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March 29, 2024

New San Francisco Independent News Site Unsettles Status Quo

Important Details:  San Francisco financier Warren Hellman has announced one of the most ambitious independent online news start-ups. He’s putting up seed money of $5 million with plans to hire “dozens of journalists” to cover the news in and around San Francisco. Hellman has been meeting regularly with many people in the Bay Area — from Mayor Gavin Newsom to former San Francisco Chronicle editors to Newspaper Guild representatives — for more than six months, arguing the pros and cons of hybrid print/online products and how best to organize a new news organization.

His announcement, while still sketchy on numerous details, includes two intriguing partnerships. One is consummated, that of a working relationship around reporting, distribution and promotion with public broadcasting station KQED. KQED radio is the second strongest public radio station in the U.S., and it (like Twin Cities’ MPRNews and Boston’s WBUR) is beginning to transform its web presence, moving from an extended programming guide to a full-blown local news site. The second is an in-process partnership with the New York Times, as Times moves on strategies to better serve and exploit regional audiences and advertisers.

Hellman’s initiative follows closely on the heels of the just-launched California Watch. An initiative of the OaklandBerkeley-based Center for Investigative Reporting (CIR), California Watch began operation in summer, hiring eleven full-time journalists (alums of  Des Moines Register, the L.A. Times, the San Diego Union-Tribune and Milwaukee Journal Sentinel, among other daily papers). It published its first big series in September, on homeland security spending oversight (or the lack thereof), both on its own site and through more than two dozen news outlets — including the state’s top papers. All told, the series reached almost two million readers in print and many others online.

California Watch is funded, for about three years, on foundation grants. For the first series, it charged participating newspapers a modest sum of several hundred dollars or less, and is now evaluating both the kind of journalism, the amount of customization and best fee structures going forward.

Implications: Like soldiers released after a war, laid-off and bought-out journalists are on the prowl for new work. Foundation funding is beginning to provide it, though dozens are being hired compared to thousands let go.

One big question for daily publishers is whether these foundation- and angel-fueled news initiatives post threat or promise.

The answer, Outsell believes, is both.

The promise is great, and right in line with the necessary and big push to radically reduce the cost structure of legacy newspaper companies. Although many companies have already cut a third or more out of their cost base over the last three years, they are still heavy with expense, much based on the physical printing and distribution needs. They still need to economize wherever possible.

So the California Watch notion — and expect it to be replicated elsewhere — is a godsend. High-quality journalism produced by top professional journalists and offered at pennies on the dollar in cost, compared to having to pay salaried staff to produce it. Essentially, the cost of news production, here, is being shifted, with others paying and newspapers using their impressive brands and reach to provide distribution. It’s not surprising that newspapers throughout California answered CIR Executive Director Robert Rosenthal’s question of what California Watch could do next for them with a collective, monosyllabic reply: “More.”

If California Watch offers opportunity, start-ups that bypass daily newspapers may well prove to be a threat.

Take the new San Francisco initiative or numerous other start-ups around the country. Whether non-profit or for-profit, they’re doing competitive journalism. Importantly, they’re finding non-local newspaper partners to get to scale, whether joining with public radio stations, commercial TV stations, or figuring out new partnerships twists with the New York Times. To the extent they succeed, they represent real competition to daily newspaper companies for readership. With time-on-site languishing at many newspaper sites, and hovering in the 5-12 minute per month range, they’re vulnerable to the new, spirited competition. In releasing so many soldiers of journalism into the field, they are emerging from the recession diminished in strength and finding unexpected local competition.

So, as post-recession plans are laid, it makes a lot of sense for newspaper companies to encourage the California Watch model specifically and to redouble their efforts around local aggregation and partnership (Outsell Insights, “Newspaper Sites Re-Knit the New Local,” Sept. 1, 2009), making new friends before they turn into significant competitors.

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