In Push to Profitability, Patch Trims Staff and Promotes Kalin to CEO
AOL’s Patch network of community news sites made significant staff cuts on Friday among its regional news teams and promoted Steven Kalin to CEO, in what looks to be its biggest move yet toward reaching its long-promised goal of profitability by the end of 2013.
The action comes after the network, which serves nearly 900 communities in 23 states from coast to coast, failed to hit its advertising revenue target of $40 million-$50 million in 2012 and amid persistent industry questions about Patch’s viability.
AOL CEO Tim Armstrong, who helped co-found Patch in 2007 before joining AOL (and brought it into the company’s family of sites in 2009), said in a memo to staff on Friday (first published on JimRomenesko.com):
“The changes have two main goals:
“1. Improve and increase our hyper-local programming and deepen our user engagement through the Patch 2.0 platform; and
“2. Implement a structure that unlocks the path to profitability.”
Kara Swisher at All Things D reported that just under 3% of Patch’s staff of 1,400 will be let go. In his memo, Armstrong said the network’s 20 regional teams were being narrowed to nine, but that the number of sites would remain the same.
Layoffs aren’t new at Patch; they started last year as the company, after reportedly losing nearly $150 million in 2011, began consolidating some sites and cutting back on contract writers and freelancers.
Kalin, who was previously president and COO, replaces the site’s co-founder Jon Brod at the top of the company’s org chart. In his memo, Armstrong said Brod would shift his focus back to AOL Ventures, where he “will lead our push into several areas we have identified as significant future growth opportunities for AOL.”
Armstrong also announced two other appointments that indicate Patch will be more centrally controlled as it rolls out a relaunch of its sites to focus more on community conversation and social interactions. The new model was introduced in five test markets in Long Island in the last quarter of 2012 (and is now being rolled out to other markets).
Anthony Duignan-Cabrera has been promoted to VP, editorial director, overseeing day-to-day editorial field operations and reporting to Rachel Fedderson, who was appointed chief content officer last year. Duignan-Cabrera, who has extensive hands-on editorial experience down to the reporter level, was promoted from editorial director of Patch’s Eastern territory, where he was in charge of “editorial hiring, content strategy and advertising solutions for the growing number of Patch.com sites…managing more than 550 regional and local editors from New Hampshire to Florida.” He was also national engagement director.
In another promotion, Katie O’Connor, associate editor of Patch’s Northeast sites, was named director of editorial operations and content strategy, where, Armstrong said, “she will work with our editorial teams to help create new content and programming.” Like Duignan-Cabrera, O’Connor has a lot of hands-on experience in hyperlocal. Before joining Patch in November 2009, she spent nearly a decade as reporter and editor at Gannett’s Journal News in Westchester County above New York City.
In September 2012, Patch adopted what co-founder Warren Webster called a “four-way” strategy to remake the service into “community hubs.” Up to that point, sites were largely controlled by the local editor — “LE” in Patch lexicon — in a model that was basically ported over from traditional print weeklies. In the new strategy, which Webster sketched out at the Street Fight Summit in January 2013, the company sought to “have a four-way conversation: not just journalist to user, but user to journalist, user to user, user to business, and business to business.”
Not long after Patch implemented the strategy at five sites in Long Island, Hurricane Sandy hammered coastal New York and New Jersey. The emergency showed how Patch sites could indeed expand the community conversation as Webster envisioned. Users at the 400 sites that covered Sandy uploaded 7,000 photos and videos of the devastation. Largely as a result of what it achieved with its Sandy coverage, Patch saw traffic jump to 13 million unique visitors per month by the end of 2012, a 30% increase over the previous year. But Patch has had trouble extending the intense level of user engagement achieved during Sandy to coverage during other, more normal news periods.
In describing the new “community hub” strategy that de-emphasizes the local editor, Fedderson told Street Fight last September that Patch will still feature “hard news — journalism with a capital ‘J’ that only an editor can create.” Presumably, newly promoted editors Duignan-Cabrera and O’Connor will work with sites on achieving balance with the “four-way conversation.”
Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.