Tow Center

A Hudson Valley newspaper turns to Substack, Meta to expand digitally

February 22, 2022

As part of our ongoing research program into platforms and publishers, the Tow Center for Digital Journalism is examining the impact platform-funded initiatives are having on local newsrooms. This report is the first in a series.

Over the past seven years, philanthropic support from platforms has become a feature of the news landscape. Programs offering direct financial support, training, and research funding are playing a small but significant role in reshaping journalism, particularly at the local level. As debate rages and emerging regulation raises ever more questions around the part commercial technology companies should play in underpinning the news industry, it is important to evaluate the impact of the support and influence of tech company money.

It is a year since Australia changed the game in terms of mandating technology company support for journalism by passing its News Media and Digital Platforms Mandatory Bargaining Code, which requires companies (specifically Google and Facebook, or Meta, as it is now known) to pay for news content distributed through their platforms. Opaque, multimillion-dollar deals have been made with some of Australia’s largest news companies, and for the first time smaller publishers have the ability to collectively bargain for their own settlements. The Code has been controversial, attracting some criticism for the manner in which it potentially favors large publishers such as Rupert Murdoch’s News Corp, which controls around 70 percent of all Australian newspaper circulation. Other countries, such as Canada and the UK, are now looking to adopt a similar model. Meanwhile platforms continue to invest globally in journalism that, some argue, is an attempt to stave off legislation in regions that track regulatory threats

In the US, a key aspect of the Journalism Competition and Preservation Act, a bill introduced in 2021, is to allow smaller publishers to collectively bargain with tech platforms for better financial terms. A recent white paper by the American Economic Liberties Project, MediaJustice, and the News Media Alliance advances the argument that far from helping minority-owned media, Google’s and Meta’s anticompetitive advertising practices have negatively affected the sector. 

Tow’s previous reporting demonstrated that the two largest providers of emergency covid-19 relief funding were Google and Meta, who committed around $262 million to nearly seven thousand local newsrooms and fact-checking initiatives within the first half of 2020 alone. Platforms have since continued their expansion into local news–specific initiatives, while newer entrants, like Substack, begin their second acts by trying to attract local journalists to their platforms.

Since that report was published, further local support schemes have launched or expanded in the US:

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  • April 15, 2021: Substack announced its Substack Local initiative, committing $1 million to “develop the local news ecosystem by helping independent writers build local news publications based on the subscription model.” The twelve winners were announced on June 1, 2021.
  • April 29, 2021: Two weeks after Substack Local was announced, the Facebook Journalism Project (now rebranded as the Meta Journalism Project) committed $5 million to “support local journalists” interested in writing for Bulletin, its own newsletter platform. The twenty-five recipients were announced on August 19, 2021.
  • October 26, 2021: Apple News expanded its US local news offerings to Charlotte, Miami, and Washington, DC, claiming to provide readers with access to “curated local news experiences” from select local publications that partner with Apple. The initiative was originally launched in 2020 and now operates across eleven major US cities. 
  • December 14, 2021: The Local Media Association Lab for Journalism Funding announced plans for expansion in 2022, thanks to renewed support from the Google News Initiative. The lab was originally launched in 2020 with support from the GNI and expanded in 2021 courtesy of funding by the Lenfest Institute for Journalism. LMA also regularly partners with Meta, administering grants through the Meta Journalism Project’s $10 million covid-19 Local News Relief Fund. (This in addition to Meta’s ongoing Accelerator Program.)

The following is a case study that offers insights into Substack Local’s progress and the extent to which platform funding and training may be driving digital innovation at local newspaper chains.

Since the start of the covid-19 pandemic, Examiner Media publisher Adam Stone has devoted significant resources to diversifying his local newspaper chain’s revenue and modernizing its operations. A now-familiar series of events followed the initial coronavirus outbreak: with events canceled and businesses closed indefinitely, local advertising revenue dried up, and Examiner implemented layoffs. The next two years involved Stone successfully applying for funding from Substack, Meta, and Google as well as receiving support from the Local Media Association.

Up to then, Examiner Media had focused primarily on its four free advertising-supported community weeklies across Westchester and Putnam Counties in New York’s Hudson Valley region, including The Examiner, the White Plains Examiner, the Northern Westchester Examiner, and the Putnam Examiner. Their total workforce consists of around thirty editorial staffers–including both full-time workers and periodic contractors. The only circulation figures on their website show they attract about 100,000 readers per week in print and a further 100,000 monthly online page views.

Stone first joined The covid-19 Local News Fund, a program run by the nonprofit Local Media Foundation that used its extensive network and existing infrastructure to help local newsrooms solicit community funding in exchange for increased pandemic coverage. Within ten days, Examiner Media had crowdsourced more than $15,000; by the end of 2020, their total donations had doubled. “It wasn’t just a great boon financially, but it was also an enormous morale boost,” says Stone, who realized that spring that Examiner Media wasn’t tapping into its full potential.

This general sense of “ample opportunity” was what led Stone to apply to training-oriented grant programs. When newsletter platform Substack announced it was launching Substack Local, in April 2021, an initiative that committed one million dollars to building local news publications on its platform amid what it called a “business model crisis,” Stone applied on behalf of Examiner Media despite the program being geared toward independent writers. “I didn’t quite know what it was. I wasn’t entirely familiar with Substack,” he recalls. 

To Stone’s surprise, he was notified on May 21, 2021, that Examiner Media was one of twelve winning news initiatives and would receive $75,000 in four installments over the course of a year to start a Substack newsletter. (According to Stone, Substack takes 85 percent of recipients’ revenue in the first year before reducing its service fee to the 10 percent revenue applied to all Substack writers, positioning the program more like a cash advance than a traditional grant.) 

“One day, randomly, I’m at the bus stop waiting to get my daughter off the bus and I saw something pop up [on my phone] and I was like, ‘Holy shit, I guess we won a spot,’” Stone recalled. “I just assumed it was highly competitive and that it was unlikely we’d actually get it.” 

Most of the Substack Local winners were independent writers creating newsletters either solo or in pairs. Stone was the only recipient whose plan was to build a newsletter product for an existing local newspaper chain. Another Substack Local winner, The Mill, also describes itself as a local newspaper, but its business model has been “delivered by email” since its founding, in June 2020. The only other local newspapers Substack has been able to point to are all newsletters exclusively published on its platform.

Armed with a boost in morale and community support, as well as a new round of funding and Substack mentorship, Stone set out to expand Examiner’s digital operations so that it was more than “just a print community newspaper with a website and some tweets and Facebook posts.”

Examiner Media’s newsletter was soft-launched that summer—around the time they put a paywall up on their general website. Shortly thereafter, they brought in a digital editorial director with local magazine experience, Robert Schork, who, Stone says, “immediately identified issues and problems that we had and the way we were going about it.” One of those issues was cannibalizing their own efforts by competing with themselves in regards to paid content; another was not clearly conveying to their readers how they were differentiating content between their newspaper and newsletter.

The solution was to position the newsletter as a digital newsmagazine with its own distinct brand and content. “Me coming from the magazine world, and Adam coming from the newspaper world, was a wonderful mind meld of sensibilities,” according to Schork, who wanted to give hard news the magazine treatment and create “almost like a local version of Time or Newsweek.” Taking inspiration from premium streaming services like Apple+ and Disney+, the team decided to name it Examiner+. They’ve also since abandoned the website’s short-lived paywall, deciding against asking readers to pay twice, for both the daily news on its website and a digital newsletter. Schork explained that after dropping the paywall, they automatically converted website subscriptions into Substack ones and gave readers the choice to opt out.

Despite facing pandemic-related layoffs only a year earlier, Stone was able to hire a newsletter-first reporter to cover issues like LGBTQ+ rights and climate change, while providing some additional general assignment reporting for the newspaper. This aspect—creating sustainable, annual revenue for new digital products while also bringing on new journalists to produce them—is what excites Stone the most. He says it’s his “grand ambition” to create a blueprint so other community newspapers can break into the newsletter space, too. “More than anything else, though, it’s about experimentation, not about forecasting the future,” Stone emphasized repeatedly.

The nature of the newsletter—more casual and personal—has allowed Examiner Media to engage with readers in ways the community newspaper had never seen before. Their newsletter has allowed for more first-person essays and columns than the more sober, weekly print edition does, and many readers reply directly to emails with pitches for op-eds and letters to the editor. They also publish a Weekend+ super-edition, a multimedia version of a Sunday paper that includes a relevant weekend “prelude” linking to Spotify, a local Westchester historical photo that Stone’s fourteen-year-old daughter digs up as part of her Examiner internship, and a cartoon pulled each week from the New York Press Association, among other components. 

While Stone considered the Examiner+ newsletter, which was officially launched on October 5, an initial success, “it still felt like it was going to be a very tall climb to meet our revenue needs considering our new payroll demands.” His goal is for Examiner+ to eventually bring in around $100,000 in annualized revenue.

Substack has been reluctant to comment on how the program is progressing despite announcing the winners nearly nine months ago. Substack cofounder Hamish McKenzie, who declined an interview with the Tow Center, citing time constraints, told Tow via email that, “while it’s too early to make any broad conclusions about Substack Local, we’re encouraged by the work we’ve seen with the program so far, including Adam’s work with Examiner Media’s Examiner+.”

While many see Substack Local as a net positive investment for the journalism industry, others have expressed reservations.

The Lenfest Institute’s Joseph Lichterman told AdWeek last year that he was concerned how the Substack model would scale on the local level, where outlets have an inherently “smaller addressable market.” Lichterman recently told the Tow Center that it’s also difficult for one or two people writing a newsletter to fill in the gaps left behind by a designated local newspaper. However, for an existing local publisher like Stone with limited resources, Lichterman “understands the appeal of a Substack” because it’s a simple way to get off the ground while maintaining a reader-friendly presence. 

Examiner’s initial efforts seems to have paid off, though; Stone applied for the Meta Journalism Project’s Accelerator Program and landed a spot in its US Reader Revenue program. The grant for Stone’s cohort, which began its training in November 2021, is administered through the Local Media Foundation—the same organization that helped Examiner Media raise the initial $30,000 that set in motion Stone’s quest to diversify the newspaper’s operations. (Stone was unable to disclose the dollar amount of the Meta grant Examiner Media received.) Stone told the Newsletter Crew last year that he also received an undisclosed amount of additional journalism grant funding from Google.

It’s not unusual in philanthropic circles to see the same newsrooms funded by overlapping initiatives—or, as the Democracy Fund defines it, “safe bets” that have been vouched for by other legacy institutions, newsroom leaders, or peer funders—resulting in a charmed circle who are increasingly selected for grants and initiatives after momentum is gained. 

Examiner+ attributes a huge portion of its growth to Meta’s Accelerator Program. After its soft launch in July, Examiner+ experienced an initial spike in subscriptions that quickly flattened out; the same pattern emerged after its official fall launch. But once Stone implemented the tips he’d learned from his Accelerator cohort, subscriptions are now in “a more steady, consistent climb that feels more sustainable,” he said. 

In the newsletter’s first six months, Examiner+ has acquired around 3,200 total subscribers, 300 of which were paid subscriptions. Examiner has also retained subscribers at a much higher rate than what they had originally expected. According to Schork, “that tells me that once people find us, they like sticking around.”

“Obviously we still have a long way to go,” said Stone on achieving their goals for Examiner+, but Meta’s Accelerator program was the next step in making Stone go from feeling “mildly pessimistic” to “pretty optimistic” for the newsletter’s future. 

For now, like many other local newsrooms, Examiner Media still relies heavily on print advertising revenue to publish its four weeklies—staying true to its founding principle that print isn’t dead. Stone is aware that sounds counterintuitive, “but it works, so what’s so crazy about it?” Meanwhile, Substack and Meta are helping subsidize the runway needed to get the Examiner+ newsletter off the ground. 

“To me, the bigger picture is the culture that we created fifteen to twenty years ago, when the expectation became that everything, generally, is free for online journalism,” Stone said. That, at least, is the war Examiner Media is waging, and they’re hoping others in local news will join them. Whether Substack will be the platform where this can be achieved remains to be seen.

About the Tow Center

The Tow Center for Digital Journalism at Columbia's Graduate School of Journalism, a partner of CJR, is a research center exploring the ways in which technology is changing journalism, its practice and its consumption — as we seek new ways to judge the reliability, standards, and credibility of information online.

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