Summertime at the McKinley Park News

Greetings, readers, friends and fans of the McKinley Park News!

Happy summer! We’re finally here! Summertime is one of the best seasons for Chicago’s McKinley Park neighborhood, especially given our great parks and neighborhood groups that bring so many seasonal activities to our community.

This summer also heralds my and my family’s return to our lovely neighborhood. Past readers will know of personal issues that have hit hard and affected the development of the McKinley Park News, including a protracted home rehab that has us temporarily residing nearby. We’re finally getting everything done and will be back this summer: We can’t wait!

Embedded Within Community

This is important for the McKinley Park News because our micro-local news practice relies on a neighborhood journalist residing within the community of coverage: It motivates a local news publisher, organically creates news coverage and revenue opportunities, and engenders an economy of scale required to efficiently cover neighborhood news.

During the past couple years, the consistency of our coverage has suffered, due not only to our distance from the neighborhood, but also to overhead from the above-mentioned personal issues and the limited capacity of a solopreneur-driven effort trying to build an unfunded startup.

Product, Platform and Business

In order for the McKinley Park News to be successful, I have to push a bunch of elements across the finish line: the news product, the platform to deliver it and the business opportunity to enable it to exist and grow.

It’s like pushing boulders that are chained to each other, all of which much roll together in order to win the race:

• I know our product of neighborhood news and events is valued and valuable, consistently growing traffic, engagement and membership from a unique, local audience, especially when we’re hitting our target cadence of a news item every weekday.
   
  We’ve been publishing neighborhood news and events for nearly eight years, and we’ve created a growing community and audience centered around our residents and community institutions. We know what we have works very well to serve our neighborhood, and we understand exactly how much it costs to produce it.
   
  This boulder can roll smoothly, but it’s been held back by others.
   
• Our open source platform has been great at delivering a reliable, flexible, affordable and secure news, events and membership service with features and capabilities that exceed most others.
   
  Some of our biggest platform priorities have been independence of publishing, high performance at low cost, expandability and affordable technology debt: all requirements validated by what we’ve built and have been running since 2012 (first at mckinleypark.org).
   
  I’ve written before about our technical To Dos, and I’m happy to report all primary work is completed, from an interface overhaul that fully supports mobile devices to a migration to cloud hosting that can support any capacity and expansion need.
   
  This boulder’s now sanded down and ready to roll across the finish line.
   
• The business part of neighborhood news has been like a giant, craggy boulder of indeterminable dimensions, holding back all others while being pointed and gawked at by a peanut gallery of “boulder experts” employed by the rock-crushing plant.
   
  We’ve been able to glean some benefits and insight from programs at journalism institutions. However, none have offered comprehensive, qualified help with business planning, and indeed they conspicuously omit critically important revenue-generating disciplines while taking big bucks from direct competitors who steal from and exploit news publishers. On a fundamental, business level, we can’t trust organizations like this.
   
  Still, as a tiny, unfunded startup, we’ll take whatever we can get, including helpful data about local subscriber and business markets from the Medill School’s Metro Media Lab, useful elements of LION Publishers sustainability audit, and its funding to help us contract help and conduct research to build our own business plan.
   
  We’ve also hunted down other resources, such as Kenny Katzgrau and his Broadstreet Ads intelligence, which is the only real source we could find to help us learn and plan advertising sales. (Note: We aren’t a Broadstreet Ads customer, nor do we have any type of relationship with Broadstreet and Katzgrau beyond being very happy and grateful for the webinars and resources they freely provide.)
   
  All of this business planning has taken tons of time, including pulling attention away from rolling our product smoothly forward. However, if we don’t also shape and push our business, it will be nothing but an anchor that prevents everything from crossing the finish line.

Fortunately, the future looks bright. Our planning, research and experience are both validating the business potential of our micro-local news market and heralding the prospect to multiply opportunity via a contiguous network of independent neighborhood news publications. As a reader of the McKinley Park News, I’m happy to share details of our business planning here with you.

One Neighborhood, One Journalist

The first order of business is getting the McKinley Park News to generate enough revenue against costs to engender a thriving livelihood for a neighborhood journalist. Our model proposes a single, dedicated, permanent journalist/publisher as the owner and operator of the neighborhood news publication. This results in a single livelihood to fund; it also inspires the commitment and opportunity that comes from business ownership versus transient employment.

What’s a “thriving livelihood” for a neighborhood news publisher? To us, in our local market, this means an annual take-home opportunity exceeding $100,000 per year, plus benefits, and a reasonable target remuneration of around $50 per person-hour for journalism and publishing work.

Publishing Costs

Based on years of operating the McKinley Park News and tracking our operations, it takes a neighborhood news publisher an average of 27 hours per week to administer the platform and business, and create and publish our target product of a news item every weekday plus event listings. Publishers also realize opportunity through a 30 percent commission on sponsorship and advertising sales: a primary revenue source and a key part of a publisher’s job.

This labor cost is our single largest budget item: something we’ve never yet paid, as I haven’t paid myself anything (yet). Because of our DIY ethos and leverage of open source technology, as well as our embedded, micro-local focus, our other costs are much smaller:

• Our out-of-pocket platform costs remain below $3,000 per year, which include not only all the service and capacity that powers the McKinley Park News, but dozens of other staged and resource websites, white-label video hosting and live streaming, email and enewsletter hosting, secure ecommerce, and many other features.
   
  Our platform is reliable to the point of set-it-and-forget-it (with manageable upgrades every couple years). Since our platform’s built on commodity hosting and open source software we run ourselves, every year our prices go down, and our capabilities go up.
   
• Our administrative, business and other operating costs remain around $2,000 per year. Our straightforward enterprise structure, local and lean operations, integration of open source production tools, and virtual/home office operations means very low overhead for other out-of-pocket costs.

Based on the above and other information, we’ve set an initial revenue target of a little over $150,000 annually for a neighborhood news outlet. This would deliver around $110,000 plus benefits to the publisher/owner, pay for all out-of-pocket costs and return some income to the enterprise as profit.

Makin’ the Bacon

So where will this money come from? Based on our analysis, the biggest opportunities lie in local advertising, as subscription revenue, merchandise and other sources contribute smaller slices of the revenue pie. Indeed, advertising is what’s always driven news enterprise, and it’s where all of our Big Tech competitors continue to make massive amounts of money.

Is there enough potential ad revenue to fund a neighborhood news publication? We know there is:

• We’ve conducted a detailed economic analysis of our coverage area to determine our “Gross Neighborhood Product” — the total annual revenue generated by all enterprises in our coverage area.
   
• We’ve built a flexible, step-up sponsorship and advertising system that can accommodate the wide variety of marketing needs and budgets found in a single neighborhood, from the smallest solo enterprises to the largest employers and brands.
   
• We’ve developed an advertising revenue formula that very conservatively considers what neighborhood vertical markets might spend annually on local media marketing, then measured this against modest estimates of market penetration and the appeal that comes from the immediacy of our product.

Based on all this analysis, we think there is more than enough opportunity in our micro-local market to blow past our revenue goals and deliver extra income to the publisher and enterprise, as well as hopefully entice investment interest and support financing needs.

Neighborhood News Network

We’re also considering how the enterprise might grow from its starting point in McKinley Park. We’ve recently launched the Local News LLC website that shares our enterprise mission, ambitions and founding team. We want to not only grow the local news practice and platform we’ve built for the McKinley Park News, but also leverage the multiplied revenue and cost savings of a contiguous neighborhood news network with members that share resources and opportunities.

As mentioned above, the first of order of business is making this work in McKinley Park, and we’re getting everything lined up to do so: a optimized platform to deliver our well-liked product with a plan for business that ensures our success.

Back to the Neighborhood

The last elements remaining are completing formal elements of our business planning and structure, as well as moving back to reside in the neighborhood. Fortunately, we finally have a move-back date later this summer, after which the McKinley Park News will ramp up to full operations for our product and business.

In the meantime, through this summer, we’ll continue to publish neighborhood news articles, event listings and subscriber features; finalize all elements of our business operations; and continue to serve our sponsors and advertisers with marketing and advertising services.

Family and Self-Care

I personally am also going to take a little time this summer to dedicate to family activities and some long-delayed self care that’s going to keep me and this startup running. We will let you know of news and updates about our neighborhood news publication as we move forward.

I hope you have a fantastic summer, and I wish you and yours all the best. Cheers!

— Justin Kerr
Publisher, McKinley Park News