Patch CEO Warren St. John Addresses SXSW Audience

AUSTIN, TEXAS — Patch CEO Warren St. John on Wednesday addressed a SXSW audience to discuss the journey that has made the hyperlocal news site he heads a profitable venture amid a shaky industry landscape.

"We're a pretty earnest bunch," St. John told those gathered for his talk, titled "Reviving Patch: How Technology Can Save Local News." Patch, a hyperlocal news and community platform, has 150 employees who are "deeply committed to local reporting," he said.

The journey to three years' profitability as an independent news source five years after its launch hasn't been easy, St. John said.

Exacerbating the challenge are the troubles that have beset the industry in general amid a crowded field vying for readers' attention. For Patch, myriad challenges started right away, and St. John was in a unique position to experience the fickleness and frustration of readers firsthand.

Once owned by Aol, the company was purchased five years ago by Hale Global, now majority owner of Patch. Immediately, readers expressed frustrations at the sudden changes, St. John recalled.

"Basically, every letter we got started with an 'f,' " St. John joked. Yet Hale Global Chairman Charles Hale told St. John this backlash was actually a positive omen.

" 'The fact readers were crying out for more and wanted content (and) information is probably a good sign,' " St. John recalled Hale telling him.

In his first year, St. John was alerted to the saving grace of "high signal information" that is widely read and shared when pushed to readers.

"A light bulb went off," St. John recalled. "We may only have 50 people, but maybe we could create an alert-driven strategy."

This has become Patch's hallmark, with its focus on hyperlocal news that readers can't get anywhere else — bread-and-butter community coverage traditional outlets neither have the time nor inclination to provide.

The strategy worked: "Hateful emails stopped, traffic bottomed out and started to go up," St. John recalled. Gradually, readers responded positively to the changes, including Patch's current makeup of "150 employees who are deeply committed to local reporting," St. John said.

Each Patch page also has its own Twitter and Facebook site, helping to broaden exposure to its content, he added.

Today, Patch is ranked among the top 100 most-read websites in the U.S., according to Alexa.

And yet, the company is still trying to figure out how it fits "into this ecosystem," St. John said, referring to the media landscape. In chiseling the new Patch into existence, St. John and Hale set out to create a unique business model, knowing the traditional versions utilized by other startups have not proven sustainable.

The biggest pitfall for those wanting to emulate Patch's success, for instance, is to go the philanthropic route, St. John said. As the media industry deals with heightened competition, several similar startups have reflexively zeroed in on such financing. But seeking a rich benefactor to keep an operation afloat is "learned helplessness," St. John told those gathered, and the model is not sustainable.

"I'm all for rich people giving money to local news," St. John said. "However, it's probably not a sustainable strategy."

St. John invoked the New York Observer in Patch's own headquarters' back yard as an example. For years sustained by a rich eccentric, the magazine was thrown into crisis when the benefactor decided suddenly he wanted to take up sculpting as a hobby rather than financing a magazine. What emerged was a cautionary tale of merely being handed a fish (a big one at that, but still just one fish) rather than learning the art of fishing for long-term sustenance.

In crafting the post-Aol Patch model, elements have been put in place to achieve efficiencies of scale. At the center of the effort was the building an internal content-sharing engine, its creation aided by officials at the Bleacher Report who emerged as admirers of Patch's efforts.

The ability to share breaking news alerts has also proved successful in not only retaining existing readers but luring new ones, he said. Artificial intelligence churns out real estate notices and weather reports at a clip of about 3,000 articles per week, freeing up journalists to focus on Patch's core mission — delivering news from readers' back yards, St. John added. Patch secures 2 million page views from that AI-generated content alone, he noted.

Bolstered efforts are under way to create more user-generated content (UGC) and RSS feeds from nonprofits and others. A new "neighbor post" function allows readers to quickly and easily ask questions of other users and post local information. More editors are being added as the company grows, he added.

"Local news doesn't scale," St. John said. "I think what we've figured out is that while local reporting doesn't scale, we need a person on the ground as close as they can get. The rest of the infrastructure must scale to support those reporters on the business end."

St. John said he considers himself a reporter at heart, having worked for the New York Times prior to joining Patch. He made the leap from journalist to running a news site because of his passion for local news and what he calls "pathological optimism."

"I'm just a reporter who cares deeply about local news," he said. "But I jumped over to other side" to create a "business model that can sustain itself and doesn't depend largely on largesse to survive."

"I think the solution to local journalism business woes is going to come from within but not just from writing stories but by rethinking our biz models," he said.

Get Patch's Daily Newsletters and Real Time Alerts