Amid Spike in Local News Initiatives, Franchise Model Remains Only Proven Method to Scale Local News
Cautionary tales have emerged in recent weeks about the inherent risks of entering the local news industry. Poynter recently called out a few of the pain points that new publishers endure, and Columbia Journalism Review suggested there isn’t enough budget to combat increasing political polarization at the local level.
All these potential pitfalls haven’t stopped several local news networks from launching this past year. These well-meaning projects attempt to fill the information gap in many North American communities, a noble effort worthy of coverage from industry insiders.
But that coverage doesn’t always address exactly how these new endeavors plan to overcome the documented challenges that plagued similar efforts during this past decade. There also isn’t enough industry recognition of successful local news operations until after they are bought out by a larger entity such as Axios Local.
TAPinto, first started in 2008 as an alternative local news source to the status quo, expanded in 2013 to embrace a franchise business model. In doing so, our local news network was able to rapidly scale to now include 90-plus community news websites throughout New Jersey and beyond. That franchise growth has proven more scalable than other local news networks that come out of the gate strong before struggling to sustain.
Why has TAPinto worked where other local news networks failed? The franchise model, now in its eighth year, overcomes many of the pain points that made other efforts unsustainable. Franchisees are often making money their first year with TAPinto, some even in the first month. So they aren’t forced to dig deep into savings to overcome a lack of revenue, a factor that doomed many other local news entrepreneurs.
Even nonprofit models, which have proven successful in some markets, struggle on the business side. That is why the Institute for Nonprofit News recommends that solo journalists team up with business partners instead of tackling new projects. Many TAPinto franchisees have been doing that for years. We’re also not reliant on donations or grants, which are often inconsistent and unreliable.
Much of that money comes from Facebook Journalism Project and Google News Initiative, two funding sources that promise no long-term guarantee for publishers. Unlike other publications, we’re not reliant on two of our biggest advertising competitors to remain solvent.
Fortunately, we didn’t need their grant money, because our franchisee advertising revenue grew by 17% in 2020 at the same time many other news sources were forced to cut back or close. While we haven’t received many headlines acknowledging this financial success, our performance throughout the pandemic proved our franchise model has matured beyond the intermediate growth stage in which many startup news outlets still find themselves.
These newsrooms often resort to collaborating with competitors to help stretch resources, while TAPinto benefits from an internal network of talented, diverse franchisees who can share best practices on both the editorial and sales sides. This built-in collaboration has helped TAPinto grow quickly while mostly staying under the industry radar outside of occasional coverage.
Over time, I suspect our growth will make it difficult to ignore TAPinto’s franchise model as the model that can move local news forward.