Think of this as Volume 17, Number 34 of the newsletter I have written weekly since March, 1997. Enjoy.
Those people who ignore these facts always get it in the end. Tim Armstrong has gotten it in the end with Patch. He deserves to see it end his career.
But that doesn't mean local news isn't a great business. Just the opposite.
One of my fonder memories from my days at the Atlanta Business Chronicle was attending a local launch party for USA Today. Stacks of the first issue were handed out, and I still have mine. Al Neuharth spoke by satellite. Many hors' d'oerves were consumed, many beers were drunk. And the crowd at my party laughed their asses off, because the product seemed so lame.
This, we concluded, was crazy. “USA Today, No Big News Today,” we sang. The paper read like a local TV newscast, with all the depth of celluloid.
Patch os similar. Patch has one logo, one look-and-feel. A Patch site in Georgia looks just like one in New York. Each is staffed by someone who thinks, writes, and reports like an intern, a kid covering school board meetings pretending to be Bob Woodward.
Patch was Armstrong's baby. He brought it with him to AOL. There is one person at AOL who deserves to be fired over this fiasco. His name is Tim Armstrong.
What should the company have done instead?
It should have offered the software as a franchise.
Instead of hiring 600 people to run 600 identical sites, Armstrong should have created one site, under one publisher, in one place, maybe Alexandria, Virginia, where AOL is located. That publisher would have acted as a full beta test, ordering content, selling ads, arranging the software to fit the community, giving his site a unique look-and-feel, keeping track of everything, especially his own P&L.
Only when that single site was profitable should Armstrong have considered going national with it. That publisher would have learned the value of reach, the value of engagement, and would have ordered the creation of tools to measure that. He would have hired an editor, maybe more than one, and managed a balance sheet. Maybe he would have fired some people, quietly, who couldn't cut the mustard in editorial or ad sales. He would have learned what to look for in good people. It would have been a book.
Maybe that site wouldn't have worked. Maybe, after a year, even with a good publisher, Armstrong would have found out he'd wasted a million dollars. Much better than wasting a billion, don't you think?
From a successful experience, the publisher could have built a handbook, and a franchising plan. Not for cookie-cutter sites, but for individual, unique sites. Then he would have gone around selling this opportunity to small publishers and people who wanted to be in the local news business around the country, charging them fees up-front, but delivering in return a plan and the back-end support needed to execute it in a customized way.
There's a lesson here from baseball. For decades baseballs' minor leagues were a failure, mainly because the major league teams insisted on running it. Cookie-cutter teams with cookie-cutter major league logos on them, in bandbox parks and a parade of identical-looking kid ballplayers.
Until, that is, Mike Veeck came along. He bought a team, re-branded it with a local identity, he started running local promotions, and began giving people a good time. The score became secondary. The idea was that this was a local celebration of a local place, its unique values and ability to have fun. It worked, and now most minor league teams have their own, separate, unique identities, their own profit-and-loss statements, and they're making money. (He even wrote a book about it called Fun is Good.)
That's what local news has to be. Maybe you'll find someone in a small Alabama town who can aggregate everyone in the community to watch for his stuff, every day, and debate it intensely. That guy can prove to local advertisers that he reaches their market, that he has high levels of engagement with that market, and thus local advertisers will call him, because he'll be their only choice. Maybe the “Patch” in that small Alabama town becomes a bigger business than the one covering all of Long Island, or a city like Atlanta. And it shouldn't be called “Patch,” either. It should have a unique name for that unique piece of Alabama.
Local publishing, in other words, is about local. You can offer back-end software, you can offer ad support, but in the end it's about what a local guy does in his own town that counts. You can get your best people to deliver best practices, you can improve your central system based on their input, you can essentially create markets for local papers and have them bought, sold, and traded.
But you can't run it from the top-down. It can only work from the bottom-up.
Tim Armstrong never understood that, he still doesn't, and for that he needs to be fired.