Lots of potential.. if…
In 2007, Tim Armstrong and Jon Brod founded Patch Media, a hyperlocal news site (or network of sites), after Armstrong grew frustrated that he could not find out anything about what was happening in his hometown of Riverside, Connecticut.
When Armstrong became CEO of AOL, replacing Randy Falco, he bought Patch (for $7 million), brought it into the AOLÂ family and made it the foundation of an attempt to build a national hyper-local network.
In order to facilitate that, Armstrong has poured $150 million a year into the site, with little success.
Now, some are calling for Armstrong to close Patch down.
In an article in the Harvard Business Review this week, Max Wessel disagrees. He says AOL should “Double Down” on Patch.
“Patch has the potential to be a truly disruptive business. The startup is trying to build a platform that could replace a disaggregated network of local news sources. Consider the market. There are approximately 54 million school-aged children in the U.S. Most of those children don’t care about the articles featured on nytimes.com or HuffPo, but almost all of them are online. They do care about the news that is featured on their Patch. Those children have parents who care about the goings on of the world, but also need to know about the community issues that will affect their families. They care about the issues Patch is covering and it shows: In just one year, Patch’s readership has grown to six million monthly uniques.
Patch is currently trying to build itself by hiring a network of professional journalists and sales people to create the content.
This is what is killing the business.
It’s a model that AOLÂ has lifted from conventional media and it is wrong.
AOL, which was once on the forefront of the Internet Revolution has fallen back to being an old media company in its thinking, which is both predictable and too bad.
Consider Youtube.
Here is a site with no ‘professional’ TV or video producers on it, yet it contains an astonishing 56 billion hours of originally produced content. It would take NBC and their ‘professional’ producers 3,000 years, working full bore, to replicate what Youtube has delivered in 5 years. Admittedly, most of it is junk, but the wise person can see the potential is there. It needs only to be trained, focused and directed.
You won’t find any ‘professional’ journalists filling the content needs of Facebook.
And you won’t find any ‘professional sales people’ working over at Craigslist – the online site that killed the newspapers.
Every local community is filled with local bloggers and videomakers who would love to have a chance to create content for a site that their neighbors saw and read and watched. This doesn’t mean that they would do this for free. But such a site, if successful, (and here I think Max Wesssel is right), would attract enough readership or viewership to generate enough ads to pay the contributors on a per-piece basis. And who would not like to pocket a few hundred dollars a week for a few videos or a line of blogging?
The answer to AOL is to think small.
If you can cut the cost of production on the sites, which I think is emininently do-able by sourcing out content creation go the local people who are already doing it, and reward them for it, then you can cut the break-even point for ads to the point at which the local butcher shop and the local shoe store and the local pizza place can afford to advertise without a massive sales force to ‘sell’ the ads.
There is, ironically, a similar discussion going on in the UK at this moment about local TV.
Unlike the US, where every city and town has at least one, if not more, local TV station, in the UK there are almost none.
Jeremy Hunt, the Culture Secretary in David Cameron’s government has called for Local TV in 65 of the UK’s cities.
Now the British Blogosphere is filled with the ‘argument’ about how this is possible.
They have, mercifully, trashed the idea of a ‘central core’ for a new national network that would ‘support’ the local operations.
Their problem, like AOL’s, is ‘overbuild’ and the ‘overhead’ that comes with it.
Get rid of the offices, the carpeting, the lights, the meetings, the building, the ‘professionals’, the ‘management’….
The rest is already in place, ready to go.
3 Comments
kenny August 21, 2011
Michael, you know I’m a fan, you know I drank the kool-aid and believe in (and have lived) the VJ model. I think VJs are producing some awesome, as-good-as-if-not-better-than local and national spots and even TV shows out there these days.
But, every time you mention the bazillions of hours YouTube has up and the thousands of years it would take the networks to replicate that, I have to roll my eyes. Yes, you pepper it with “most of it is junk”, but I think you are actually being too kind. Almost ALL of it is junk. When you’re dealing with that many hours, the few gems that come out, even if it’s thousands of hours of good stuff, are still a drop in the bucket compared to the massive amounts of slop out there. And, though many shows on TV are crap, it’s a different kinda crap. We say it’s “crap” compared to the other GOOD tv that’s out there. But, if you compared it to 99% of the “unwatchable, no one in their right mind would bother, oh dear lord, what’s wrong with people” crap that’s on YouTube, suddenly that TV show is genius.
That’s like saying kindergartners of the world produce a gagillion times more art than what you see in museums every minute. Is that going to make me stop going to museums? No. Does some museum art suck and does some kindergarten art rock? Sure. Are museums worried about kindergartners? I’m thinking “not in this lifetime”. Would I pay to go to a museum of the world’s most kick ass kindergartner’s art? Hell ya!
And that’s where Current TV came from, right? Take the best of the worst, package it up further and make it palatable. Teach the masses the skills pros use and make a watchable product? Great idea. I also think that’s where things are going with Blip.tv and the “professional” side of YouTube, craigslist and facebook. They’re all starting to use professionals to produce content. (not old school, tv station “professionals”, but not your everyday schmo either).
Maybe THAT’S it – the definition of “professional” is changing – and you’ve helped form that over the years. You don’t need years of experience or even a journalism degree (though any training certainly helps). You just know how to tell a story – between the placement of the camera, the editing and your words. It’s all about what you focus on.
But seriously, 58 billion people AREN’T doing that. 1 billion aren’t. I’d be shocked beyond belief if 1 MILLION were. I know you’re making a point about the vast amounts of content, but all I can think of when you say that is the kindergartners. And I don’t want a 5 year old (or an adult with a 5 year old mentality) producing any programming I watch. With me, at least, your numbers and reasoning behind the numbers sound like the ramblings of a crazy man. And I’m a guy who is totally behind you. I don’t think you’re crazy in the slightest. And I’m not saying the numbers are wrong. But the conclusions that you go to FROM those numbers sound ridiculous.
Michael Rosenblum August 22, 2011
Hi Kenny
I am using that figure only to demonstrate that there is an enormous, yet largely untrained and clearly unfocused appetite on the part of ‘regular’ people to create content in vast amounts and largely without remuneration. This is not to say that the stuff they are making is great or even good. It isn’t. But it’s an indication of a massive desire to do so. That is the beginning, not the end of the discussion. Can that overwhelming desire be trained and directed and turned into something truly productive? I am betting that it can be, but that will take time, training and a realization on the part of those who were producing content before that the game is about to change. I did not mean to imply that the current product was good – it isn’t, but the key indicators certainly are astonishing.
kenny August 22, 2011
All right. I’ll buy that. If you’re highlighting desire, then there’s certainly no question. People want to be in showbiz. That’s the fact, jack. And, yep, They’re woefully unskilled. So, if there was only a company out there that made straightforward video production training easily accessible to the anyone with a computer.
Aaaaaahhhhhhhhhh…..I see where you’re goin’ with this!
Seriously, though, when you mention that the numbers prove overwhelming DESIRE, then I’m not rolling my eyes anymore.
What got me initially, was that it seems like you’re saying half the time, is that the youtube folks are doing something that professional production companies cannot – that is, produce enormous amounts of content. Well, they COULD do that – just tape every freakin’ little thing and air it 24/7 without even editing it or even LOOKING at it. They could also sleep with everyone they ever meet – but they don’t. They have SOME standards – They’re looking for true love…meaning, they REALLY have to make sure something is good before they put it out there. Now, we don’t always agree with who they’re dating, but at least they’re not the sluts that the YouTubers are!
But if you’re saying it’s desire (lustful, sweaty, disgusting desire) I’ll buy that. And, yes, huge potential.