While virtually no newspapers escaped the Great Recession and the mass reader migration from print to online unscathed, local papers have been hit particularly hard. National news organizations like the New York Times and Washington Post, backed by wealthy benefactors, have leveraged their access to capital and tech talent and, with the rise of new business categories like e-commerce and digital subscriptions, are experiencing substantial gains.
Local newspapers, on the other hand, haven’t possessed the agility and innovation needed to thrive in the current climate. Between 2008 and 2014, newspapers cut 14,000 positions, and while some of those jobs migrated to online-only news sites, a small stable of national websites like BuzzFeed and Mashable accounted for most of the new job creation, meaning that the decline of local newspapers didn’t result in a concurrent rise of local news startups.
When I got my start in local newspapers, the companies I worked for made sure we had reporters at every municipal meeting — from the board of supervisors to the school board to the town council. But as newspapers retract and downsize, these types of government meetings are increasingly left uncovered. A Pew Research report found that newspapers across the nation cut their statehouse reporting staff by 35 percent between 2003 and 2014.
Despite this adverse business environment, some local news startups have managed to thrive. One such success story is TAPinto, a network of New Jersey hyperlocal news sites I first profiled in 2014. Founded by a Stanford-educated lawyer named Mike Shapiro, TAPinto started as a single site that covered three New Jersey towns: New Providence, Summit, and Berkeley Heights.
This initial site, for which Shapiro wrote news content and sold ads, eventually gained widespread support and advertiser interest, and he soon decided to scale it to other towns, first by licensing out the brand and then later converting to a franchise model. When I spoke to Shapiro in 2014, TAPinto boasted about 30 franchises, and when I talked to him again this summer he said he had just signed up the 67th franchise — 62 in New Jersey and five in New York.
These days, Shapiro splits his time between maintaining quality control of his sprawling network of sites and scouting out new towns that would be good candidates for expansion. The ideal town for a TAPinto site has at least 10,000 residents and 350 local businesses. More important than the demographics of the town, however, is the person who purchases the franchise. Shapiro ascribes the failure of other hyperlocal news operations — AOL’s Patch chief among them — to the fact that they often hired editors who weren’t closely tied to the communities they were covering. “I meet with what I call connected people,” Shapiro told me. These “connected people” are active participants in the town, whether that means serving on the school’s PTA, volunteering for a charity, or owning a local business. “Eventually I get to people who have the capacity to do a good job and are interested in doing something like this.”
For much of TAPinto’s short history, this meant either signing on a single person or a duo — one to handle ad sales and the other to write the news — but lately Shapiro’s gotten more creative in finding potential franchisees. For instance, in Plainfield, New Jersey, he sold a franchise to the local YMCA. “They partnered with a local journalist who’s doing the content side and they’re running the ad sales side,” he said. “I think this is a really good model to potentially export all over the country. Nonprofits are struggling for funds. Part of a nonprofit’s mission is to give back to the community, so it fulfills their mission, creates a new revenue stream for them, and they’re able to bring a vibrant objective news source to their town.”
Shapiro’s also licensed out franchises to already-existing newspapers; they continue to handle the print product while hosting all their online content on a TAPinto site. He’s even signed up St. Bonaventure University to purchase a franchise. Dr. Richard Lee and Anne Lee, two journalism professors at the college, use the TAPinto site as part of their curriculum, assigning their students to cover stories in Olean, New York. “Eventually they’re going to enlist their business school students to handle the advertising on the sales side,” said Shapiro.
So how does the franchise system actually work for TAPinto? There’s what Shapiro calls a “small annual fee,” which the franchisee can pay off monthly (some of the franchisees are actual journalists who weren’t deep pocketed enough to pay the fee in one lump sum). “And then there’s a revenue split,” he said. “There’s a 90/10 revenue split — they get 90% of revenue and we get 10 — up until it gets to $100,000 in revenue, and then it becomes 95/5.” After that, the only major overhead expense for the franchisee is media liability insurance.
Shapiro no longer runs his own TAPinto sites, and instead much of his focus is on maintaining quality control across his growing network of sites. “If there’s anything that keeps me up at night, it’s that,” he told me. To help him with this endeavor, he’s hired six employees, three full-time and three part-time. Among those are four editors whose job it is to train new franchisees on journalism best practices and to provide feedback and copyediting after articles have gone live.
To get an idea idea for how a franchisee operates, I spoke to Bobbie Peer. Peer worked in the insurance industry for 10 years before she took a break to have children. Her family eventually moved from Hoboken to Berkeley Heights, a town with about 13,000 residents, and as her children grew older she began working for local charity organizations, first as a volunteer and then later as an employee of the local Red Cross. “I was working with high school students in about 10 to 12 towns, trying to help them put clubs into their schools.”
Peer also began working for Shapiro, initially to help him expand his then-nascent network to new towns. But when he decided to license out the Berkeley Heights TAPinto, one of the sites he’d originally run on his own, Peer figured she was exactly the kind of “connected” person he was always searching for. So in 2013, she took the reins and began learning what exactly it is a small-town journalist does. This involved meeting Shapiro and one of his editors and running through the basics of article ideation and creation. “We have a training guide that teaches you,” she said. “It’s also a lot of on-the-job experience. Learning AP style, learning the inverted pyramid, using other articles as a template.”
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There certainly was a learning curve. Peer remembers going to her first municipal meetings and staying up until 2 a.m. writing articles summarizing everything that occurred at them. “Now I know you have to break it into smaller segments and break out what’s important in the meeting. I’m not telling the minutes of these meetings, I’m telling the news of the meetings.”
Like other TAPinto sites, TAPinto Berkeley Heights places heavy emphasis on covering both the local government and the schools. The site drew a lot of attention for its coverage of a controversial land swap between the township and a local church, and Peer made a point of attending every government meeting she possibly could. She found herself writing upwards of four stories a day. “My favorite thing to cover is the human interest side of the news in town,” she said. “We have a teacher that had Stage III breast cancer. We’ve done feature articles about her, and by putting her GoFundMe page in there, we made an impact for her financially by sharing the story.”
At first, Peer had actual competition in the town: a local AOL Patch and The Independent Press, a weekly newspaper that had been covering the area since the 1960s. She would regularly see reporters from each of them at government meetings. “Less than a year after I started, the Patch was gone,” she recalled. “It was kind of ironic, that as soon as I started getting involved on the journalism side, they were gone, never to be seen. The Independent Press closed about two years ago.” It was shut down by NJ Advance Media, a newspaper conglomerate that has absorbed a number of newspapers into its NJ.com domain.
This created an immediate news vacuum in Berkeley Heights, and Peer saw fairly strong growth in both readers and advertisers. She was eventually able to hire freelance writers to begin taking over certain beats. “I’m going to the meetings now because I want to go to the meetings, it’s not because I’m covering the meetings,” she said. “I have writers covering them for me.”
For his part, Shapiro regularly monitors the type of content produced by each site and tries to give gentle nudges when a franchise is falling short on an area of coverage he’s deemed important to the community. “They’re independent publishers, but we know from our model that they should be doing at least some stories on government, at least some on police, at least some on education, sports, etc…,” he said. “I can reach out and say, hey, I’ve noticed you haven’t done any government stories this month, that is a good traffic driver. You’re an independent publisher, you don’t have to do government stories, but if you want to build up your traffic, that’s one way to do it, and the franchisees are very receptive to that kind of approach.”
I asked Shapiro if he thinks the TAPinto sites have served as effective replacements for the newspapers that have either closed or drastically reduced their staff and coverage. “You have robust coverage of your local government and your board of education,” he said. “It’s only anecdotal, but we’ve found that towns that have a TAPinto site hold more competitive elections; there are more candidates that run. I think part of the reason behind that is because of the fact that people know what’s going on, versus towns where they have no idea what’s going on because nobody is reporting on it.”
TAPinto sites collectively generate about 2 million pageviews and draw in 850,000 unique visitors each month. Most franchises, Shapiro said, reach profitability within a year, and when a franchisee wants to give up on the project or move away, they’re usually able to sell their site within a six-month window.
The model seems to be working well in New Jersey, but can is it replicable in other states? Shapiro already has plans for expansion, and he said he hopes to see a nationwide network of TAPinto sites. “I can tell you that in late Fall, we’re going to start launching sites down in Florida,” he said. “There are a lot of New Jersey transplants down there. And there are a lot of communities like the communities in New Jersey where we started TAPinto.” He said there are only 20 to 25 New Jersey towns left that he wants to launch sites in. “Which means within the next two years, I’ll basically be done in terms of prospecting in New Jersey.”
The question is whether Shapiro can continue to keep the overhead low and maintain quality as the network continues to expand. One criticism he often levels at AOL’s Patch is that it suffered from too much bureaucracy and didn’t form strong enough connections in the towns and neighborhoods it covered. TAPinto’s continued success will hinge on whether each site, no matter the location or the population it oversees, can maintain a bond with the very community members it hopes to serve.
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