success or sustainability.  Looks like your strategy backfired on this one Tucker.

  • Guest

     All I have to say is wow tucker.  I have seen some of the metrics local advertisers have gotten from advertising on some of these sites and they are sad and pathetic.  I can imagine any of these sites get more than 5k UV’s a month which is terrible.  The advertorials basically ruin any chance at running a credible business.  Patch competes with Main street connect in all of its markets, and handily wipes the floor with them in terms of content and advertising dollars. If tucker was a smart man he would sell main street connect for what little money he could get and give it back to the investors….

  • Anonymous

    The conversation sparked by this interview surprised
    me. So many readers got so angry. I was just saying what I thought.

    A number of readers accused me of not telling the truth. Anybody who knows me
    knows I tell the truth. I’m not smart enough to keep track of lies.

    I wish independent community news sites could be made profitable in a majority of
    markets, the way community newspapers once were. I just don’t see how.
    Technology is expensive. Talent is expensive. Advertisers typically want to
    reach more than a single town. If independent community news site proprietors
    are making good dough, why aren’t they propagating, sharing their news prowess
    with neighbor towns? That’s what we’ll be doing with our profits – reinvest,
    reinvest, reinvest, so our products and processes get more and more excellent.

    I admire what I call passion or hobby sites. God bless their makers. I just don’t
    see any that make sufficient money to construct a durable business. There is no
    free press unless it’s a profitable press – that’s our mantra. Unless you earn
    enough to expand and invest in excellence, you’ll be trapped in a hand-to-mouth
    existence. Main Street Connect hopes to make enough money to pay lots of real
    journalists real wages, the way newspapers used to, and to expand throughout
    the country, reaching 6000 communities by the end of 2014. We share Patch’s
    aspiration. The big difference between our model and theirs is that ours makes
    money and theirs, based on published documents, is losing at a rate of $40MM a
    quarter.  

      Three days from now, Main Street Connect (mainstreetconnect.us), which launched its first site in March 2010, will be publishing 51 community news sites in three states, bringing news and information to 1.6 MM Americans. In most of the communities we serve, we will be the best community news source; in some of them, the only community news source. In a few of our communities, there are home-grown sites that are truly excellent. We may not compete well against them, but we will give readers in those towns a choice.

     Bringing good news to dozens of communities — and visibility opportunities to local
    businesses – seems an honorable activity, not an occasion for venomous sniping.
    Would the world be better off if Patch or Main Street Connect failed? If the
    Main Street Connect experiment continues to thrive, what harm are we doing? Don’t
    we all care about community news? If one of us finds a way to produce it
    profitably, shouldn’t we all celebrate?

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