New business models for newspapers are emerging in non-metropolitan and small metro areas, Northwestern reports

New business models for newspapers are emerging in "improbable" places, Tim Franklin writes in the latest installment of The State of Local News 2022 report from Northwestern University.

Richland County (Wikipedia map, adapted)

Franklin's first object example is Richland County, Ohio, center of the Mansfield metropolitan area but "a mostly rural enclave." Some may question that use of "rural," but its characteristics are similar to most rural places in the U.S.: "The median household income and the percentage of adults with college degrees are well below the national average. Richland also lags the rest of the country in broadband internet penetration."

Nevertheless, the county has "one of the more successful local, for-profit digital news startups of the past decade," Franklin reports. "The Richland Source is defying the odds of its demographic deficits and has found a profitable journalistic niche in a community of 125,000 residents that is also home to two local dailies and a weekly newspaper. The Source’s financial elixir is a committed local ownership, a highly diversified revenue stream, a clearly defined editorial mission focused on solutions journalism, a cost structure unburdened by legacy print and award-winning journalism."

He adds later, "Other examples include The Pilot, a hundred-year-old twice-weekly newspaper in central North Carolina that serves a community of similar size to Richland County, and the Shawnee Mission Post, in the suburbs of Kansas City. The common characteristics of all three are local owners who are invested in both the news outlets and the markets where they are located. They have developed business models that stress diversified revenues sources, a laser-like focus on readers’ needs and behaviors, high-touch engagement with the community and trustworthy journalism."

The owner of the Richland Source says 27 percent of its revenue comes from marketing services for "brands throughout the U.S.," and philanthropy (three national funders are cited) provides 21%. Advertising accounts for 35% and 1,100 reader memberships 17%. "On its news side, the Source is differentiating itself by practicing solutions journalism, a rigorous form of reporting that explores both community problems and potential answers. The Source also has adopted tools in which readers can easily submit questions and story ideas," Franklin writes. "As a result, the Source’s website says, stories on the home page are typically about "progress, entertaining events, and the accomplishments of people, organizations and businesses in our area'."

This newspaper produces just
26% of its company's revenue.

Pilot Publisher David Woronoff "is demonstrating how legacy newspapers in mid-sized communities can also transform themselves," Franklin writes. Woronoff "created and acquired a statewide business magazine and four lifestyle magazines – of which three are in the largest cities in the state – that now make up the majority of his company’s revenue. Buying and operating the local independent bookstore provides both new revenue and a way to directly engage with residents in his community. He also established a full-service, in-house marketing agency, and even published phone directories. Now, The Pilot news organization represents just 26 percent of his company’s total revenue." Moore County's population is 100,000.

These and other examples "illustrate how the local news ecosystem in the U.S. has entered a phase of robust experimentation," writes Franklin, senior associate dean of the Medill School of Journalism and director of its Local News Initiative. "At the same time, however, the unabated loss of local newspapers in the U.S. is a shrill-sounding alarm about the urgency to reinvent the local news business model. Indeed, the continuing secular declines in print, combined with high inflation and weakening consumer demand, could further accelerate the loss of local news in the U.S. in coming months."