Main Street Connect’s Tucker: Hyperlocal Needs Scale
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 . 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.