Howard Owens is one of the smartest journalism entrepreneurs in the business. He launched The Batavian as a digital challenger to the Batavia Daily News in New York, and his small business is thriving.
I was interested yesterday to see that Howard had blogged with some advice for local websites competing with Patch. I had written about the challenge presented by Patch a few weeks ago, and was interested to see what Howard had to say. Not surprisingly, his advice on competition was more detailed and better than mine. But I had also noted the potential for turning Patch into a collaborator or a customer. So after tweeting a link to Howard’s post, I tweeted a link to my own.
That triggered a spirited Twitter discussion between Howard and me (a few others, including Andria Krewson, joined in) over whether collaboration with a competitor is even possible. Howard says it’s not.
Before I explain why Howard is wrong, I should make two things clear:
- Howard is a smarter, more experienced journalism entrepreneur than I am. You should give serious thought to what he says, even if you disagree with him.
- I do agree with him that every market is unique. He probably is 100 percent right for Batavia, and his advice might be right for your market. I don’t absolutely encourage collaboration; I encourage consideration and exploration of whether collaboration would be in your best interest.
I’ll give a simple example of how a company I worked for turned a competitor into a customer and continued competing: When I came to The Gazette, we had a separate office in Iowa City, about 30 miles from our home office in Cedar Rapids. Our separate office had news, circulation and advertising staff and we competed fiercely with the Iowa City Press-Citizen for readers and ad dollars in the Iowa City market.
While I was there, we cut a deal with Gannett, owner of the P-C, to print and distribute the Press-Citizen and to distribute the Des Moines Register (which also had competed fiercely with the Gazette back when it was a statewide newspaper). Gannett had shut down the Iowa City press and started printing the paper in Des Moines, a move that required earlier deadlines because the papers had to be trucked two hours back to Iowa City for delivery. That gave the Gazette a particular advantage in covering high school sports, because P-C deadlines could fall before some games ended. By printing in Cedar Rapids, the Press-Citizen got later deadlines (even later than ours, because we printed our paper first). So we were actually helping our competition in an area where we had a huge advantage.
But that was OK, because we were helping ourselves, too. We were generating more revenue from our printing facility, getting a better return from the huge investment in that facility as well as from the payroll of the printing plant (though we also hired some new people to handle the extra work). We generated more revenue from our circulation routes and our customer service operation. All of that was better for our business than the insignificant damage caused by helping a competitor get better deadlines.
We still tried to kick the P-C’s ass on coverage of Hawkeye football, University of Iowa news, Iowa City high school sports and major Iowa City local news. We still competed head-to-head with them for ads from Iowa City merchants. And we cashed some large checks from them for printing and distributing their paper. Competition and collaboration were both good business for us.
At TBD, much has been made of our competition with the Washington Post. But we also link to dozens of Post stories every day. Our business model is to be the one-stop place where people can come to find all local news about the Washington area, wherever it originates. That means we link to the Post and send it lots of traffic every day. We also send traffic to local blogs that probably also regard us as competitors and that certainly compete with us for attention and advertising. In fact, we have recruited a network of 179 local blogs and sites who have agreed to be collaborators, at least to a degree.
A part of Howard’s argument is that local ad dollars are finite. Here again, we disagree. They are not unlimited. But if a news outlet can generate more business for a local merchant, the merchant will spend more money with that news outlet. As @newspress noted in yesterday’s Twitter exchange, local online ad spending is expected to grow 26 percent this year. Howard notes correctly that national trends don’t necessarily translate to each local market.
Yes, if Patch is coming to your community, you might face fierce competition, and Howard provides excellent advice for meeting that competition (I would advise my friends at Patch to stay out of Batavia). But whether your competition is another newspaper, an established website or a new entry in the market, I would explore the possibilities for collaboration as well. The point of business is to survive and thrive, and you need customers to do that. Your competitor could be a good customer as well.
[…] This post was mentioned on Twitter by Steve Buttry, Steve Buttry, Howard Owens, NewsFuturist.com, Matt Roper and others. Matt Roper said: Why competitors can help each other online: Excellent piece by @stevebuttry http://bit.ly/ah6zCN […]
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Steve, you’re more than fair, so I hesitate to make a point of disagreement, but your primary example involves two well-funded, well-established, legacy properties, and does not involve a head-to-end, single market competitive situation.
It’s, as a wise man once said, “apples and oranges.”
For the typical indie publisher, he’s covering only one small market. He or she does not have deep pockets. Patch is coming in with deep pockets and going after that single, solitary market (from the indie publisher’s perspective).
It’s a very different dynamic.
It’s very kum-ba-ya to sing the praises of cooperation on the content side, but it’s a whole other matter on the revenue side. While the national trends on local advertising are encouraging, when you get down the local market (and I mean, the real local market, which excludes chains), you’re dealing with business owners who are still unsure of this whole online thing, trying to pick their way through with limited ad budgets. At this stage, to look at local revenue, from a local indie publisher’s perspective, as something that can be shared, is rather magical thinking.
In my own market, three local media companies are co-existing right now, and maybe that will last forever. At this point, I realistically see how that might be the case. But the other aspect of what I’m talking about in my post is the process of establishing a wedge in the market, a brand, an identity, and from a business planning perspective, that means, often, positioning oneself against competition, and that probably means any thought of cooperation is suboptimal.
That doesn’t necessarily mean attacking the competition. In fact, having tried that route, I’d recommend against it. It’s better not to mention your competition at all. But if you really want to distinguish yourself as different, cooperation undercuts that message.
One other point about the content vs. revenue divide — if your company is big, you have separate units for content and revenue, so the content side can get all warm and fuzzy about cooperation, while the revenue side of the business goes about fighting in the trenches for dollars. But when you’re small, the the content guy and the revenue guy are the same guy. The dynamics of that spills over into lots and lots of business decisions and perceptions among audience and advertisers That needs to be a consideration, too.
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[…] of interest: How to Beat Patch, from Howard Owens, and Steve Buttry’s response, via MediaGazer. The first talks about beating AOL via a lower cost structure and going […]
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I’m in a situation much closer to Howard’s. That is, sunvalleyonline.com (SVO) is a bootstrapped, independent, profitable, hyperlocal site owner/operator though I’ve been a leader in a Patch-like predecessor (Microsoft Sidewalk where I was responsible for city rollouts). I fall somewhere in between your respective positions. Coming out of the software industry, I’m very comfortable with the notion of “coopetition” which is what Steve is advocating. For example, with Sidewalk Seattle, we partnered with the Seattle Weekly (alt weekly) and that partnership worked for both parties.
Each of you rightfully point out there’s a big difference being in DC (that was one of the markets under my management at Sidewalk) and Batavia. What it takes to compete in a major metro is quite different than a stand-alone community (i.e., not a suburb of a major metro).
For SVO, there’s at least one entity we won’t cooperate with as they are the dominate player and highly unethical to boot. With others, it’s the “the enemy of your enemy is your friend” thing. For example, we have cooperated with the local radio station that technically is a competitor (e.g., trade advertising/promotion) but we have very different strengths. We tried cooperating with the #2 newspaper in town that ended up shutting its doors after 146 years that I dare say if they’d been more nimble and aggressive our partnership may have saved them.
I will wrap up with a point you may both agree on. Partnering locally hasn’t been a game-changer for SVO. If you want long-term financial sustainability, 95+% of your effort should be on getting your offering (content & advertising) right. From afar, I think you both are doing the right thing. TBD’s approach with bloggers looks brilliant for a market like DC. The Batavian’s success is self-evident.
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Thanks for the thoughtful responses, Howard and Dave.
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I also own and operate an independent local news site, The Sacramento Press. In addition, we collaborated with our competition to form the Sacramento Local Online Ad Network. We saw found out that collaborating particularly around revenue generation can be beneficial in Sacramento.
The network works because together we have the reach to sell regional ads we simply could land alone. This opened a new revenue stream for the 50 plus sites that are part of our network. We have had no sites leave the network. Yet we do compete. Most sites on the network offer unique advertising opportunities for local firms that cannot afford the network buy an don’t need the reach. In fact, we still sell more volume of those ads on The Sacramento Press than we sell of network ads.
Howard wrote, “you’re dealing with business owners who are still unsure of this whole online thing, trying to pick their way through with limited ad budgets.” That is 100% true. It is true particularly at the small advertiser level. Here’s the opportunity: if Patch or Yelp or the local paper sells an online product to a local small business they help educate the business and show the power of online local advertising.
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Cont (got cut off, on my iPhone)
Local firms that are educated are more easily sold. They will commit larger portions of their overall budgets to local online if the marketing works. Even if they don’t buy, just hearing about all the buzz of a healthy market can make sales easier.
I know this to be true where I live because we have benefited from it. When we started The Sacramento Press there was a cool local online directory called Midtown Grid. Our ad prices lined up with theirs. We had similar products. We had similar values. They were as direct a competitor as we’ve had. Yet their existing advertisers were some of our earliest clients because they knew the power of what both our operations were doing. Midtown Grid continues to thrive and has grown substantially. We have grown from nothing to a full blown news operation. We never directly collaborated yet we benefited from having the other in town.
Innovative disruption is the name of the game on the net. I’m happy to be a part of that. I don’t believe any of us us good enough at what we do. I believe a diversity of experiments and healthy competition has and will continue to move the needle for local news an information. I will be innovating and pushing and working toward a healthy local media ecosystem.
One last note. I would not even be writing this if I didn’t respect and admire Howard Owens. He has done more than almost anyone to prove we can make money at the local level. I just want to add my own experience to the mix with a healthy dose of my opinion. A multiplicity of viewpoints is necessary for a healthy discussion.
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Ben, you’re doing great work and having a lot of success and I appreciate your comments.
My position and this should be construed as dealing exclusively as a message to the local indie publisher facing direct competition from a local media outlet.
The post that prompted all this was aimed at helping the local indie publisher facing direct competition from a well-funded, deep-pocket media outlet going after the same direct and limited market you’re covering.
At The Batavian, we are indeed deeply enmeshed in cooperation, and I wouldn’t want to leave the impression otherwise. We partner on news with the local radio station. It’s a highly productive and enjoyable partnership. We have a Also, I’ve cooperated with the major metros in the two closest somewhat big cities. The TV stations in those markets often call on me for information and help, and a couple of reporters at those stations have become strong allies.
You can’t survive as a small, indie start up without partners.
Where my “don’t cooperate” remarks come from is when dealing with that direct competition, competition that would be just as likely to eat your lunch while saying, “we’d be happy to link to you.” (also, see my previous posts on link fetishness)
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[…] You can compete and collaborate at the same time « The Buttry Diary (tags: collaboration entrepreneurialjournalism patch tbd linkjournalism) […]
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[…] Shared You can compete and collaborate at the same time « The Buttry Diary. […]
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Hi, gentlemen.
Wanted to offer a different view of the last point in Ben’s first installment.
Having a potential sponsor sign up with some other online enterprise first does NOT necessarily mean they’ll realize the power of online advertising and be ripe for your picking.
There are some concerns in this area (as I’d imagine there are everywhere) who are selling online advertising for little-used sites, run by companies big and small. More power to them for talking a good-enough game to get somebody to at least try for a few months, but then if we wind up talking to them, never mind that we have literally 10 or more times the “audience” of the site they tried, they go into a shields-up mode, “Sorry, tried that, didn’t work.”
Yes, I guess that means we should try to get to “everyone” first. Unfortunately or fortunately, we don’t run telephone boiler rooms, so the Dialing for Dollars approach is leaving some scorched earth behind courtesy of others who overpromise and underdeliver. (Which we don’t, on either count.) Not that we’re sitting around whining about this, but it’s a very real fact of life, and it’s the flip side of “hey! somebody else primed the pump!” so I wanted to append it to your conversation.
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Tracy, as she usually does, makes a very good point.
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[…] a point I have made in two recent blog posts, that media companies should explore possibilities of collaboration with their competitors. Each situation is unique and cooperation might not work for your market. But consider whether you […]
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[…] a launch in Seattle, and dropped hints of a plan to get into newspapers. TBD’s Steve Buttry assured local news orgs that they can compete and collaborate with Patch and other competitors at the same […]
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[…] You can compete and collaborate […]
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[…] mixed it up (sometimes agreeing with me and sometimes disagreeing) on revenue streams, obituaries, competition, research, anonymity and adding value. Henry pitched in to discussions on News Foo, obituaries and […]
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[…] cited Howard Owens here on multiple occasions before today. We’ve argued over whether you can collaborate with competitors and over what was newspapers’ “original sin” in the digital age and agreeing […]
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