Startups Aim to Reinvigorate Local News in America

April 14, 2022

Digital experiments try different ways to fill a glaring gap

The article below originally appeared in The Economist on April 16, 2022. The full story can be found here.

In its heyday in the 1950s, the spacious five-storey redbrick building on North Calvert Street housed the hundreds of employees of the Baltimore Sun, the city’s pre-eminent newspaper. Like other local papers across America, the Sun has since fallen on hard times. In 2018, after years of lay-offs, it moved out of downtown.

Back at the city’s Inner Harbour, construction crews hurry in and out of a former power plant. They are converting the building into office space for a new occupant aspiring to fill the gap left by the Sun’s shrinking presence. When it launches online this spring, the Baltimore Banner, a non-profit news organisation backed by a local businessman and philanthropist, Stewart Bainum junior, aims to boast more writers than its crosstown rival. “Our goal is to make sure Baltimore doesn’t become a news desert,” says Imtiaz Patel, the ceo.

The slow death of local news in America is a well-documented phenomenon. The internet has ended the monopolies on news and advertising once enjoyed by local media. But a wave of startups is betting that a digital-first strategy, with its reach and low costs, can reverse the decline. The initiatives are experimenting with a variety of business models.

The scale of the collapse of local news has been stunning. In a report published in 2020 Penelope Abernathy, a professor now at the Northwestern University Medill School of Journalism, found that 1,800 communities that had a local news outlet 16 years earlier now had none. Two-thirds of counties lack a daily newspaper.

Political scientists believe the consequences have been severe. The demise of local news has been linked to greater political polarisation, declining participation in local elections and reduced accountability for local elected officials, leading to more corruption. It has also contributed to the growing nationalisation of politics, with a voter’s choice for president increasingly predictive of their choice for school-board representative. Some people are now prepared to throw money at the problem.

One way is through philanthropy. Rich benefactors propping up local news is nothing new—the Boston Globe, Los Angeles Times and Washington Post all rely to varying degrees on patrons with money to spare. New ventures like the Baltimore Banner reckon it is an advantage not to be weighed down by the legacy infrastructure of print. The American Journalism Project gives grants to non-profit local news organisations across the country, with an eye to cultivating sustainable businesses. But what if the philanthropists lose interest? “What Stewart provides is seed capital,” says Mr Patel. “Longer term, we are aiming for a diversity of revenue sources.”

Other startups are leveraging one of the internet’s oldest innovations: the email newsletter. In the vanguard is Substack, a technology company that provides the tools and infrastructure for writers to establish their own paid email subscriptions. Although many of the platform’s best-known publications cater to a national audience, some are focusing locally.

After the national magazine he worked on closed in 2018, Tony Mecia pondered a return to life as a freelancer in Charlotte, North Carolina. But after seeing how many local stories went unreported even by the city’s main paper, Mr Mecia decided to start his own newsletter on Substack, the Charlotte Ledger. “It’s a turnkey solution, I probably never would have started the Ledger without something like Substack,” says Mr Mecia. With no need for external financing, the business can grow with subscribers, and Mr Mecia can focus on reporting.

Some national digital-news organisations believe their formula can work locally. Axios, mostly known for its daily email newsletters on national politics, started Axios Local last year to deliver regular email newsletters tailored to 14 cities, with 11 more soon to come. With its headquarters in Arlington, Virginia, handling operations, and leveraging a well known brand, Axios is betting that its ad-supported newsletters will allow it to invest in local journalists. “From a business perspective, we go where there’s population, audience and money first, and then work our way out to the harder-to-reach areas,” explains Jim VandeHei, the ceo of Axios.

The range of experiments is encouraging, and all are eager, like the Baltimore Banner, to stress the conservatism of their strategies, prioritising long-run sustainability ahead of growth at all costs. But success in local news, whatever the model, will not be easy. And Ms Abernathy worries that these new digital initiatives will leave much of the country untouched outside America’s major cities. “In these places”, she says, “there’s no one left to hold the powerful accountable.” 

This article appeared in the United States section of the print edition of The Economist under the headline “Enter the startups.”

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