A new year brings new opportunities for local media companies to evolve and thrive. Our staff of experts at Local Media Association and Local Media Foundation offers ways to seize 2023 with new innovation, sustainability, and transformation in mind.
Responses to five key questions come from our executive team including CEO Nancy Lane; Chief Operating Officer Jay Small; Chief Innovation Officer Frank Mungeam; Chief Content and Collaboration Officer Andrew Ramsammy; Director of Business Strategy and Partnerships Penny Riordan; Meta Branded Content Project General Manager Julia Campbell, and Director of the Local News Resource Center Emilie Lutostanski.
When it comes to reinventing business models for news, what does the industry need more of in 2023?
Nancy: More leadership. More diversity. More passion. Our LMA board chair, Catherine Badalamente, CEO of Graham Media Group, is a perfect example and role model for the industry.
Jay: Focus on the customer in all products and services, across the board: Make it easy to buy advertising and interpret results. Make it easy to subscribe and manage a subscription — even to cancel! — and explain why it’s important and worthwhile to pay for news and information. Make it easy to donate or manage recurring donations to support journalism projects, then thank donors and show them the impact of their contributions. “Focus on the customer” may not sound like reinvention, but it is because too few companies do this consistently well.
Andrew: There are parts of our media and journalism that need to coalesce. Many of these pieces are systems that work behind the scenes that drive our industry forward, which are primarily focused on digital transformation and infrastructure. The sharing of services that drives behind-the-fold operations will allow for publishers to maximize their technology investments. But this will require publishers recognizing that 90% of their needs can be met through shared-managed-services versus bespoke solutions which are unsustainable and costly.
Penny: More collaboration. We have seen that news organizations are stronger when they share knowledge, and participate in cohort-style learning programs such as the Lab for Journalism Funding, the Branded Content Project, or the Meta Reader Revenue Accelerator. Collaboratives are often the only places where nonprofits, for-profits, broadcast groups, and all types of media companies interact with each other. We have seen big revenue success with Word In Black and News is Out because of the collaborative approach of the projects. I hope more news organizations look for a collaboration that is right for them.
What are the biggest revenue opportunities for local media organizations in 2023?
Frank: It’s obvious that climate change is a global threat to our quality of life. But thanks to incentives and investments passed in the Inflation Reduction Act in August 2022, there is also an unprecedented opportunity for new revenue around green initiatives. In our LMIA report, we detailed the key manufacturing and construction job opportunities in the fast-growing green economy; and the consumer incentives and rebates for greener homes create significant local advertising opportunities tied to installation or upgrades for solar, heat pumps, induction stoves, weatherproofing and electrical upgrades.
Julia: Content marketing continues to be a big opportunity for local media companies. According to research from Borrell Associates, $80 billion was expected to be spent on content marketing in 2022, $20 billion more than in the past two years. This trend also extends to local advertisers who realized the effectiveness of content during the pandemic and have continued using content marketing to connect meaningful content to customers. Brands looking to stand out in a crowded field of messages are finding a successful path by focusing on three things: educating, informing and engaging audiences. Local media outlets are in a perfect position to build and distribute content solutions for their advertisers.
Nancy: We remain bullish on reader revenue. News organizations such as The Seattle Times have 70% of their revenue coming from this source. For smaller organizations, we like a community contribution model that asks the public to support their work but does not put the content behind a paywall. Those with hard paywalls will only succeed if their investment in the newsroom is substantial.
Andrew: As we emerge from the constraints of the pandemic, audiences are seeking to reconnect and engage with their communities. Events could be a phenomenal revenue driver, in which experiences that place where people reside alongside solution-makes some of our cities greatest challenges, can have a great grounding effect for not only journalism but many of the brands that center on community connectedness. This isn’t just about doing a food festival or bridal expo, this is about making a difference in the lives of people who rely on us to make important daily life decisions.
Going into 2023, what media innovations, events, brands or products are worth watching?
Nancy: 2023 will be the year that philanthropic funding for journalism explodes. Foundations, high net worth individuals, corporations and average citizens will all dig deeper to ensure that local news does not go away in communities across the U.S. This will fuel stronger investigative and solutions-based journalism. Every local media organization, including broadcasters, should have dedicated resources to work with the philanthropic community to increase coverage of the most pressing issues of our day including holding the powerful accountable, climate change, clean energy, education, health, inequities, the unhoused and much more.
Penny: I couldn’t agree more with Jim VandeHai’s prediction in Nieman Lab that newsletters will not have a “peak.” News organizations have developed new products in the newsletter space, but there is more innovation that can happen, especially on the revenue side. I see some high quality newsletters that do not have a sponsorship or a single ad in them, yet we know that a reader choosing to give us their email is a big step in trust and brand affiliation. Watch for publishers to go after more sponsorship dollars for those highly valuable lists, and for broadcast companies to expand their strategies.
Julia: Media companies could benefit from watching and learning from content creators of all types, not just those representing traditional media. Content consumption is changing rapidly and the platforms and production of information may look, sound and perform differently than legacy news products. We can learn storytelling methods and promotional tactics from the new generation of creators, and then improve upon those new strategies by layering in our experience with information distribution and audience building. Plus we have the local sales force ready to monetize.
Jay: Keep watching the streaming space, both video and audio. And don’t just dump what you already produce there. We already know streaming is much more than the next generation of “shovelware.” Look for content or revenue moves beyond what you already know, from players you don’t recognize. Even a content organization generationally based in newspapers could find success producing [or, to my colleague Guy Tasaka’s oft-made point, curating] non-news content for streaming platforms. Will it return a legacy media company to its old, huge revenues or steep profits? Nope. But can it be incrementally profitable? Yes.
Andrew: I think we’ll see the “creator movement” come to roost in journalism. We’ve seen hints of this already through things like Substack but I think you’ll see more journalists who have been laid off or who have left newsrooms to start their own ventures. These reporters will create content directly through social media platforms like TikTok or directly through email newsletters. This isn’t just a fad, it’s talent wanting to own their brands and having a direct relationship with audiences
What disruption of 2022 will have the most sincere impact in the industry in 2023?
Emilie: In the realm of audience, I think social media disruptions — which culminated at the end of 2022 with Meta laying off local news partnerships staffers and making public statements on divestment from news — are painful but ultimately will help local media companies double down on diversification. Those who are still relying on organic audience acquisition via social media will continue to see declining returns on their time and resource investment. The industry will have to sincerely focus on new campaigns that leverage individual personalities and creators, paid reach, search, and email in order to reach both new and loyal audiences.
Nancy: The great resignation was painful for many in 2022, but it caused companies to reevaluate their value proposition to employees. This resulted in higher salaries, better benefits and more work/life balance. Now we are in a position to attract better candidates who can take local media companies to the next level. The extra cost should pay off in revenue and audience growth.
If there were a New Year’s resolution you wish the whole industry would make and keep for 2023, what would it be?
Frank: Center our audiences. What that means is, first, to make our journalism in service to what the community needs, not for us to decide for them. Second, it means to truly meet audiences where they are, at the times and on the platforms where they choose to get their news (not on our schedule, and on our preferred platforms.) Third and critically, it’s to center “audiences” not “the audience” by recognizing that we’ve historically underserved many communities, and it is our job, not theirs, to create those connections and to show up for those audiences and represent their stories and experiences.
Jay: Stop chasing impressions and clicks. Move away from “passive revenue” deals that devalue media brands and erode credibility. Instead, pursue community engagement and meaningful impact.
Nancy: Stop making excuses and blaming everyone else. Work to reinvent business models for news every day. Hire mission-driven people who are passionate about the task at hand and talented enough to make a difference and then let them experiment, test and forge new paths.