Franchises Make Scale Profitable for TAPinto.net’s Two-State Network

TAPinto.net has taken its New Jersey-centered franchise model for community news to adjacent and competitive Westchester and Putnam Counties in New York State’s heavily suburban Lower Hudson Valley. In this Q&A, founder and CEO Mike Shapiro explains how he’s been able to scale his seven-year-old community network through franchising, and do it largely through self-financing. Answering questions, too, is Shapiro’s New York franchisee, Brett Freeman, founder and publisher of Halston Media.

Scale has been the big challenge for community news. It’s hard to do it and achieve editorial quality without homogenizing the news. How does your franchising model work at scale?
Mike Shapiro: TAPinto.net is a network of independently owned and operated online local newspapers. Each franchisee is responsible for its own original reporting but can also take advantage of our network of sites to publish original content from the other sites in our network. In many instances, our model creates a larger scale than even what the so-called large conglomerates possess at the local level. For example, we operate 15 hyperlocal TAPinto websites in Union County in suburban New Jersey alone. That represents 80 percent of the municipalities and 90 percent of the population. No other media organization can claim it has a network of over a dozen local reporters on such a scale. This network example is being repeated in New Jersey’s Somerset, Middlesex, Morris, and Essex Counties.

We also have editorial staff members behind the scenes who provide feedback to our franchisees about their content post-publication and help copyedit the content post-publication. This system enables our franchisees to be independent publishers while having editorial back office support from TAPinto to provide assistance as needed, which helps them achieve editorial quality without homogenizing the news.

How has your franchising experience led you to modify the model to make it work better with respect to editorial, advertising, and technology?
Shapiro: On the editorial side, we support each site as needed in terms of both news and sports coverage. Franchisees share content and ideas and support each other and the overall brand as well. The same can be said for advertising. Franchisees cross-sell advertising to businesses to help promote the businesses in not only their own but also surrounding towns. Our pricing structure provides for multiple town sales and promotion. We’ve also upgraded our technology to support and foster best practices in editorial and advertising.

In the four New York communities into which you’re expanding — Somers, Yorktown, and North Salem in Westchester and Mahopac in Putnam — you’re competing directly with the Daily Voice. What are your sites poised to do that Daily Voice doesn’t?
Brett Freeman: The Daily Voice doesn’t devote the resources to cover every town board and board of education meeting or send out photographers to cover all the local events. Its business model relies on press releases and linking to other stories. The franchise model ensures each town site is equipped with someone devoted to covering it properly so we maintain a genuine hyperlocal focus, sincerely dedicated to the communities we serve. The partnership with Halston Media, which has an existing newspaper staff, ensures even greater resources will be devoted to the towns TAPinto covers.

Halston Media has print papers in the four communities you’re entering. You’re adding a daily updated digital component to Halston’s weekly mailed paper. Are you using Halston’s editorial and other staff or are you adding personnel?
Freeman: Halston Media has been searching for a successful and easy-to-use digital model for the nearly six years it has been in business as a newspaper publishing company. Halston Media partnered with TAPinto so we can have a successful online presence and for the opportunity to continue to grow our business and expand into other media forms to better serve our existing readers as well as new readers who prefer to receive their news in a different format. In addition, as with any investment, diversity is the key to success, so we are happy to offer our advertisers the opportunity to diversify their investment in advertising, all under the Halston Media umbrella. We are not adding personnel; we can successfully leverage our existing staff because TAPinto is so user-friendly for those managing it.

What about advertising in the four communities? Do you expect to be adding to Halston’s existing client base?
Freeman: Print has been successful for an overwhelming number of our clients (we have a huge list of clients that have been with us every week for almost six years). That said, we have many clients that understand that successful marketing involves reaching potential customers across a variety of media. We wanted to offer them an additional channel in which to advertise. There is a very small percentage of prospective clients who have no interest in print. This will give us an additional opportunity to give those businesses a medium that works for them.

Your expansion to Westchester doesn’t include any major urban communities like White Plains and Yonkers, where both the Daily Voice and Gannett’s Journal News have established sites. Will you be avoiding those communities, with their strong, sizable markets?
Shapiro: TAPinto doesn’t avoid areas and believes competition is healthy as it creates a better end product for the reader. If people in these communities are interested in franchising a TAPinto site, we would welcome the opportunity to speak with them.

You used to have a two-site franchisee in Pennsylvania. What happened there?
Shapiro: The franchisee had personal financial issues unrelated to TAPinto and had to shut down its two operations.

Are you self-financing your expansion or do you have outside investors?
Shapiro: We are able to run TAPinto and continue to expand using our revenue.

Is TAPinto.net profitable?
Shapiro: Yes.

Of the communities TAPinto currently serves in suburban New Jersey plus the four you’re adding in Westchester and Putnam County in New York, how many are franchises and how many do you own?
Shapiro: Currently we have 44 franchised sites and two company-owned sites, covering more than 60 communities.

You share your expertise in community publishing with your franchisees. But how do you to spread yourself among 44 sites serving 60-some communities in three states? What’s your secret for being everywhere?
Shapiro: In addition to providing feedback to our franchisees about their writing, our managing editors and sports editors train franchisees on the editorial side and are the main contacts for content questions. Our social media staff members train our franchisees on social media and how to use the site and other programs we utilize and serve as the main contacts for questions on these topics. I train our franchisees on the sales side and am the main contact for sales questions. I also recruit prospective franchisees, engage in regional sales, and help market and promote TAPinto via public appearances and the like. Although we’ve had much success in expanding TAPinto through franchising, we have not yet been able to clone me, but I’m optimistic.

How far do you see TAPinto.net expanding? Could you go national?
Shapiro: TAPinto has proven itself to be a scalable, sustainable local journalism model. At the same time, there is a significant void in local news coverage in thousands of towns throughout the country. TAPinto can fill this void, providing a much-needed service to the community while creating entrepreneurial opportunities for many people throughout the U.S.

This interview has been edited for length and clarity.

Tom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.