ROCKLAND, MAINE — [UPDATE: On Friday March 9, 2012 Village Soup president Richard M. Anderson announced the closure of all Village Soup publications. In a story announcing that the company’s properties would be sold at auction, the Bangor Daily News reported that Village Net Media, the Village Soup parent company, faced two outstanding loans from the First National Bank of Damariscotta. The initial principal on the loans when they were first taken out in June of 2008 was $7.5 million and $823,000, respectively. But less than two weeks after Anderson’s announcement, the Midcoast Maine Village Soup properties were purchased by Reade Brower, the publisher of The Free Press, and have since been revived.]
In the early 1990s, before the World Wide Web went mainstream, Richard M. Anderson, who ran a company that developed elementary and high school textbooks, experimented with a curriculum that could be delivered online. He tested a prototype in a few states, but it didn’t catch on; teachers and students weren’t ready to use the Internet in that way quite yet.
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But Anderson had an idea: to take some of the same concepts and technology and apply it to community news. He joined up with Kipp Wright–a software developer who was previously an IT director for USAToday.com–and together they built a business to monetize local news with a new web platform, planning to launch their own online news outlets as well as license the platform to small-town newspapers that wanted to move to the web.
The Village Soup model would develop over time, but it began in 1997 when Anderson and Wright launched several local news sites in Maine. The Village Soup sites competed with the local newspapers in their markets until the company acquired all of the papers, merging each Village Soup newsroom with that of its respective competitor. The resulting sites include the Herald Gazette in Camden, the Republican Journal in Belfast, Augusta’s Capital Weekly, and the Bar Harbor Times. Anderson and Wright built a web platform that they replicated across all of the outlets; while the sites do not share content or ads, they all share the same layout and business model.
And the business model remains a relatively unusual one. The Village Soup sites don’t bill themselves as, say, TheHeraldGazette.com. The header reads, “Village Soup – Featuring the writers of the Herald Gazette.” This, Anderson says, is to delineate that this isn’t just the newspaper’s content put online, but a unique space for web journalism.
The advertising that exists on the Village Soup sites is also unique to the web. Local businesses pay a monthly or yearly subscription for the ability to post their own material alongside news content produced by the Herald Gazette newsroom. Businesses get their own bylines, and can post both “briefs” and “offers.” Anderson notes that readers can easily differentiate between news and paid-content “news,” though, because of where the content appears on the site. Although businesses have the freedom to post whatever content they like, there is no anonymity, and no handles, says Anderson. “That assures us that a business won’t post anything online that they wouldn’t put up in a window in their storefront,” he says.
For instance, a local landscaping company can post a “brief” about how to best prepare your lawn for the winter, and then a coupon in the “offer” section for a half-off sale it’s having on flower bulbs. Or a restaurant will post recipes in one section, and menus and coupons in the other. There are relatively few display ads on the sites–most of the advertising is in the form of text posts such as these.
“We’ve gone beyond banners and buttons,” says Anderson. “Content marketing is the key.”
Anderson and Wright say the model has proven to be effective: two of the four Maine sites combined are generating a total of half a million dollars of online revenue a year. All four of the Maine sites together have over 450 businesses paying a weekly membership fee of $24.95. Additional revenue comes from classified listings, auctions, daily deals, and the sale of news photos that have appeared online and in print. According to statsshared online by Village Soup, 21 percent of the total ad revenue for the two biggest properties, Knox and Waldo, comes from online advertising. All four of the Maine sites together attract over 2 million page views per month, and monthly unique visitors for each site can range from 5,000 to 90,000, depending on the site. “In each case, we’re talking about sites that serve populations in the twenty to forty thousand range,” Anderson adds.
The weeklies Village Soup acquired in Maine now serve as flagship papers for the company’s web platform and business model, which they have since expanded to include about a dozen outlets across the country. News organizations that sign up with Village Soup pay an initial fee to get set up on the platform, and then they pay a monthly fee that corresponds to a percentage of the revenue brought in by the monthly and annual business memberships and other advertising and sales.
Today, in addition to the four properties in Maine, Village Soup licenses its platform to nine other news organizations: Wareham Week and Sippican Week in Massachusetts; the Cape Gazette in Lewes, Delaware; Rhode Island’s Block Island Times; The (Waynesville, N.C.) Mountaineer; a portal of several broadcast entities in Ottawa, Illinois; and a cluster of three papers in Iowa, including The Washington Evening Journal, The Fairfield Ledger, and the Mt. Pleasant News. A grant from the Knight Foundation also allowed Village Soup to develop an open-source version of the platform, which is available to any news organization for free.
Wright says that, prior to signing up with Village Soup, the newspapers in the network had each made varying degrees of progress in venturing into the world of online news. “Some people we worked with had other vendors they were using, that they shifted to our platform; some of them had their own homegrown systems, and a couple of them were absolute startups.”
While Village Soup has expanded its model geographically, it has also ventured into different media formats. In 2003, they launched print products to supplement the Village Soup websites in Maine–print versions that would eventually replace the existing weeklies that they had acquired. Some versions are printed as broadsheets, some are tabloids; some are delivered at home for a subscription fee, and some are free giveaways. But all include selections from each community’s site from the week–both the news and the business-generated content, and all include the opportunity for additional display ad sales.
Anderson says that as the print versions of Village Soup publications develop in the future, he anticipates that they will begin to carry longer, more feature-oriented stories than the breaking news posts that appear online throughout the week. One thing that won’t change, he says, is the continuing profitability of print ads, which far exceeds their online counterparts.
“That component will continue to be extremely useful in supporting and subsidizing professional journalism,” says Anderson of the print format. “Online-only–I don’t know that it will be able to ever fully support professional journalism at the level that we have been accustomed to, and so our next innovation will be in the print products.”
Village Soup Data
Name: Village Soup
City: HQ: Rockland, Maine. Locations in: Lewes, Del.; Fairfield, Iowa; Mt. Pleasant, Iowa; Washington, Iowa; Augusta, Maine; Bar Harbor, Maine; Knox, Maine; Waldo, Maine; Marion, Mass.; Wareham, Mass.; Waynesville, N.C.; Block Island, R.I.