The founder of TheAlternativePress.com in New Jersey thinks hometown passion and a licensing package are the winning equation for making online publishing work for communities and for locally grown journalist entrepreneurs.
In a “teach me to fish” strategy, TheAlternativePress.com has begun selling a platform, ad sales training and an ad network based on his profit-making model. The goal is to make money for journalist entrepreneurs providing local news for their New Jersey communities, said Michael Shapiro, founder.
Shapiro’s company offers licensing agreements to publishers-to-be, who are required to be local journalists. “It is more like finding the right licensee,” Shapirio said. “They are so successful because they live here.”
While TheAlternativePress.com is currently operating in 15 towns, Shapiro has a bold plan for expanding to 150 towns.
Shapiro grew up in Livingston, N.J., and spent his early career years as an attorney commuting back and forth between Manhattan and New Providence — where he lives with his family.
But his priorities changed when he and his wife discovered their one-year-old son needed open heart surgery.
“He’s five now and doing well. But it made me really rethink everything because his first year of life I barely saw him.”
So “We asked ourselves, ‘What could we do that would help the community and do what we really want to do?’ We came up the concept of an all online objective newspaper. “
TheAlternativePress.com launched in 2008 with news sites in Summit, New Providence and Berkeley Heights. Six months later Shapiro left his job to run TheAlternativePress.com full time.
Each of those sites is now earning between $50,000 to $100,00.
In its latest development, Shapiro’s begun licensing the site to entrepreneurial journalists who want to run their own newsrooms — one in Scotch Plains / Fanwood and one in Newton in Sussex County, which will expand to multiple newsrooms.
“That will allow us to expand and keep it truly local,” he said. Shapiro said he was stretched to keep it local as TheAlternativePress.com expanded. Now he’ll be focusing on licensing and working more with journalist licensees who want to be local online publishers.
With its main revenue source being advertising from local business, TheAlternativePress.com was profitable in 2010 and 2011.
Under the expansion plan, experienced local journalists buy the licenses to run the town sites. Shapiro is testing the license pricing as a three-year ramp up — $2,500 in the first year, $5,000 in the second and $10,000 in the third. In addition each site pays Shapiro 10% of revenue.
In return, the journopreneurs receive administrative access to the proprietary platform that’s been built in Ruby on Rails. The license also includes media liability insurance, training to handle the editorial platform, and advertising sales training.
The journopreneur’s responsibilities become covering their town’s news, ad sales and readership development.
In essence, TheAlternativePress.com gives start-ups the infrastructure and the means to run their own newsroom business. Shapiro says depending on management style, after the three year ramp-up, a TheAlternativePress.com newsroom should be able to bring in $50,000 to $100,000.
The licensing makes sense because these publishers want to be the source of news for their community,” he said. “I don’t want it to be a corporate thing…. Like what they have been doing in Patch.”
He cites Jennifer Miller, one recent licensee of TheAlternativePress.com, who also serves as Managing Editor of the Newton site.
“We are all one big family,” said Miller, who is also CEO of TheAlternativePress.com of Sussex County. “It’s a plan for the entire county.”
Miller and a partner are investing in a license to establish a series of online publications. They are still negotiating those details with Shapiro.
Miller began her career as a freelance reporter and then expanded to photographer with Straus News – LH!Weekly – a community site that is now defunct.
“We have two major news publications in this area and neither is local,” Miller said, adding, “I felt it was a disservice to the local residents.”
“People respect my work in this community and I felt that I could make a difference,” Miller said of her commitment. “In my community it has taken off. My mayor is a huge supporter.”
On the ad side, Shapiro said local advertisers include every type of community business from the pizza place to the small business employers. The cost for buying an ad in one town is $100 per month and annual packages are also popular.
One advertiser is The PaperMill Playhouse.
“What we find unique about TheAlternativePress.com is that they are a true community partner, “ said Shayne Miller – Director of Press and Public Relations for PaperMill, and also president of the Millburn/Short Hills [NJ] Chamber of Commerce. Millburn/Short Hills is the cross roads for three affluent counties.
Miller likes the fact that TheAlternativePress.com doesn’t allow anonymous comments on articles. “Personally, I think that is what is killing some Internet advertising.”
Papermill’s annual budget is $16 million and they advertise with NJ.com, Patch.com and TheAlternativePress.com. The theater has embraced click-through rates as a measure. They work with advertising agency Brushfire Inc in Cedar Hills, N.J.
“We can see that we spent $250 on advertising and we brought in $6,000 in ticket sales,” he said. “ You can’t see the return from an ad in the New York Times.”
“I want every site to be full of ads,” TheAlternativePress.com founder Shapiro said. “Our advertisers aren’t interested in self- serve, they have enough on their plate.”
Shapiro said TheAlternativePress.com works with a number of ad agencies and he projects they will stick with him as the network grows more newsrooms. At that point, companies like Pepsi will be interested in buying ads, but Shapiro is quick to add that they will never sell ads to national chains that cannibalize local businesses.
Shapiro said that he doesn’t know that the affluence of his home area has any bearing on the site’s success. “I just happen to live here so that’s why we started here. I don’t want people to think we don’t or won’t operate in “non-affluent” towns.” In fact, the platform is being used in Paterson, one of the most economically distressed cities in New Jersey. There TheAlternativePress.com is partnering with a not-for-profit that runs the newsroom and has waived the license fees.
He said TheAlternativePress.com is looking for steady, measured growth and adding some bells and whistles for content like video.
Shapiro said scalability benefits as TheAlternativePress.com gets more and more licensees but home is where is heart is.
“No matter how big we get, we want to keep it really local,” he said. “One of our slogans is ‘Shop Local, Read Local’.”