We’ve written previously about Axios testing a “local” content model in a couple of cities. As we begin the new year, Axios CEO Jim VandeHei vowed to “bring smart, modern, trustworthy local news to every community in America.” That is something that once upon a time hardly needed to be considered. After all, there were hundreds of local and regional newspapers that had millions of subscribers. And they were chock full of advertising.
The only problem is that was then when print newspapers generated billions of dollars, largely from retail or display and classified advertising. At their peak printed newspapers drove almost $50 billion in annual revenue. Today the entire newspaper business generates less than $9 billion in print and digital ad revenue. That’s right. About $41 billion has just evaporated.
VandeHei is banking that he and the Axios team have an economically viable model to bring a new age version of local journalism to local markets. Today the number of local markets totals 14 and that number is targeted to grow to 25 in 2022 and 100 markets eventually. VandeHei is not new to the start-up model. He helped co-found Politico in 2007 and left Politico in 2016 to launch Axios. In August of 2021, Politico sold for about $1 billion to German media giant Axel Springer.
The Dearth of Local Content
The Axios leaders believe they’re trying to solve a problem, a lack of compelling local content. We’re not certain this is really a big issue. While we do believe there’s probably room for Axios’ content approach — quick and to the point — on a local basis. But it will not be a layup to make it a compelling business success. Here’s how Axios see it making a difference:
- You meet readers’ needs (editors did this extremely well for years before private equity insinuated themselves into the model)
- Put your investment into people, not paper and property (newspapers often owned some of the best real estate in a town)
- Create a new, healthy daily habit – (it will not be one of walking outside and picking up the printed paper)
- Scale-up as revenue rises (this usually means something has to give on the editorial side until the revenues accelerate)
- Spread to smaller cities and towns once the formula is perfected (very difficult to perfect anything in today’s fast-moving world)
Axios believes in order to meet the needs of their potential readers they need to deliver:
- A daily newsletter, written by top local journalists (we all get a lot of newsletters, even from our legacy local newspapers)
- Vital journalism through a clean, focused local website (there are lots of these – think NextDoor)
- Breaking news alerts (presume these alerts will come through our messaging apps)
- Smart guides for schools, real estate, business, and more (we’d expect some very interesting partnerships for delivering real estate guides)
- A new way to find top jobs (no surprise since jobs was one of the top drivers of traditional newspaper revenues)
The Local Revenue Challenge
A couple of takeaways. We have said it before. This is no layup. We wish Axios’ chief business officer Fabricio Drumond luck in scaling revenue from local and small businesses. Interestingly, VandeHei acknowledges this may be their biggest challenge ever. He positions it this way. “Axios Local is the solution, synched elegantly to your smartphone”.