Howard Owens has done local news at both ends of the publishing spectrum. He was director of digital publishing at the sprawling daily newspaper company GateHouse Media from 2006 to 2009, when his job was eliminated in a big round of corporate cost cutting. Almost overnight, he decided to go entrepreneurial and resurrected GateHouse’s Web version of The Batavian in Upstate New York two days after the chain shut down the paper’s print and digital operations.
Now, eight and a half years later, Owens is looking at growing his base company, Album Corp., beyond Batavia to multiple locations. Expansion would be driven by a homemade mobile app that he’s experimenting with at The Batavian.
In this Q & A, Owens explains why he built his own app – a process that took two years while he continued to publish The Batavian – and how he wants to make it the foundation for potential scaling from his present one site:
The obvious first question: Why did you decide to build your own app for The Batavian?
I wanted to see what I could do with subscriptions. A subscription model is incompatible with The Batavian’s current ad model, which is built around running full stories on the homepage and running all of our ads on the homepage. The imaginable subscription schemes would jeopardize all of our current revenue.
Mobile to me represents a tremendous opportunity for subscriptions. An app is a different delivery method, much more akin to the packaged-goods-media model of the past. In-app subscriptions are near frictionless. Users don’t have to jump through a new set of hoops to subscribe. Most mobile users are used to paying for apps and subscriptions. So the barriers for subscriptions are lower.
Another reason for building a tailor-made app was that The Batavian’s current ad model doesn’t really work well on mobile, so I need to find another way to connect local users with local businesses.
Most local news providers that choose to offer an app get it from a vendor – exactly opposite from what you did. What’s wrong with that?
I think local media companies are making a huge mistake giving away their content on mobile with templated, vendor-based apps, with no real revenue model baked in, not even a good ad model. This inhibits innovation and experimentation, and dilutes the reader/advertiser-to-publisher relationship.
What will your app do to help local businesses?
We started with a Business Directory, but it’s only a foundation for building features that allow businesses to get messages out to app users, run promotions through the app, acquire customer feedback, have customers help promote their favorite businesses, etc. There are also opportunities around location-based services that present their best opportunity in an app integrated with content that drives users. Lots to build there yet.
Your overall Album Corp. aims to “provide local news outlets with a rich feature set for engaging audiences and generating substantial revenue.” What are examples of planned rich features?
I’m focused on building a whole new local publishing platform for the mobile age. Looking back at the history of news publishing online, the impulse of all companies has been to think of putting the newspaper online, to recreate the newspaper experience. Even a lot of online-only startups have copied that model.
I’m interested in building a more native experience, which means it’s built around the feed, allows for more personalization and makes engagement more seamless. I’ll either do that for The Batavian, or if I’m fortunate enough to acquire funding, we’ll look for ways to expand that model into other communities. I’m most interested in being able to help aspiring local publishers get into the game and providing them the resources to be successful but we’ll also look software as a service and whole ownership of local news businesses.
Your new app can be downloaded free. How do you get subscription revenue from it?
The first subscription model we’re trying provides a headline and a rather lengthy story summary. That in itself is kind of a freemium model since most users skim most stories. Currently, stories are free for the first 12 hours after publication. We charge $1.99 a month (I wish Apple allowed a round number like $2 for this sort of purchase) on a recurring subscription for stories over 12 hours old or older and obituaries.
The time-based model eliminates the need for “cookies” and defeats common ways to avoid payment, such as changing devices or browsers. I’m currently working on the Android version of the app, and with that version I’m planning to make a couple of changes to the model as kind of an A/B test.
As for downloads and subscriptions so far, not counting me and my wife, we have eight subscribers out of 441 downloads as of today
You’ve worked for a giant local news provider – and now you’re the owner and publisher of one news outlet serving one community. You cover Batavia thoroughly, reach 10,000 residents daily in Genesee County and you say you’ve got the support of 150 area businesses. Can what you’re doing with The Batavian be scaled successfully to any extent? Do you think of trying to do it?
Being honest here, The Batavian’s growth has been flat for several years. We’ve saturated the market in audience and advertising. Why aren’t we growing? It was easy to bootstrap to this plateau. Our struggle has been to grow past this point.
I could list off a dozen different things we’ve tried over the past six years to try and create a new revenue stream. They all failed. Perhaps some were a bad idea, but the common thread is lack of resources. We had some great opportunities slip away because I couldn’t afford to hire a person to execute on the project and me, my wife, and my one staffer just didn’t have the bandwidth to provide consistent support and sales pressure.
All that said, I believe strongly in the core fundamental idea of The Batavian — real-time, local news, just local news, just local advertising, great customer service and a strong sense of mission built around the local community, and the homepage feed format with all the ads right on the home page — is a sure-fire formula for success. There is no reason that can’t be duplicated in any community. It’s been duplicated in a couple of communities. My friend to the north of us, Tom Rivers, has done very well with Orleans Hub.
The struggle for local indie publishers isn’t the initial success. That’s easy. It’s how to get past that point. I think it can be done and I think a single company could provide the resources to bring it to scale.
So, you’re considering scaling up from your one site, The Batavian?
What I want to build is based on the lessons I’ve learned from The Batavian, but much more focused around building the technology that will support scale, increase engagement, and open up multiple revenue streams. And of course, that means launching local news businesses in more and more communities. That’s the dream, the vision, of course.
Just a month ago, you shut down three-year-old Wyoming County Free Press, your one expansion project so far. How does that fit in with your scaling dream?
For the past 18 months, we haven’t had a sales rep in Wyoming County. I hired two people and neither of them worked out. Since the site was making money, I let it float along though I knew that couldn’t last forever.
I remain bullish on retail ads on news web pages, especially doing it the way we’ve done it on The Batavian. It’s easy money. Starting from scratch, I might try to find a way to wed the
retail ad model with the subscription model, but I wouldn’t turn my back on the local advertising cash flow (and selling local ads is also key to building local audience) to chase subscriptions at this point. You also need to build the relationship with local businesses like I’ve discussed elsewhere in this interview.
Is The Batavian profitable?
According to the IRS it is. We’re an LLC. Everything that isn’t a direct business expense is profit. We lead a comfortable lifestyle. Health insurance costs, though, are starting to really weigh us down.
Margaret Sullivan, the Washington Post media columnist, says local news is on the way to “extinction.” Your thoughts?
If no investments are made, she’s right. People are hungry for local news. Businesses are hungry for local venues to reach local audiences. All want to feel part of a common local experience. In the eight-plus years of running The Batavian, I think I can state that as an empirical, indisputable fact.
Local newspapers are blowing it by making the same mistake year after year — trying to shoehorn a newspaper model into a digital world. Their content delivery methods are poorly conceived. Their advertising models are poorly conceived. Of course, they’re failing. I believe there are billions of dollars sitting out there to support local news that aren’t being tapped because the wrong models are being used. I often wonder what would happen if our model was implemented by a better staffed news organization.
Local news companies are failing by not being technology companies first, by not paying close enough attention to what actually works online. They are not experimenting enough, tapping into behavioral science, and making honest assessments of what they need to do rather than what they wish to do. If local news dies, it won’t be for lack of opportunity. It will be for lack of execution.