Newsonomics: Denverite Launches as First of Would-Be Nationwide Digital-Only Local News Chain
Today, the news landscape in Denver gets just a little more crowded with today’s announcement of the launch of Denverite, about a month away.
Denverite is part of a larger, if still tiny, local news reinvestment trend, but it is its lineage — both in funding and in thinking — that compels our attention.
Three New York City-based investors have plucked Denver (with a metro population of 2.8 million) out of the U.S. urban landscape to test a new digital-only city news model. If Denverite hits its marks, the start-up troika of Kevin Ryan, Gordon Crovitz, and Jim Friedlich say their target expansion could include “markets four through 20” in metro population size. They say they’ll test out Denverite for nine to 12 months, and then proceed with other cities, if the plan works. “At that point,” Ryan told me, “it could be one or two more or it could be five.”
“I see very few cities with a publication that I say, ‘Oh, my God, I don’t want to compete with that,’ but we won’t get to every city.”
With dreams beyond Denver, the threesome’s goal is to impose a new business model in a sector that’s all but been left for dead. As I’ve detailed in recent reporting on Gannett’s hostile play for Tribune, Gatehouse’s buying up of multiple dailies and Digital First Media’s unending winnowing of newsrooms across the country, the newspaper industry’s dominant strategy is simple, if depressing: cutting costs, often massively, to reduce losses, with often disastrous results for local news reporting.
Against that landscape, Denverite plans to launch in June with an editorial staff of 10, headed by 33-year-old Dave Burdick.
That staff will aim, of course, for the smartphone.
“We want it to be feel like the ideal social stream for Denver,” Burdick said, describing something more like Vox on the phone than a newspaper smartphone site or app.
Or as Burdick puts it: “All the information people in Denver need, wherever it came from.”
“It’s a big city, and we don’t feel like we own it—we just know what matters. We’ll be pointing to everything we think is worth pointing to in [greater] Denver,” he said.
That’s where the aggregating of other local stories comes in. It is astounding, in 2016, that few markets sport any kind of well-done local news curation. That’s a big opportunity, if properly executed.
How much original coverage and how much curation?
“To a consumer, it will look like there’s a lot of curation and aggregation,” Burdick said. “On our side, it will look like more original reporting and writing, and a bit of curation and aggregation.”
Burdick leaves his post as deputy features editor at the ever-shrinking Digital First Media–owned Denver Post, which just suffered another 20% cut to its newsroom staffing, after long-serving editor Greg Moore quit in frustration. Denverite will first produce a newsletter in June, to be followed by a website and responsive mobile app by the end of the month.
The three founding partners in this venture still haven’t picked a name for their parent company, the idea for which grew as the carnage of the daily news business mounted over the last year. Name aside, the model here is crystal clear: a local Business Insider.
The BI Model, and Its Lineage
It is that BI model – fast audience growth built heavily on news aggregation and targeted original content, with traffic multiplied by social sharing – that informs this new local strategy.
After all, Business Insider was sold to Axel Springer for a cool $400 million-plus last year, a big cash-out – and, the investors believe, a proof of concept.
“You have to think online-only,”Kevin Ryan told me Monday, one key concept in leaving the reshaping of the legacy newspaper world to others. Beyond Business Insider, Ryan’s start-up experience is wide. That digital business learning includes the Gilt Groupe (fashion), MongoDB (software), Kontor (office interior design) and Zola (online wedding registry), as well as ad tech leader Doubleclick, where he served first as president and later as CEO from 1996 to 2005.
Like the early BI, Denverite focuses its attention wholly on building the right product to find the right audiences. No advertising will be sold for the six months, with a Business Insider business model of advertising–events–digital subscriptions now on the drawing board for 2017 or later. In fact, Denverite won’t have any other staff besides its journalists at the outset. Burdick and company will be responsible for the tech the site requires —“I take pride inbeing an editor in chief who has been writing a lot of CSS [code], he said — and for understanding early audience dynamics.
Crovitz added his philosophical take on that staffing.
“We wanted no separation between product and journalism,” he said.
Ryan, who founded Silicon Alley Insider (later to becoe Business Insider) and hired CEO Henry Blodget, will chair the board of the new company. The man dubbed “the godfather of New York tech” found editor Burdick via LinkedIn.
Crovitz and Friedlich serve as the two other founding investors and board members. Friedlich points to the advantage the partners have, given previous experience working together. “We’re close-knit and aligned.”
Gordon Crovitz, the recovering journalist of the group, sets a lofty — and much-needed — editorial aspiration for Denverite, and whatever will follow.
“We want it to have some voice, some tone, some wit,” he said. Amen to that, as tough as that quality in both original work and curation will be to build and sustain.
Leaving his job as Wall Street Journal publisher at the end of 2007 in advance of Rupert Murdoch’s purchase of Dow Jones in 2008, Crovitz has built a second career as an investor and director of numerous publishing companies. His LinkedIn profile shows that breadth, developed over the last decade. With business partner Steve Brill, he co-founded Press+, which set the foundation for mass adoption of digital paywalls across the U.S., and now, post a couple of sales, forms a major part of paywall tech leader Piano Media. Crovitz currently sits on five boards (Houghton Mifflin Harcourt, Dun & Bradstreet and Marin Software, venture-backed Blurb and the Business Insider board, on which he has remained a member under Springer ownership.)
He said he “expects to spend most of my time with Denverite.”
Together, along with Craig Forman, Crovitz and Friedlich run early-stage news/info investing Next News Ventures, which has invested in notable start-ups Skift, Nuzzel and that one runaway success, Business Insider.
Friedlich, now CEO of publishing consultant Empirical Media (where Jack Griffin had served as his partner before becoming Tribune Publishing CEO), and Crovitz first worked with Kevin Ryan in 1999, when he served as the head of DoubleClick. As executives running Dow Jones digital build-out, the duo signed up Dow Jones to become the first client for DART for publishers (now DFP, a part of Google and the world’s leading ad server). Ryan would later ask them both to invest in the seed and subsequent rounds of Silicon Alley Insider, which later became Business Insider.
What the Denverite Will – and Won’t Do
Dave Burdick is a Coloradoan who grew up immersed in printed newspapers. Combined, his parents represent decades of newspaper management experience.
Bob Burdick put in 37 years at newspapers across the country, mainly as a top editor. Ten of those years were spent in Colorado, at both Denver dailies and in Colorado Springs at the Gazette, from which he retired as publisher ten years ago. His mother Patricia Burnett put in 26 years, mainly as an executive editor in posts from Boulder to southern and northern California.
What will his staff looks like?
“These are people who fit my description. They’ve worked at fairly large organizations.” Being politic, he added, “people who are occasionally bumping up against what they can do in that context.” That staff will work beats as traditional as sports, but also borrow from Quartz’s obsessions beat structure, which Burdick considers a model.
Eight of those 10 newsroom staff have been hired, largely away from Denver-area dailies and other publications.
That staff is getting in on the ground floor; they will have equity arrangements. First-year-costs of this enterprise will run about $1 million. Figure that the investment would run into the several million-dollar range, if Denverite follows the trajectory its funders hope it will.
Their coverage is intended to be both serious and practical.
“Sometimes that’s a fire that has traffic backed up or closes a restaurant for a couple of weeks, sometimes it’s a clear, on-the-ground explanation of how a huge real estate development project will change a neighborhood and sometimes that’s a life-hack for Denver commuters or parents,” said Burdick.
Prior to his three-year stint at the Denver Post worked for the Huffington Post (as green editor) and several Denver area publications. It’s an early stint as a stand-up comedian and comedy writer that may offer the improvisational skills required for city journalism in 2016.
Where Will Denverite Fit?
Call it the new hot category of 2016. Forget – for a moment – the massive cratering of the daily newspaper business, as print ad revenues drop by double digits in the first quarter and layoffs and buyouts continue uninterrupted. We can mark this year as the year of city news start-up enthusiasm. The investments are relatively small, especially when compared to the loss of hundreds more daily journalism jobs from coast to coast. Yet, the investments are real, and diverse.
Denverite joins the expansion of Jim Brady’s Spirited Media into Pittsburgh, extending across Pennsylvania the Millennials mobile model of Philly-based Billy Penn. Noteworthy in that expansion: the $2.6 million investment of U.S. newspaper leader Gannett in the company, to enable the growth. In North Carolina, bootstrapped start-up Charlotte Agenda just announced a modest effort to duplicate its own Millennials model in Raleigh. Both expansions mark the localization I’ve noted (“The Millennial Gold Rush Goes Local”) of the huge national next-gen hug given the 19-35 age cohort by Vice, Vox and Buzzfeed.
Denverite borrows from some of the same thinking, but says its ambition is greater, to include the next pig through the python, but also a wider, older audience. But yes, it loves Millennials (who in business doesn’t?), and Denver has lots of them. The Mile High City (pre-pot legalization moniker) sports the fifth highest concentration of Millennials in the country, about one in six of the total local population.
Where do these newer sites fit into the tortured history of local online news start-ups?
Whole treatises can – and have! – been written on the difficulties of local news startups. I won’t delve into that history here. Suffice to say, though, that AOL’s Patch disaster (yes, I know it’s still operating, but at a low level) reinforced the sense that there was no there there in the digital-only local news business. Forget that the Patch model, and execution, was flawed; that’s the takeaway observers took.
At the same time, such journalistic stalwart locals as MinnPost, Voice of San Diego, Texas Tribune and The Lens each and all have figured out ways to produce good volumes of worthy “accountability” journalism, largely with non-profit funding. All were founded in the first decade of this century. They serve as models of what can be done with such funding and surpassing determination; we haven’t seen many new ones of significant scale in this decade. Consequently, news poverty expands across the metros of the land.
GoLocal24 aims to build itself out a small chain, though it has had stumbles in its second market, Portland, after its greater traction in Providence, and in Worcester, Mass. The company recently announced the acquisition of a small site in Newport, Rhode Island.
To be sure, there are many worthy local-local news operations, built and maintained by a couple to several people, journalists, with great determination to spread in a little sustenance in the increasing news desert. Michele McLellan of Michele’s List can count almost one hundred of them, and their work deserves recognition, even as the scale issues affecting local journalism still consume us.
Against that history, what makes Denverite’s founders believe their model will succeed? It’s that BI model to be sure, but also a sense of timing. In part, it’s undeniable that this company aims its new business plan into the eye of the unending newspaper storm. Have these dailies, slowly dying in many cities, left a vacuum to be smartly exploited?
Though Denver is among the top five fast-growing cities in the country, its loss of local news production has been epic.
In 2009, E.W. Scripps closed down the legendary Rocky Mountain News. Today, the remaining Denver Post can barely see its shadow. Subject to unrelenting cost-cutting by owner Digital First Media, the Post now will count a few more than 100 journalists, down from a height of about 300 in 2008. Top editor Greg Moore resigned in March, in frustration.
Of course, even Denverite’s presumably spirited staff of 10 can‘t compete with the traditional cover-everything mission of the metro daily newspaper, as its founders well recognize. Yet, with a staff of 10 – originating and curating – Denverite has a chance to make an impact in Denver; Kevin Ryan makes the big point that three to four editorial staffers is insufficient to make a big enough local impact.
Ten becomes an interesting number, in local news start-up land. Certainly, such enterprises will need more – into the dozens – if they are to supplant local dailies as go-to news sources. If this model should catch lightning in a bottle, and get to those dozens of staffers, bolstered by the synergies of a national chain, this new company could re-write some history. That’s way too many ifs though to burden this one experiment. In the meantime, Denver gets more local news coverage, and that’s – fundamentally – a good thing.
