News Innovators on the Frontline: San Diego News Network

Posted on 10. Aug, 2009 by Damian Ghigliotty in New News Organization, News Ecosystem, Revenue

When Neil Senturia and Barbara Bry launched San Diego News Network in March 2009, their vision was to create a nationwide news organization of local sites that could cover breaking news, politics, business, sports, lifestyle and entertainment in each respective city.

After watching the San Diego Union-Tribune shed nearly half its employees over the past two years, the husband and wife team saw an opportunity to fill the void with an editorial, development and sales staff of about 20 people supported by outside freelancers and bloggers for their first site. “Ad revenue at the San Diego Union-Tribune has dropped 40% since 2006,” Forbes.com recently reported in a story on the future of journalism in San Diego. As an incentive to pick up those advertisers, as well as additional new ones, SDNN allows its most successful freelancers to take a cut of the ad money generated by their stories, along with a smaller stipend, if they so chose. The site’s full-time staffers get regular salaries. In terms of its readership, the SDNN averages 156,000 unique visitors a month in the U.S., according to Quantcast.

Senturia, an adjunct professor of new venture creation at San Diego State University and a former software entrepreneur, acts as the network’s CEO and software manager. Bry, a former journalist who started her career as a political and business writer for The Sacramento Bee and the Los Angeles Times, acts as the network’s publisher and executive editor. We spoke with the couple last Friday as they sipped Martinis and Pinot Grigio in their hotel room in celebration of the near $2 million investment they received for their second site: Southwest Riverside News Network, which they plan to launch in the next few weeks.

What does the geographical plan look like for your upcoming expansion?
Neil: After we launch Southwest Riverside News Network, we’re going to roll out in another city in Southern California. After that we’re going to start to roll out in somewhat larger cities over the next 24 months. We’ve identified about 20 cities in total across the country, but I can’t tell you which ones yet. What’s interesting is that we picked those cities in varying configurations; some are big, some are small. The way we’ve gone about it is by asking, where is the biggest need and where is the biggest potential for profit?

While we think we know what we’re doing, we’re also willing to concede that we’re not sure whether it’s better to be in Billings, Montana, which has a local University, or Baton Rouge. We certainly want to be in Seattle, Denver and Phoenix, but we also want to be in small cities that get less coverage, like the Twin Cities.

One thing we do know for sure, it’s not a one-size-fits-all business. There are some parameters, but each city is different, so we have to learn as we go. The holy grail is a national network of local online sites working seven days a week, 365 days a year.

How much will that cost per city?
Neil: To do about 20 cities takes about $22 million, and this $2 million covered San Diego and Southwest Riverside. On average it’ll run us about $1 million to $1.5 million for the larger ones and $350,000 to $400,000 for the smaller ones. Plenty of the bigger guys like CNN have thought about this, but the key is in daily execution, cost construction, cost containment and web analytics, which we do a lot of. What we’ve leaned is that this is a business of picking up nickels. You’ve gotta pick them up one at a time, and you’ve gotta bend over to pick them up. There are billions of nickels, but there’s no vacuum cleaner.

In the past I ran a half-dozen software companies and that was great because you build a piece of software and you can sell it over and over and over again. But the news business is different. Everyday there’s a different amount of real news. Some days nothing happens, and some days you blow the door off. It’s the same whether it happens for us or for CNN.

How does your San Diego staff break down?
Barbara: It’s about 20 people, including the two of us. That encompasses the full-time journalists, the sales staff, and the technology staff. And then we have another 20 freelance writers and contributing editors and columnists.

San Diego News Network Newsroom

Neil: On the management side, which includes marketing and analytics, there are 6 or 7 staffers. On the editorial side, there are 8 full-time journalists, and then we have 4 sales people.

We also have bloggers from the community that contribute for free. Those bloggers are important, but the truth is, at the end of the day people want substantive content and you cannot get around that. Blogging is interesting, but it’s like whipped cream on apple pie. If you only had whipped cream, you’d get clogged arteries and drop dead.

How much do your full-time reporters make?
Barbara: Right now they make just below the market rate in San Diego, which is about $60,000, and they get health and dental insurance as well.

Neil: And every single person has stock in the company. Each person is a brand and a part of the process. The view is that if we don’t make it, our employees won’t get anything. You have to understand that a journalist has never in his life had equity. The people who get paid $180,000 a year at the LA Times and The Washington Post don’t own stock, unless they bought it in a public market. So there is a whole concept that says you now have a vested interest in this thing. It is no longer us and them; the worker and the management. Now there’s a correlation between how well we do as a whole and what you make.

But there’s also a correlation between salaries and the economy. When advertising picks back up, we’ll be able to pay our journalists more. We’d like to run cpms of 14, 15, and 16, but right now we’re running cpms of 8, 9, and 10.

What does it take to make a slimmer news organization work efficiently?
Barbara: For one, we’ve cut down on the amount of people proofreading and copyediting a story. Last Sunday there was a New York Times column by the public editor about Alessandra Stanley. Apparently over the years, she had made so many mistakes that at one point she had a copyeditor assigned to her to fact-check her work. First off, we couldn’t tolerate that at SDNN. If somebody made that many mistakes, believe me, they’d be gone. Secondly, in Stanley’s case, more mistakes were then made in the editing process. Ultimately, there were too many fingers on her stories.

Neil: Software is also a key component. I think The New York Times may have the best website and content management system in the world — navigating through their site is like cruising in a Lamborghini — and they easily spend $10 million to $15 million on it. One of the places where we’ve excelled is that we built really good proprietary and easy to use software, which we spent an initial $300,000 on, plus monthly fees to keep it up-to-speed and add new features. That’s nothing compared to The Times, but compared to other small news organizations that are trying to put their papers online, it’s a lot.

Neil Senturia and Barbara Bry

Tags: Barbara Bry, Neil Senturia, News Innovators, San Diego News Network, San Diego Union-Tribune, Southwest Riverside News Network