Merrill Brown

Guest post by Merrill Brown, director of the school of communication and media at Montclair State University. A member of the founding team of Court TV and the founding Editor in Chief of MSNBC.com, Brown advises digital media start-ups and is a Venture Partner at DFJ Frontier. 

As the management and ownership of the hyperlocal media venture Patch endure contortions about the AOL AOL company’s future, there’s an enormous amount of punditry concluding that Patch’s failures are both about its model and about the impossible nature of succeeding in providing digital news and information to local communities. Some of it is wise, but most everyone is missing a critical point.

That digital local media has yet to scale and create a definitive new model is about investor apprehension about all things local, about entrepreneurial limitations, and about the fact that too many local media startups have to date been underinvesting in building local advertising capabilities. In some ways it’s about one core issue: local media and hyperlocal startups are missing the audiences and revenue opportunities around serving the entirety of large metropolitan areas.

Jeff Jarvis produced a thoughtful, comprehensive review of Patch’s problems last week. The Buzz Machine commentary mentioned our work together in building the New Jersey hyperlocal ecosystem at Montclair State University’s Center for Cooperative Media. (The Center is part of the MSU School of Communication and Media. I’m the School’s Director.) There’s no question but that the approach of maximizing the developing hyperlocal infrastructure is a significant part of the local media future and Patch’s failure to do so is among its many failings, as Jarvis points out.

There’s another piece of the local media puzzle that’s getting inadequate attention. Another of Patch’s failings that I mentioned to their management on multiple occasions is the fact that they have refused to engage with the nation’s cities in any of the obvious potentially meaningful ways. The choice to in effect “redline” the nation’s cities by focusing only on prosperous desirable suburban communities has been a huge blunder, one of their mistakes of meaningful proportion.

Quite simply their focus on the suburbs ignored two basic facts. One is that the residents of entire metropolitan areas share quite directly important concerns around any number of topics such as transportation, sports, regional economic issues and weather. Second is that large advertisers — telecommunications companies, entertainment venues, grocery and drug store chains, and health care companies — want to reach regions and metropolitan areas and their large populations.

What’s more, this strategy leaves the struggling, bloated daily newspapers with in some cases the only city coverage, forcing online news consumers in hyperlocal settings to visit their daily newspapers in order to find out what happened today downtown, when the freeway will be closed and what the prospects are for a snowstorm, obviously a set of news stories and topics with impact throughout an entire region. If hyperlocal sites were also offering coverage of their larger metropolitan areas, daily paper audiences would drop even further. If the newspapers are still afloat, one reason may be that they actually deliver some — if increasingly limited — form of city and metropolitan area wide news. Why limit audience development of a local or hyperlocal news property to a couple of adjacent suburbs?

I have been on the case for this for a long time. Nearly a decade ago, Jeff and I were part of a collaboration that tried to get this right in the Philadelphia market with foundation support. In the spirit of transparency, I also tried with several partners to finance multiple city launches of regional sites along these lines. One of the nation’s largest publishing companies even incubated this effort with my team but ultimately chose to abandon the project.

Neither effort was successful in part because virtually no one has been willing to take on the conventional wisdom about the magnitude of the local advertising challenge. The need for some feet on the street is real and merits investment. Several great sales people in a large market can do a great deal when they’re marketing large, significant audiences. But this is largely considered an unproven thesis, even if important local sites like the St. Louis Beacon and MinnPost in St. Louis continue to do aggressive, groundbreaking work in their cities with limited success in garnering ad revenue.

One new example is worth noting. In Providence, R.I., and Worcester, MA, an aggressive entrepreneur named Josh Fenton has launched GoLocalProv and GoLocalWorcester. I’m proud to be on Fenton’s board of directors. The company is backed by an investment group led by Providence-based Angel Street Capital. The audience is large and growing and the company is nearing significant advertising revenue targets. After the daily newspapers, it is clearly the most successful local news initiative in its markets. It is devoted to Providence, Worcester and their environs and also devoted to serving its advertisers, local businesses of all kinds.

Fenton’s drive, creativity and longstanding relationships in Providence have been a big piece of what’s been missing elsewhere. He and his team are more committed to figuring out the local revenue part of the local news equation than any independent venture I’ve encountered. This stands in contrast to the senior executive of a large city’s startup site I met with a few years ago whose primary goal was to hire the best not-for-profit fundraiser that could be found rather than unlocking local sales by hiring the best sales team or chief revenue officer that might be brought on. I believed back in the previous decade that any great web editor/producer given a staff of 10 to 15 could build a huge meaningful local news, information and advertising business, with well managed overhead and lots of original, freelance and aggregated content.

And I still believe it. Put a hyperlocal collection of strong sites in a metropolitan areas of manageable size like Baltimore, Philadelphia, Atlanta and Denver with a city core, give that group a team of well trained, experienced driven digital professionals and you’d shake up market after market, as Fenton is doing in two markets and will soon do in at least one other.

Markets are loaded with advertisers eager to find solutions beyond the failing, ineffective local newspaper and the overpriced television station. Hopefully, entrepreneurs and investors will take away from the Patch mess that there’s a better way to serve audiences in local markets, one with far more potential than random collection of suburbs.