Arlington Hyperlocal Picks Its Own Patch, Turns a Profit | Street Fight

Arlington Hyperlocal Picks Its Own Patch, Turns a Profit

Arlington Hyperlocal Picks Its Own Patch, Turns a Profit

Last week I was among the questioners at a panel of hyperlocal news sites in the DC region called, “Up Next – Hyperlocal Coverage: Neighborhood Blogs, Community Websites, and the Future of the News” at the National Press Club. If you click the link you’ll see folks from DCist to borderstan.com were on the panel, as was Brian Farnham, the editor-in-chief of Aol’s Patch (video here).

Discussion floated among the usual hyperlocal topics while most the smaller sites seemed to restrain themselves from poking at Patch. Farnham did his best to explain that while Patch is now a large network with over 800 sites each is individual trying to co-exists in the local space alongside their independent brethren — “there’s room for everyone” he seemed to be saying.

In fact, Patch president Warren Webster later said over email: “This is arguably the most exciting time in the history of local media, as companies large and small help shape the rapidly changing landscape. We at Patch believe that both can be successful.”

All of the local DC sites represented themselves as passionate, caring and really hard-working leaders of their micro-community doing whatever it took to get the hyper-news — even if it meant riding a bike across town in the rain to get a picture. And remarkably, across the board (except Patch, which doesn’t talk detailed numbers) there was agreement that their endeavors were not paying enough to support their editors and staff.

Hyperlocal news experts on the panel at the National Press Club July 14.

But during the audience Q&A, Scott Brodbeck, the editor of hyperlocal ARLnow.com (Arlington, VA), which is part of the “authentically local” movement, stood up to announce his site was actually cash-flow positive. In fact, he claims to have a steady thrum of profitable traffic, and an empathy-bordering-on-sympathy for his competition (read: Patch).

Following up with him a few days later, I thought it would be worthwhile to dig into this apparent and positive anomaly.

How did you get ARLnow started?
I launched ARLnow.com in January 2010, shortly after leaving TV (the TV schedule wasn’t working with my MBA schedule).  After quitting my cushy gig at NBC4 (WRC), I started looking for other jobs out there.  However, nothing really appealed to me.  I’ve always closely followed the news biz and I recognized that pure-play, web-based news was the future.  I looked around at the news outlets in my community — Arlington, Va. — and realized that it wasn’t really being covered all that well for a tech-savvy community of 220,000.  There was one decent weekly newspaper with a lousy web site, then sparse coverage from the regional outlets.  I saw the opportunity and started to think — hey maybe I’ll give this a try.  I registered the ARLnow.com domain one day, then one night in January I stayed up all night launching a WordPress site for ARLnow.com.

How have you gotten to profitability when so many other hyperlocal sites struggle?
I’m a lousy salesman, so it’s certainly not my sales prowess. The biggest secret to success is having a news product that everybody reads and talks about. The second secret to success is having a reasonably-priced, effective and simple-to-understand ad product. Businesses approach me, tell me they want to advertise, and I show them how and try to craft their campaign in a way that will be effective. I rarely try to “sell” businesses on the ads. I can’t help but feel that it’s hard for Patch and weekly newspapers to compete with the price and reach of our advertising. It’s an advantage of being small and independent that we are able to offer advertisers the best of both worlds — reach and value. As more local businesses figure this out, I expect demand is only going to increase.

If other hyperlocals are struggling, they either need to increase their reach or develop a better ad product. And if that still doesn’t work, if nobody is emailing them about advertising about that point, then pick up the phone and start selling. There is no magic number, there’s just the point where enough people in the community are reading and talking about your content that advertisers take notice.

What is your opinion of the overall Patch experiment and of your local Patch?
At this time, I don’t think hyperlocal scales beyond small, independent, locally-owned operations. There’s just not enough ad money on a local level to support the multiple layers of management in a national company; there are no economies of scale at the moment.  Right now local newspapers can pull it off, but their business model is slowly eroding.

Patch is a noble experiment, but it’s doomed to failure. I feel sorry for the journalists that work there who will eventually lose their jobs, and I feel sorry for the Aol shareholders who are seeing their value eroded by Patch’s massive losses. The one thing I don’t like about Patch is the anti-competitiveness. When they come in to communities with strong existing news sites, with their unsustainable model, they risk forcing the smaller guys (especially the independents) out while not contributing to the long-term viability of local journalism in that community.  I should add that while we’ve seen Patch inexplicably enter crowded local online news markets, I haven’t yet heard of an indie that had their business significantly hurt as a result — but I think that speaks to Patch’s poor execution, not their desired result. I don’t view the two Patch sites in Arlington as serious competitors.

The one thing I don’t like about Patch is the anti-competitiveness.  When they come in to communities with strong existing news sites, with their unsustainable model, they risk forcing the smaller guys (especially the independents) out while not contributing to the long-term viability of local journalism in that community.

Describe a typical day of newsgathering for you / your site? How many people are doing what and over what hours?
I have one freelance reporter I’ve been working with, but other than that it’s pretty much all me.  I wake up around 7:30 and have the first post of the day up by 8 to 8:30 — the “Morning Notes,” which is basically a list of three to five topical Arlington-related links along with a photo of the day.  I then will try to post at least one article every 60 minutes between then and 4 pm (when my daily newsletter goes out).

My audience is very much a work-time audience.  I will only post at night or on weekends when there’s breaking news or if there’s something I feel I absolutely have to publish then in order to be first to the story.  I will, however, often work on newsgathering — sending emails, making calls — at night and on weekends.  That after-hours newsgathering allows me to maintain my publishing schedule during the day.

Talk a little about your traffic — how it has grown and what it’s doing now?
We now average about 600,000 page views per month.  The growth has been phenomenal.  Although we’ve seen steady growth in terms of newsletter subscribers and Twitter followers, the rate of growth in terms of traffic has slowed down from when it was doubling every 3 months.

I’m averaging more than 80,000 uniques per month, per Google Analytics.

Have you “broken” any stories or been a fast follower garnering big traffic?
ARLnow.com breaks stories daily.  I consider it the secret to our success.  If we weren’t breaking stories about Arlington, there would a) not be that many stories to tell and b) not be any significant differentiation between us and anybody else.  Here’s an example of one big story we just broke.  Very important story, tons of comments, nobody else had it. The legacy media properties in D.C. “borrow” our reporting quite often.  I’ve made peace with that, since they’re really not direct competitors.

If you’re not breaking stories in your community, then why do you exist?  What are you adding?  I couldn’t imagine trying to make a business out of other people’s reporting. If the local newspaper has already one a good job reporting a story, I’ll just link to it. No need to try to duplicate coverage. I’ll focus my efforts on bringing another story to light. Then, news consumers have two different stories to read about and engage with, not one story from two different sources. There is no shortage of untold stories on a local level.

Rick Robinson’s Turf Talk column appears every Wednesday on Street Fight.

11 thoughts on “Arlington Hyperlocal Picks Its Own Patch, Turns a Profit

    1. Revenue exceeds personal and business expenses, which are quite low. It’s not a fortune, obviously, but it’s a start.

  1. Scott has done a superb job with ARLnow, and it’s essential reading for anybody living in the area. His boffo audience numbers are testimony to that–and with that sort of traffic, revenue follows. Bravo to him–he’s a sterling example for anybody doing an independent hyperlocal site.

  2. As the publisher of an independently owned hyperlocal site just north of Seattle, I couldn’t agree more with Scott’s comment about what Patch does when they enter a town like mine. There was no journalistic reason for Patch to come our area — before their arrival we already had five media outlets (including two online news sites) for a population of 40,000 people. It is absolute BS that “there’s room for everyone” — if Patch drives locally owned sites out of business (and many of us have heard that is their stated goal, despite their claims of wanting to co-exist) then the community is the loser. There are *so* many places in the U.S. without online news, yet we don’t see Patch going there. Their strategy is not to serve the community, but Patch.

    1. I’m not sure I agree. I am also the owner of a local independent online news source, but I am not afraid of Patch.

      According to recent reports, local coverage across the US has been down sharply, yet the prognosis from analysts is that local businesses will be spending more money online.

      My concern is not that Patch will eat my lunch, but rather Google, Facebook and Groupon. I am concerned much more with indirect competition than (so far) inferior coverage by those less rooted in my local community.

      When we entered the market, a couple of sites in our area were a timid – would we steal business from them? After two and a half years we have an ad network that benefits many of these same sites and we are collaborators in addition to competitors. What we see in our market is a larger ad spend in digital. Our job is then to link that money with local communities and local coverage.

  3. I think this week’s announcement that Borders is liquidating should be a warning about the impact Patch will have on communities. Once Borders shutters its remaining stores, there will be many communities without a brick-and-mortar bookstore, not to mention the wonderful “third place” Borders provided. Already in Decatur, GA, there has been a debate about what impact Patch has had on local reporting and what the community may be like once Patch disappears.

    I have interviewed many local business owners and cannot find one willing to invest in Patch advertising. They’re happy to put the Patch sticker on the window and subscribe to the daily emails, but beyond that there’s no buy-in that Patch is going to be a viable advertising medium.

    Then there are the concerns about the quality of Patch’s reporting (accuracy, poor editing). Last week the Patch editor who waxed her legs and posted the results on her site published the daily “5 Things” last Wednesday morning. Item no. 2 told people to go to a local pizza place for free Bastille Day pizza that day. Unfortunately, Bastille Day is celebrated on 7/14, not 7/13. What business owners are going to want to pay to advertise on sites like that?

    Among Patch editors, there is an informal network within which they swap editorial gaffes, like the leg waxing video, and embarrassing writing/editing mistakes that go uncorrected. Patch cannot provide advertisers with a reliable place to put their money without providing a quality product. If Patch editors know that their product is not acceptable and readers know it, how much longer can AOL continue to pour money into the venture before they pull the plug?

  4. I love the streetfight site, and I encourage you being cheerleaders for hyperlocal, but before you declare a site “profitable” and get us all salivating please do the math.

    The reality is in the numbers: based on what i see posted on the site at no discount total annual revenue at ARL appears to be under 30K in an area where the average annual salary is over twice that. Again, not a model that one can call a raging success. Only works because it’s a one man band, who could make more money as a Patch editor. More power to him though, and it’s a nice site.

    1. That’s a bit of an underestimate — keep in mind that we do sponsored contests, Deals of the Day and AdSense for remnant inventory, etc. — but regardless, the point isn’t whether I can make more money than a Patch editor. The point is that here’s a business model for quality local news that’s long-term sustainable. There aren’t many of those right now.

      Besides, most bootstrap small businesses don’t start out making tons of money — revenue and profit grow over time. That’s fully what I intend to do, and that’s why I’m reinvesting the profits in freelance hiring.

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11 thoughts on “Arlington Hyperlocal Picks Its Own Patch, Turns a Profit

    1. Revenue exceeds personal and business expenses, which are quite low. It’s not a fortune, obviously, but it’s a start.

  1. Scott has done a superb job with ARLnow, and it’s essential reading for anybody living in the area. His boffo audience numbers are testimony to that–and with that sort of traffic, revenue follows. Bravo to him–he’s a sterling example for anybody doing an independent hyperlocal site.

  2. As the publisher of an independently owned hyperlocal site just north of Seattle, I couldn’t agree more with Scott’s comment about what Patch does when they enter a town like mine. There was no journalistic reason for Patch to come our area — before their arrival we already had five media outlets (including two online news sites) for a population of 40,000 people. It is absolute BS that “there’s room for everyone” — if Patch drives locally owned sites out of business (and many of us have heard that is their stated goal, despite their claims of wanting to co-exist) then the community is the loser. There are *so* many places in the U.S. without online news, yet we don’t see Patch going there. Their strategy is not to serve the community, but Patch.

    1. I’m not sure I agree. I am also the owner of a local independent online news source, but I am not afraid of Patch.

      According to recent reports, local coverage across the US has been down sharply, yet the prognosis from analysts is that local businesses will be spending more money online.

      My concern is not that Patch will eat my lunch, but rather Google, Facebook and Groupon. I am concerned much more with indirect competition than (so far) inferior coverage by those less rooted in my local community.

      When we entered the market, a couple of sites in our area were a timid – would we steal business from them? After two and a half years we have an ad network that benefits many of these same sites and we are collaborators in addition to competitors. What we see in our market is a larger ad spend in digital. Our job is then to link that money with local communities and local coverage.

  3. I think this week’s announcement that Borders is liquidating should be a warning about the impact Patch will have on communities. Once Borders shutters its remaining stores, there will be many communities without a brick-and-mortar bookstore, not to mention the wonderful “third place” Borders provided. Already in Decatur, GA, there has been a debate about what impact Patch has had on local reporting and what the community may be like once Patch disappears.

    I have interviewed many local business owners and cannot find one willing to invest in Patch advertising. They’re happy to put the Patch sticker on the window and subscribe to the daily emails, but beyond that there’s no buy-in that Patch is going to be a viable advertising medium.

    Then there are the concerns about the quality of Patch’s reporting (accuracy, poor editing). Last week the Patch editor who waxed her legs and posted the results on her site published the daily “5 Things” last Wednesday morning. Item no. 2 told people to go to a local pizza place for free Bastille Day pizza that day. Unfortunately, Bastille Day is celebrated on 7/14, not 7/13. What business owners are going to want to pay to advertise on sites like that?

    Among Patch editors, there is an informal network within which they swap editorial gaffes, like the leg waxing video, and embarrassing writing/editing mistakes that go uncorrected. Patch cannot provide advertisers with a reliable place to put their money without providing a quality product. If Patch editors know that their product is not acceptable and readers know it, how much longer can AOL continue to pour money into the venture before they pull the plug?

  4. I love the streetfight site, and I encourage you being cheerleaders for hyperlocal, but before you declare a site “profitable” and get us all salivating please do the math.

    The reality is in the numbers: based on what i see posted on the site at no discount total annual revenue at ARL appears to be under 30K in an area where the average annual salary is over twice that. Again, not a model that one can call a raging success. Only works because it’s a one man band, who could make more money as a Patch editor. More power to him though, and it’s a nice site.

    1. That’s a bit of an underestimate — keep in mind that we do sponsored contests, Deals of the Day and AdSense for remnant inventory, etc. — but regardless, the point isn’t whether I can make more money than a Patch editor. The point is that here’s a business model for quality local news that’s long-term sustainable. There aren’t many of those right now.

      Besides, most bootstrap small businesses don’t start out making tons of money — revenue and profit grow over time. That’s fully what I intend to do, and that’s why I’m reinvesting the profits in freelance hiring.

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