‘Indie’ Pureplays Capitalize on Newspaper Turmoil in Big SoCal Markets

While local newspapers keep struggling to find a balance between their shrinking print base and the under-achieving potential of their digital platforms, independent news pureplays sometimes find their niche virtually under the feet of their much-bigger competitors. This is especially true in large metro markets, where audience loyalty either doesn’t exist or is tested by paywalls that the dailies impose and the pureplays avoid.

Chris Jennewein has worked on both sides of this competition in a 37-year career. Now, as founder of the independent pureplays Times of San Diego and My News LA, he’s going up against Tribune Publishing, owner of the San Diego Union-Tribune and the Los Angeles Times, both once-reigning print dailies that are trying to make a comeback in the crowded digital space.

In this Q & A — coming two years after he launched Times of San Diego — Jennewein details how his operations are doing in two markets whose combined potential audiences include 20 million people:

The big news in metro L.A. is that one of your competitors who is not part of Tribune Publishing, the Orange County Register, has been acquired by Digital First Media, which pledges to reinvigorate that formerly bankrupt print-digital operation. Do you see any appreciable impact to your still-fledgling MyNewsLA.com?
Newspapers have always had an enormous opportunity to build digital businesses. But print always seems to take priority. If Digital First makes a true commitment to digital, we’ll have to invest more in Orange County coverage.

You started My News LA last year. What are you doing in traffic and in advertising? What’s your desktop/mobile breakdown?
MyNewsLA.com has grown rapidly. It’s now averaging well over 100,000 unique visitors a week. The total for February was just under 500,000 uniques. Because of Hollywood news, the site works very well for national advertisers and over 80% is network/national with the remainder primarily regional. In February, smartphones accounted for 60% of sessions, followed by desktops at 30.5% and tablets at 9.5%.

What about nontraditional revenue streams – how are you doing in that area, both in LA and San Diego?
We’ve added a limited amount of sponsored content on both sites. It’s doing well, and we may expand. The biggest change in advertising is a new partnership with LiveIntent for both sites’ daily email newsletters.

What does your partnership with LiveIntent bring to your operations?
Monetizing our newsletters is a long-term strategic goal, and LiveIntent has the best network platform for that. We also sell local newsletter ads, but the national exposure through LiveIntent is very important.

How have you adjusted your news model in L.A., including in reaction to what Tribune Publishing is doing with the Times?
We’ve beefed up weekend coverage, added coverage of key state news and established a celebrity beat that focuses on news both in and outside of Hollywood.

You leverage non-staff resources in LA, like the City News Service. How big is your LA editorial staff, and what does it focus on in coverage, both geographically and by news category?
The LA staff consists of one full-time employee and three contract editors. I’m also heavily involved, as are several of the investors. In addition to City News Service — which everybody uses in Southern California — we can tap Reuters for state news and have great relationships with government PIOs, universities, the public relations community and the military.

You launched your Times of San Diego when your main competition, the Union-Tribune, was struggling mightily. Since then, it’s been acquired by Tribune Publishing. Has the U-T stabilized and is it a greater threat? How are you responding?
We’ll never have every story that a large newspaper, even a downsized one, can publish. But we strive to cover the essential news faster than our competitors and without the barrier of a paywall. A San Diego City Councilman told me several weeks ago that it was his impression that Times of San Diego is usually first with key news.

Quantcast has U-T uniques at 326,600 monthly — well above what they we’re doing a year ago, Is the less-porous paywall that Tribune Publishing brought to U-T paying off?
The U-T audience is actually down from a high of well over 1 million monthly uniques a number of years ago [before the paywall that came when Tribune Publishing acquired the paper].. Last April, when the Tribune purchase was underway, the newspaper site’s primary domain was changed from U-TSanDiego.com to the current SanDiegoUnionTribune.com, causing a gap in Quantcast’s data. Times of San Diego’s audience is now about half the U-T’s, which I feel very good about after just two years of publication.

Your major pureplay competition is the 11-year-old, nonprofit Voice of San Diego, which focuses on in-depth news. Is The Voice a barrier to your growth in the San Diego market?
The Voice does a great job, but is really not a competitor for daily news. They’re focused on more analytical, magazine-like coverage of government, education and development, posting a several in-depth stories daily. We’re focused on breaking news across a wide spectrum of topics. A good example is our coverage last week of Bernie Sanders’ first rally in San Diego, easily the most popular single article of the week. Voice didn’t cover it, but I expect them to thoroughly analyze the race from a San Diego perspective.

What’s your traffic in San Diego, compared to last year? What’s the desktop/mobile breakdown?
Times of San Diego finished its second year of operation earlier this month with 1.9 million unique users, up from 1.5 million in the first year. Monthly uniques are close to 200,000. Mobile use is less than in Los Angeles at 46% in February, with desktop at 44% and tablets at 10%.

What’s happening to local digital news that’s new – that you didn’t have to cope with when you started the Times of San Diego – and how are you recalibrating, editorially and in sales?
Network advertising competition appears to be increasing, with CPMs falling, so we’ve evolved to use three different networks on each site. Mobile is changing rapidly. We’re testing Google’s AMP and Facebook Instant Articles, as well as Apple News. Sponsored content looms larger than I expected.

Are network CPMs doomed to stay low, and, if so, what does that mean for the sustainability of operations like yours, which depend on network revenue?
Network CPMs will always fluctuate, and we expect them to rise as the California primary nears. Having high-quality national ads helps us sell to local advertisers at a much higher CPM. The local advertisers know they can pay less, but value the consistency we can offer separate from the networks. So networks are the fluctuating base from which we are building.

How important is social media to your operations in both San Diego and LA? Any differences geographically?
Facebook is very important, especially in Los Angeles. Twitter is relatively more important in San Diego. Reddit is playing a bigger and bigger role. One of our techniques is to pitch articles to aggregator sites, as well as send links to individual politicians and opinion leaders. Then they distribute on their networks, so there’s a snowball effect. The Secretary of the Navy recently tweeted one of our op-eds about the new littoral combat ships coming to San Diego.

What do people most want in their local news in San Diego and LA and what are you doing to meet their expectations?
Breaking news coverage of a major event, such as an El Nino storm or a shooter at large, is always the biggest driver of traffic. But day-in, day-out, the top subjects are local government, local crime, the weather (when it changes) and timely local guides such as where to go for Easter brunch. Hollywood is big in Los Angeles, and the military in San Diego. Presidential politics when it’s local is also big right now on both sites. Times of San Diego has an opinion section which is growing increasingly popular. We publish 30-40 articles daily in Los Angeles and 20-25 in San Diego.

You self-funded Times of San Diego, but sought and received  external funding for My News LA. Who is your LA funding source and what percentage of that operation do they own?
The Los Angeles investors prefer to keep their involvement private. They’re interested in exploring alternate models for local journalism and learning from the experience of two sites in two large metro areas.

Are your operations profitable?
Times of San Diego is at break-even. I’m re-investing any profits at this point to continue to build audience and content. MyNewsLA.com is growing right on plan.

Are you eyeing any expansion, elsewhere in California or beyond?
Right now we have our hands full with two sites covering a population area of 20 million. But the model would definitely work elsewhere.

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.