Last week, I wrote about my skepticism of Patch.com, based on my assumption that the economies of scale available to a national chain of local publications online were no longer enough to overcome to the inherent cost advantages enjoyed by locally-owned publications.
Locally-owned publications don’t have to generate enough income to support regional managers and national executives. And if they’re boot-strapped, they don’t have to pay back VC or investors, either. That gives a local start-up a huge cost advantage in what’s become a brutal online publishing market.
If you’re going to start an investor-funded national chain of local news websites, you’re going to need to achieve some economies of scale that allow you to make enough extra income – as a chain – to overcome the cost advantage enjoyed by your locally-owned competitors. I dismissed several such ways that newspaper chains achieved that in the past, arguing that they’d been made irrelevant by the Internet. But a reader challenged me: Are there any economies of scale that could help make a national chain of local online news sites profitable?
Hey, I love a challenge. So here are two I thought of this week:
1. National training
I know from personal experience that it takes time to develop the experience to adapt to online publishing. You need to recalibrate your sense of what is news and how it should be presented to fit with the demand of blogging and initiating reader discussions. (If you simply write print-style articles then leave it to readers to talk about them, without direction – you’re going to fail. Trust me.) I’ve spent years learning how to build and lead an engaged community of readers, and I’m still learning.
A smart, focused national training program could help reduce the time it takes a local editor to produce an engaging website. Local website publishers who don’t have access to such training will take longer to get up to speed, potentially giving the nationally-affiliated site time to build a loyal audience for itself.
2. Search engine optimization
While any local publisher can learn search engine optimization [SEO] techniques, a national chain can give its local publishers an advantage by arranging for aggressive cross-linking among its sites. That creates a potentially huge number of inbound links, helping push the chain’s sites ahead of its local competitors.
In addition, by building a national brand for local news, the chain might be able to elicit more in-bound links to its sites from outside the network, the way that Wikipedia commands so many in-bound links from publishers looking for an easy place to link to provide their readers with background information on a topic. (Another analogy would be About.com – which is a national network for niche topics the way that Patch.com might be for geographically-targeted local news.)
The chain’s training program also could include instruction in SEO and encourage individual editors to cross-link to other network sites within their stories, as appropriate, further boosting SEO effectiveness.
While locally-owned websites might catch up on training, they can’t match the in-bound linking power of a network, making this advantage a sustainable one that might help swing a national network toward competitive advantage over local start-ups.
Will Patch.com, specifically, take advantage of these opportunities? Heck if I know. We’ll find out.
All this said, it’s not inconceivable that locally-owned start-ups could replicate the advantages of a national chain network by working together. An organization such as the Online News Association – but solely for independent publishers instead of being dominated by employees of newspaper chains – could arrange online and in-person training, as well as host a directory and forum for cross-linking among member websites.
So, while there might be potential economic advantages to hooking up a network of local news websites, one doesn’t have to become part of a corporate-owned network to realize them.