From Newspapers to Newsletters: The Bright Future of Local Journalism

Yet the future of local journalism is bright. If you know where to look, you can spot the seedlings of a more sustainable, vibrant, and democratic local media ecosystem. Over the next several years, the newsletter will replace much of the media landscape formerly occupied by newspapers, a change that began at the top layer of the media food chain and will work its way down to the local level.

To understand what is propelling that transformation, it’s first vital to understand that newspapers are facing the same digital headwinds as other information services. The internet propels disintermediation, which means that consumers can bypass traditional middlemen and directly access service providers. For example, it was once routine that hopeful travelers relied on travel agents to act as intermediaries with airlines and hotels; today, consumers are much more likely to plan a trip themselves via an online marketplace, bypassing the travel agent middleman.

Something similar is happening with the newspaper industry; consumers are no longer locked into getting their news from a limited set of local or regional newspapers that happen to deliver to their neighborhood. Now, almost anybody, anywhere in the world, can subscribe to any newspaper online and receive it instantly. That transformation has given an immense boost to major national papers like the New York Times and the Wall Street Journal, which benefit from the expanded potential audience and offer a product that has broad appeal to match. By contrast, local newspapers, which had already reached their maximum audience long before the rise of the internet, are going the way of the travel agent.

The second trend affecting the newspaper industry is disaggregation, the unbundling of various types of news services. Newspapers traditionally provided a pre-​packaged bundle of news options. You might not have wanted all of the options provided but you had to get them in order to acquire the news that actually interested you. For instance, you might not have particularly cared about the high school sports section or the weekend culinary reviews, but you still got them even if all that you wanted was local political news, You were stuck subscribing to the entire package with little opportunity for à la carte optimization.

That was once true of television as well, with consumers locked into either local broadcast channels or expansive and expensive bundles of cable channels. But the internet-​fueled disintermediation of television over the past twenty years has also propelled disaggregation. Consumers can now choose from a series of smaller streaming packages or even pick individual channels. And we should expect the same to happen to the news industry. Disintermediation is giving news consumers more choice than ever before. It is natural that disaggregation would then follow as consumers seek to create newspaper alternatives that are more selectively tailored to their individual interests.

These paired forces—disintermediation and disaggregation—are corrosive to the traditional newspaper model. Newspapers once used their control over the dissemination of local news to sell highly profitable advertisement space to companies eager to sell to a locked-​in mass audience. But now the balance of power has shifted from news producers to consumers, who have to be persuaded to choose any one of a thousand news outlets over any other. And consumers want greater control over content.

This is where the newsletter excels. It gives consumers the topical coverage they want and in greater depth than the traditional newspaper ever could. For example, previously, if you had wanted detailed news and analysis about Chinese foreign policy, you had to wait for your local paper or weekly news magazine to provide you a smidgen of intermittent coverage. But today, you can subscribe to half a dozen newsletters by experienced journalists with a laser-​like focus on China.

And you can find a newsletter on just about any topic you can imagine. Want to keep up with the latest basketball news? There’s “Truehoop.” Interested in a historically informed analysis of politics and policy? Check out “Letters from an American.” Trying to follow the latest developments in emerging tech? Try the “Information.” The newsletter industry has already developed to the point where it is possible to assemble one’s own, individualized newspaper alternative.

The next step in the evolution of the newsletter will be new mechanisms and platforms that ease the rebundling of news. At the moment, newsletters are spread across competing platforms and many independent websites. And while these sources are informally tied together by a shared email inbox or the adjacency of apps on a smartphone, there is still an inherent kludginess in the system, a friction that is slowing consumer adoption.

But in the same way that streaming television has begun to reaggregate–eg, Amazon Prime Video has created a platform for a la carte channel subscriptions–newsletters are now following suit. As the newsletter industry continues to expand, expect additional platforms and third-​party apps to evolve that will provide a more frictionless consumer experience.

That is possible given the flexible financial model of the newsletter industry. Instead of newspapers reliant on mass audiences with cross-​subsidies from ad sales, the newsletter is a relatively cheap, niche service. It is the culmination of something predicted by technologist Kevin Kelly back in 2008, when it was becoming possible for more creatives–artists, journalists, musicians, etc–to build a sustainable income from a base of just one thousand “true fans,” as Kelly called them, the people willing pay to see, listen, or consume one’s creative output.

The math is simple. On Substack, currently the largest newsletter platform, the typical subscription costs $5-$15 a month. Even at the lower end of that scale, 1,000 subscribers is equivalent to $60,000 in gross revenue ($52,000 after platform and processing fees). That is significantly more than the median income for traditional newspaper journalists of $35,860. In other words, you don’t even need Kelly’s one thousand true fans to make a better living with a newsletter than as a newspaper journalist. And, of course, the upper echelons of the substack community–those with tens of thousands of subscribers–do quite well, netting more than a million dollars a year.

It is hard to get one thousand true fans from a small pool. Bear in mind that as recently as July 2018, Substack had only 11,000 total subscribers across all its newsletters; that number has since grown to 500,000+ paying subscribers and twelve million readers. This exponential growth curve means that even niche and hyper-​local interests now have a chance of finding a foothold. For example, it might be hard to find a thousand people who are interested in transgender literary news out of a total pool of eleven thousand, but the calculus drastically changes when the pool is 50 times larger and continuing to grow!

Some have questioned the value of the newsletter as a newspaper substitute because authors lack the structure and editorial check provided by a traditional newsroom. And it is true that thus far newsletter authors are mostly independent journalists. However, that is not universally the case. Two of the most successful newsletters—“The Dispatch” and “Bulwark+,” both with tens of thousands of subscribers and a million plus in revenue—are an online recapitulation of the traditional newsroom that comes complete with editorial control and a large stable of writers. We should expect more evolution in that direction as the newsletter industry matures.

Others are skeptical towards newsletters because some of the most successful letters are either written by editorialists poached from national media outlets–like Matthew Yglesias, Andrew Sullivan, and Charlie Warzel–or by subject specialists who narrowly focus on national or sector-​wide coverage of tech, sports, politics, and so on. As such, these newsletters aren’t a replacement for truly local news that covers the nitty gritty of school board meetings, town budgets, small business openings, and community events.

The good news is that the local newsletter is an area of rapid growth. Already, the trend has percolated down to mid-​tier cities like Charlotte, where one can subscribe to The Charlotte Ledger, a newsletter with one full-​time journalist and $175,000 a year in revenue (or roughly four times the average journalist salary at the local newspaper, the Charlotte Observer). And that downward growth will continue until every town of any size will have at least one local newsletter.

Think of it this way. Your small town probably has a person who seems to know everything about local comings and goings, the kind of person who voluntarily attends interminable town meetings and shows up at every minor event. Even just a few hundred subscribers will be enough for people like that to monetize their deep, local knowledge.

This is, admittedly, bad news for the professional journalism class, the over-​educated and over-​indebted journalism school graduates who don’t necessarily have that kind of local expertise. It is understandable why they would call for government subsidies to save the traditional newspaper model. But for both consumers and the new class of citizen-journalists—whom Ben Thompson calls “sovereign writers”—the rise of the newsletter is a clear net positive. It will reward local knowledge and produce significantly greater returns to labor in contrast to the fat profits once delivered to newspaper owners. It may result in the most significant and salutary transformation of journalism in our lifetimes.