I don't think anything is that secret about their business model. You see this same model with legacy enterprise software and other long tail recurring revenue soures. You largely give up on growth, but drop costs to near zero if you can and buyout based on the tail that will stick for a while.
There are often hyperbolic claims that these local newsrooms would be making tons of money if only an investor came in who understood business - but the newsrooms never seem able to find that investor. Employee buyout efforts also have fallen flat, efforts which are driven by I think very clear views on what Alden will do (cut costs!).
Separately, not all news has fallen - Wall Street Journal has to be making good money off their subscription and print product, they've taken a bit more of a middle of the road path relative to other media. NY Times and Washington Post also probably doing OK for various reasons.
There is a real need for local news however, desperate, and ideally not the hard left / right type stuff that seems to emerge on social media.
The NY Times, Wall Street Journal, and Washington Post have all adopted partisan baiting techniques to draw in subscribers. (IMO, they've done so in that order, with Washington Post the most extreme, and NY Times bringing up the rear but quickly closing the gap as they've cycled out their older reporters with younger ones the past few years.) Their actual news reporting has suffered considerably, though they're such large organizations with enough veteran journalists that they do still put out some good pieces somewhat regularly, especially relative to newer media and smaller media.
As a long time reader of all three I don't disagree. I did think the NY Times and WaPo were pretty much equal in the kind of partisan baiting stuff (note I'm a dem donor but tired a bit of the sometimes comically bad "news" slants). Even though I'm left on the issues I've been enjoying WSJ though I skip opinion section / a bit less raw clickbait type writing. Still vote for the left - but I think it probably could use a somewhat mellower set of media bubbles - but maybe the market is just not there anymore.
WSJ's reporting is very good but their editorial board is maybe the most off-kilter in the entire industry; like 1/3rd of their op-eds are asking why the Supreme Court won't take up a case to allow employers to bring whips to the office.
You’re mistaken if you think this is new. Just the other day I was reading an old NYT piece suggesting Thomas Edison be hanged for inventing too many things (such as a sound amplification device which they imagined would be in common use on the street and in restaurants.)
And as you got into even smaller markets, local newspapers and reporting was always a shaky business. My town had a rather good local paper for a number of years but it was pretty much a labor of love and the publisher became ill and it shut down. Now, it's hard to find out about just about anything going on in town outside of Facebook and Nextdoor.
You see this same model with legacy enterprise software and other long tail recurring revenue soures. You largely give up on growth, but drop costs to near zero if you can and buyout based on the tail that will stick for a while.
Sure, it's a dynamic that makes a whole bunch of things terrible. Local news indeed has lost money-making potential and this approach makes sense economically. But the dynamic you describe essentially "zombifies" a whole bunch of enterprises, which in turn makes them fragile and we can see the results today.
And yeah, it's not shortsightedness on the part of a single investor, it's shortsightedness on the part of this society.
> I don't think anything is that secret about their business model. You see this same model with legacy enterprise software and other long tail recurring revenue soures. You largely give up on growth, but drop costs to near zero if you can and buyout based on the tail that will stick for a while.
Just because it's common doesn't mean it's OK. You destroy sometimes perfectly viable businesses and abuse their loyal customers, just for a quick buck.
The way I see it is that journalism is an essential service, ans—in the American brand of capitalism—essential things have to get exploited for billionaires to 'win' at their 'game' (be it services, infrastructure, or people).
Maybe we should treat mega-wealth as an addiction, instead of fawning and celebration.
Looks like Alden is a fund that just capitalizes on the fact that people are very slow in cancelling their subscriptions. It's nothing to be proud of and fittingly their website doesn't provide you with any information about the fund or the team. But ultimately they just accelerate an inevitable change in the business model of journalism.
One model that counter-intuitively may work is the Open Source model. For example, I'm the CEO of the D Language Foundation. I take no salary from it. Sometimes I'll get a paid gig for things like training or a special project.
Most contributors are in the same situation.
We do have corporate contributors. Their help enables us to have a staff of paid people, and defrays other costs like cloud fees.
The web site has some affiliate Amazon ads for programming books and D swag, and we acknowledge our sponsors, but we don't have paid advertisers.
The software we make does not present any ads or do any telemetry of any sort.
And yet it all works, and has been for 20 years now. Simply because we like what we do for its own sake.
Consider that for anyone wanting to start such a thing for local news, the barriers to entry are really, really low.
>Consider that for anyone wanting to start such a thing for local news, the barriers to entry are really, really low.
You're effectively talking about blogs, "twitter journalism" and freelance journalism of the type you might see from Forbes. It is, by and large, crap and incomparable to the kind of journalism that dedicated professionals used to provide before cable TV ratings and algorithms destroyed the incentives.
There's still several big differences. It's not so difficult to filter out good programming languages from poor ones - the barrier to entry is still fairly high on both sides of the equation (production and adoption) and thus quantity of new languages is low. Even creating a bad programming language requires a certain degree of skill. Further, programmers have a much higher qualification to judge programming languages than the average person has to judge the quality of their news, which could span every possible topic.  And lastly bad amateurish programming languages can be ignored. They have little consequence on the whole of society.
None of this is true for poor quality or fabricated news. It's easy to produce  and trivial to consume and share and thus it is everywhere, it encompasses every subject matter and thus nobody is well-qualified to judge a significant fraction of it, and the desire to believe in fabrications that align with one's own beliefs is wildly stronger than the desire to strongly commit to learning a new programming language.
> It is, by and large, crap and incomparable to the kind of journalism that dedicated professionals used to provide before cable TV ratings and algorithms destroyed the incentives.
Print media consolidation and cost-cutting did that before cable news rose to prominence (people were complaining about it at least as far back as the 1980s), much less online media and its algorithms (which, anyway, optimize for exactly the same thing ad-supported media has always optimized for.)
Wikipedia is exceptionally good at providing an overview of large and complex stories, especially those without a group or interest advocating for a specific narrative.
It does less well in other areas:
- Covering corporate dealings of substantial companies, especially those which can either drive or suppress specific narratives.
- Similarly, political stories of a similar nature, especially by powerful or oppressive regimes.
- Generally, the "BLP problem", biographies of living persons. Here, Wikipedia tends to bend over backwards in not crossing live wires or contentious points, though it may do so where sufficiently credibly sourced references exist. Note that this is frequntly predicated on an indepndent press, both in the tradititional sense and in the sense of "independent of Wikipedia itself".
BLP also suffers from the partisans / advocates challenge (as well as the opponents / enemies one).
None of these problems are exclusive to Wikipedia, and they've long been an issue with both encyclopedias and newspapers. Commercial, advertising-supported newspapers have their own biases, but they've also long had an ancillary function of affording legal cover and protection to their journalists and publishers, a capability that a strictly volunteer effort would lack.
Wikipedia's other weakness is in providing consistent and sufficient coverage of small and local concerns. I've noticed this in the case of Covid-19 coverage, something which the site does an excellent job of at large scale, whilst many individual country pages have badly outdated and inaccurate information. Filling in the holes and small details is something Wikipedia does quite unevenly.
As a sole source of local small-town news concerning business, politics, crime, and culture, I suspect the Wikipedia approach would prove badly lacking.
The emerging news landscape seems to manage with the big picture. It's small and local news that are most neglected.
Journalism has a very short shelf life, and can be costly to produce. Remember, what you read as a consumer is only the end product, there were a lot of calls, interviews, etc -- and those can be costly. You could have a reporter sitting at a city council meeting, for example, for four hours - -and have nothing of value to publish. Or a ton. You don't know.
Beyond that, corporate contributors end up looking more like NPR than open source -- while a company might be based entirely around a DLang codebase, that doesnt really happen with news. So there are underwriters, but it looks more like either donations or advertisements.
"Some skeptics said that this other, completely unrelated kind of project couldn't be funded using this model several decades ago, and they were wrong." isn't a compelling argument.
The GP post actually pointed out several differences between journalism and programming language development, and they seem pretty important to me - so unless you actually address those points, it seems safe to assume that you're comparing apples to oranges.
For one thing, aspiring journalists would want to contribute to it to "build their brand". This motivates lots of contributors to Open Source, Wikipedia, and Stackoverflow.
There are many tells for fake news. One, for example, is citing anonymous sources. Another is inventing a trend out of a single data point. One tell I use is when the journalist uses hyperbolic words, and clearly opinionated words like "bad".
> isn't a compelling argument.
Of course. Until somebody does it anyway. My entire career is based off of doing things everyone told me would never work.
If any newsroom brass is reading this (or independent reporters, especially local) -- I'd love to talk. We're building a platform to help monetize journalism outside of the usual predatory social media/aggregator set up.
> In one sentence, what is your primary source of revenue expected to be (aside from VC funding if any)?
Freemium model: advertisement based, with a subscription fee for some extra content personalization.
> Do you intend to sell or operate personalized advertisements?
Not "personalized" the way that you are intending. At the moment we do fall back to programmatic bidding ads like AdMob by default, but the general idea is local based ads. Since its local news, and we know your locale, we sell to local businesses -- it's essentially the same "targeting" that your local newspaper has been doing for the last 100 years.
> Do you intend to sell anonymized (or not) customer data as a revenue source?
Substack is great for people who already have an audience, or when you write analysis or opinion; it doesn't really work for a team of people covering hard/spot news. It also isn't real time -- so it doesn't really work to cover things _as they are happening._
We're building a network of local journalists, along with others in national verticals. The incentive structure exists in a way to promote news people want to come back to read, not clickbait headlines, divisive or anger driving hot takes, or lowest common denominator coverage. All geared to 18-34 year olds, who are less likely to consume local news in the traditional forms, like subscribing to a local paper or watching broadcast TV.
How are you going to reconcile "promoting news people want to come back to read" and doing things in real time? One major problem with the news industry is that they are incentivized to be first instead of correct.
(edit -- deleting earlier comment and moving here as a reply.)
This is one of the reasons we're really focusing on local first -- unless you're in a handful of American cities that still has a thriving local press corps, the question isn't really who is first, it's who is covering it at all.
Beyond that, we're trying to move away from the traditional formats that somehow migrated from the print and broadcast worlds online. When you write an article, you have to have all of the information together at once; of course, that's rarely how the reporting process works. By posting it as reporters get information, and as they're comfortable reporting that information -- it not only can get to the consumer quickly, but we hope it can also eliminate some of the mystery behind why a journalist is reporting what they are reporting.
>the question isn't really who is first, it's who is covering it at all
As you get to smaller cities and even towns, I'd argue that weekly is probably fine for frequency and allows for coverage of what is actually important. Of course, online extras could cover more urgent things.
The overall economics are still an issue of course, but do people really need most local news RIGHT NOW? Of course, there was a point in my life when most of the news I consumed came from reading Time Magazine every week.
The urgency question is a big deal. Of course, some things theres a resounding yes -- the path of a tornado, for example, or even to know about a community board hearing about something you may feel strongly about.
But then of course, theres the other stuff. Stuff that you might want to know about over the course of the week. The great part of the Internet now is that there doesn't really have to be any delineation between the two; we don't have to go to press. We can post what we need to when we need to, and of course push notifications/etc for the really urgent stuff.
Yes, he has done a really great job with Popular Information.
Still -- a few fine points on this:
- He's covering topics of national interest, which is very different than local when it comes to subscription numbers.
- To that point, "Twitter continues to be the biggest driver of newsletter signups." We've seen that it can be incredibly difficult for local news to trend on social media, namely because -- by definition -- it appeals to a limited audience.
- By being investigative only, it means he can choose what he is willing to cover. Investigative reporting is incredibly important, but it can be very different than replacing local newspapers -- while they can do investigative pieces as well, so much of what they do is covering the events around their coverage area. That takes a team of people, because you cannot be everywhere at once.
- He has a big name. True, he might not have been famous when he started, but the article itself points out that he was able to gain coverage in Wired because what he was doing was such a novelty. Now, the headline of the Substack you linked to doesn't even need to include the name of his newsletter, his own name is so well known.
You could tell a similar story about vulture capital in many other industries. So it makes me wonder: what value to society do these practices provide? Would there be any great loss in making these sorts of actions illegal? (Of course, good luck distinguishing between genuine attempts to save failing businesses and vultures…)
What do you mean by 'near-worthless'? A small radio station that provides connection, information and entertainment to a rural area and a handful of jobs for community members might be "worthless" in the sense that it wont create massive returns for an investor but that doesnt make it worthless to the community it is a part of.
The problem is these vultures come in make false promises about supporting the station and then suck it dry. In the end the vultures walk away with a tidy profit and the community is worse off.
Just because we cant quantify the value of something in terms of hard currency doesnt make it worthless.
I believe that by "near-worthless" they mean that a given company is hemorrhaging assets and basically about to fold. A business that continuously runs net negative has to close at some point without an external influx of capital, after all.
The alleged theory goes that since without the help of some fund such a company is going to fold anyways, the fund can't really do much worse than the alternative, so might as well let them have a shot at repairing the business and rescuing it. Sometimes they're successful, sometimes they're not.
Yeah I’m deeply tired of every single human endeavor’s existence being solely judged on its ability to provide returns to shareholders. Wish we could just nationalize stuff that people like which doesn’t generate profit. I sort of used to think that was the point of the state but I live in the US where the government is just a entity to provide contracts to corporations.
I used to buy ads on denverpost.com before Alden bought them.
Then the site because the largest piece of hot garbage ever.
I don't know who in the world would pay for ads on there anymore. any visitors they do have probably wouldn't even see your ad since there are like 4 layers of ads on top of each other, with multiple embedded auto play videos and outstream ads blowing up my laptop fan. PLUS they even fire inline ads on paywall impressions which makes them un viewable!
Basically the opposite digital media approach as NyTimes and others who focus on high quality impressions and subscriber revenue. But people are still paying for impressions so I guess it works.
* I personally like the Axios model of a high quality ad for high quality audience + they are trying to sell their own software for additional revenue.
It is so crazy to me that Americans seem like the most patriotic people on the planet (but I'm American, so maybe I am missing things) BUT...
... given the choice of buying something local or from Amazon (that comes from China) if it costs $1 less, Americans will almost always go for the Chinese merchandise, or shop at Walmart to save a few bucks.
.. given a choice between news that is written by locals, or a newspaper as described in the article, where they outsource the design work to the Phillipines, at least a large percentage of Americans will simply go with the better designed one, and never question the messenger.
Americans are a very confused tribe, in my opinion, and I say that as one of them.
As a foreigner, who has lived in the US for ~9 years, I can say that I mostly admire the "sane" patriotic spirit that most Americans have ("not sane" would be the racist, xenophobic type, which I instead condemn).
Your points about where money is spent still stands; but I don't think it makes Americans less patriotic.
You might also be true that they are "a very confused tribe", but rest assured that most people in the world think the same about their people.
Americanism is liberalism in the classical (Lockean) sense: individualism above all. This trumps our sense of patriotism/tribalism/nationalism/collectivism at almost every turn.
In America, individual opinions are sacred proof of mind and soul. Being part of an intellectual consensus is frowned upon, because it suggests you aren't thinking for yourself. Americans do not value consensus, and in fact tend to value discord and disagreement--because it implies the existence of multiple differentiated individual opinions. That's why everything is polarized. It's a feature, not a bug.
It's easy to observe: most "Republican" voters aren't really enthusiastic members of the GOP, they just hate the Blue politicians more than the Red politicians. Likewise for the Democratic Party towards the GOP. "Red" voters are actually "not-Blue" voters.
So of course Americans will buy the cheap imported product. It's in their individual microeconomic interest, and that matters far more than any political or national interest.
My point is that reducing American cultural discontent to "tribalism" disguises the fact that Americans are perhaps the least collective-minded population on the planet.
It wasn't always this way. Walmart used to proudly display banners with 'Made in America' on them.
But as companies county, the poor and then the middle class downsized as well.
Companies left looking to lower costs, the public was wooed with lower prices and the idea that you could get more now and the politicians made promises that the affected sectors would be retrained, first we would have a service economy then it became knowledge workers.
It turns out that the service economy is fickle and doesn't pay well for the most part. Not everyone can be a knowledge worker and that is not outsource proof either.
Now we are in a trap where companies can not return because they would have to raise their prices and reduce profits and the people who used to work for them can't afford to buy their products now.
Yeah, everyone wants dollar stores but forgets that they only exist because of exploiting foreign labor. If we made the same garbage here, it would cost a lot lot more. And eventually, this will be done via automation and the jobs will disappear over there too.
We don't like to think about how other people are treated and have somehow convinced ourselves that we deserve to be treated better because they "don't have to do the crappy job". And this isn't just overseas. Look at the Nabisco and Kellogg strikes; I didn't see mass protesting going viral online and people refusing to buy those products. I'm sure people who know someone directly affected were more likely to boycott. It is sad that we are such a selfish species and have completely lost all empathy.
> Americans will almost always go for the Chinese merchandise, or shop at Walmart to save a few bucks.
For a majority of Americans, saving "a few bucks" makes a huge difference - that could be the difference between being able to buy $5 worth of gas they need to go to their next shift.
If you don't mind me asking - how much money (ballpark) can you spend on an impulse purchase? For some its single digit dollars, others tens, hundreds or thousands of dollars. When there's a difference of 3 magnitudes or order between people, the other's purchasing habits can seem alien (in both directions).
Unbridled capitalism doesn't inherently optimize for the long-term stability of the entire system - instead, it is mostly a bunch of local maximums.
This hedge fund is the second biggest newspaper owner in the country but the founders supposedly rarely show their faces in any newsroom, make no public statements, and one of them hasn’t even been photographed since the 80s. There’s also an implication that they are deliberately destroying the papers for the sake of short term profit, but the business details are a bit sketchy.
It's a smear piece. There may be some truth to the characterization of people behind the firm, but as a reader it's impossible to know given the animosity of the writers towards their subjects.
They claim the vulture capitalists are destroying local news for the sake of profits, while the vultures claim they buy businesses on the brink of destruction and attempt to update their business models/salvage something. The article doesn't delve into the actual economics of any of it, however.
I've seen it happen once or twice in Chrome. IIRC, it was when an overlay element (newsletter or paywall prompt) was removed, but an invisible <div> that blocked scrolling was left behind (it would usually be removed when the prompt was dismissed).