Aggregate, Curate, Publish To Create Local Media
If I was starting The Village Voice today, I would not print anything. I would not hire a ton of writers. I would build a website and a mobile app (or two or three). I would hire a Publisher and a few salespeople. I would hire an editor and a few journalists. And then I'd go out and find every blog, twitter, facebook, flickr, youtube, and other social media feed out there that is related to downtown NYC and I would pull it all into an aggregation system where my editor and journalists could cull through the posts coming in, curate them, and then publish them. I'd do a bit of original reporting on the big stories but most of what I'd do would be smart curation, with a voice, and an opinion.
The good news is I wouldn't have to build that aggregation and curation system. Our portfolio company Outside.in has built it and they launched it earlier this week. It's called Outside.in For Publishers (OIP). If you are interested how it works, you can click thru and read that post. If you want to see what the curated pages created with OIP look like, here's one from Milwaukee Wisconsin.
What would the P&L of this new local media company look like? Well Peter Kafka of All Things D and Mark Josephson, CEO of Outside.in have been collaborating on that and Peter published a strawman local media company P&L on his blog the other day.
As you might imagine, it's a "honey we shrunk the kids" story. The topline goes down by an order of magintude and so do the costs. The profits are still there (at least in theory). In Mark and Peter's strawman model, a local media business with 40mm monthly page views does about $7mm in annual revenues and almost $3mm of pre-tax income. You can go click on that link in the above paragraph if you want to see the model.
Of course, there are going to be a lot of variations on this model. At Huffington Post, I believe the formula is create 20% of the content and link to the rest. I think you could make this model work with a 50/50 creation/aggregation model but it would have to be the right locale, the right journalists, and the right advertising market.
Whether the tools come from Outside.in or someone else, I am confident that this is the direction of the local media business. As Mark says in the Outside.in post:
And if that is true, and I think it is or will be, then the local media companies that leverage their audiences for their content, create communities and conversations, will win. And they'll be profitable businesses worth owning and investing in.