Overall, the Huffington deal did help solve one of Patch’s problems: the workload placed on local editors. With more free content, more cross-posted stories, and more aggregation, it became easier to set the site on autopilot. Which, of course, can be dangerous.
Near the end of the year, some media-business outfits were saying it was “do-or-die” time for Patch. Business Insider estimated in December that Patch would lose “at least $100 million this year,” according to calculations based on “documents we’ve obtained.” In an earnings call with analysts in February, though, AOL’s chairman and CEO, Tim Armstrong, and other company officials pushed back, saying they had invested $160 million in Patch in 2011 and that nearly half of its 863 local sites were generating about $2,000 a month in revenue by the end of the year. They said they expected more growth this year, and claimed that they already had 50 percent of the total Patch revenue from 2011 on the books for 2012, though they didn’t say how much that was. Arthur Minson, AOL’s chief financial officer and president of AOL Services, told analysts that the original business plan for Patch assumed that local sites would break even within three to four years, and produce “healthy margins thereafter. That continues to be our assumption.”
And, it is worth reiterating, AOL is still investing in Patch. Personally, I have no doubt that Patch as a whole will be profitable at some point, and that cutting costs at the local level will help that. But that could also mean a marked shift from what made the company so exciting for me in 2010.
Then and now
Just before handing in my resignation at Patch, I began working on a series with the local historical society entitled “One Century Ago.” We would transfer (from microfilm to JPEG) and then post the front page of the local newspaper from a hundred years ago. It was a fun tidbit that let people reflect on how the villages had changed, while giving a little historical context to the modern community.
Yet what struck me is how little difference there was between what I kept seeing on the front page of the old Tarrytown Press-Record for each week back in the day, and what would be on the front page of a solid Patch site in 2011. A great local newspaper or local news site has everything—from trustee meetings to petty theft, from church service times to seemingly trivial society pieces. There is a formula for local news, and it works. If done right, in a thorough manner, a news site can captivate a community—it can bring its audience online, it can digitize a town.
I would say the Tarrytown-Sleepy Hollow site succeeded in digitizing the community through solid reporting. Many other Patch editors accomplished this as well. However, that didn’t always mean advertisers were eager to support our sites and it didn’t mean that the sites were financially sustainable, given money spent on employees, freelance costs, and the corporate backend. And still there is the local editor’s punishing workload.
No doubt the Patch model will adjust to market realities. It is still focused on that original goal of total community integration. The effort to find the balance between shoes-on-the-ground reporting and search-engine pop that aids profitability will result in sites that have a dramatically different character than they did even a year ago.
If anything, I think Patch’s trials and errors will show that online local news can be sustainable, even profitable, if you have good, hardworking journalists, a strategy to keep costs at a minimum, and a willingness to stick to what has made community news a staple across America for decades. It’s a challenge, and I wish my former colleagues the best of luck.