How Axios is tackling local news: newsletters from small teams, in more markets
Axios is popping up local news-focused newsletters across the country, with ambitious plans to be in 25 markets in 2022. But local news is a challenging undertaking, and many have failed before it. How is Axios differentiating itself? “A lean, pragmatic approach,” said Ted Williams, gm of Axios Local. That means small teams, in many cities.
Williams was the founder of Charlotte Agenda, a bootstrapped company that started with an initial investment of $50,000. It was acquired by Axios in Dec. 2020, and kickstarted the publisher’s move into local news.
Axios’ local news expansion plans
Axios has hired 20 new reporters (and three associate editors) to launch local newsletters in eight cities between Sept. 20 and Oct. 4, including Atlanta, D.C., Austin, Nashville, Chicago, Philadelphia, Columbus and Dallas. Each city has a two-person team (except for Atlanta and D.C., which have three reporters each) covering local news for Axios’ audience of “smart professionals,” Williams said. Reporters are based in the cities they are covering focusing on topics such as local government, real estate and business, Williams said. The tech, design and copy editing for each newsletter are handled by centralized Axios teams.
The Axios Local newsroom has 30 to 40 people total, according to Nicholas Johnston, Axios’ publisher, and the “aspiration” is that one day it’ll be the same size as the core Axios newsroom of 120 people. “We are trying to hire the two best journalists in each market,” Williams said. These teams will “grow as the audience grows and revenue grows… rather than go in and hire really large teams and just burn through cash quicker.”
Axios Local is planning to move into 11 more markets by the third quarter of 2022, which will bring it to a total of 25 markets, according to Williams. Axios Local will decide which markets those will be by the end of this year, Williams said. Its current slate of 14 newsletters has around 400,000 subscribers, and open rates hover at an average of 35%. Charlotte’s newsletter has the most subscribers, followed by cities like Denver, the Twin Cities and Tampa Bay, which all have between 50,000 and 100,000 subscribers, Williams said.
The focus on fewer, long-term advertisers
Axios Local is on pace to bring in somewhere between $4 million to 5 million this year, according to Williams. Revenue comes from email sponsorships from both local and national advertisers. National advertisers can choose which combination of markets or which region they want to reach via Axios Local’s newsletters. Each newsletter has an ad at the top of the email, and then two branded content units within the email. Pricing differs based on the size of each market (smaller markets like Des Moines have lower rates, for example). Williams declined to share those rates.
The strategy, he said, is to prioritize long-term clients over having “a ton of clients.” The six-year-old Charlotte Agenda newsletter (now called Axios Charlotte) has about 30 advertisers on annual sponsorship deals, including Bank of America Blumenthal Performing Arts and Atrium Health. Each newsletter usually starts off with about a dozen advertisers, Williams said. Axios has a mix of centralized ad sales teams in certain markets and regions across the U.S., according to a spokesperson. There are larger revenue teams in D.C., New York and San Francisco, as well as Axios Local revenue leads living in Denver, Columbus, Austin and Charlotte. The company will hire more people across all teams next year, the spokesperson said.
“If you can generate revenue at a local level, with larger national buyers interested in a specific amount of cities, you can start to diversify revenue and don’t get ahead of your skis with too many costs,” Williams said. Axios Local will also introduce job boards to some newsletters in the fourth quarter of this year and roll them out to all markets in the beginning of 2022, he said, after the success of Charlotte Agenda’s job board, where each listing costs $250.
How are new cities chosen by Axios Local? It’s a combination of editorial and advertising factors: where Axios’ other newsletter subscribers live, where Axios’ web visitors live, what markets Axios’ current advertisers are interested in and what the overall advertising ecosystem looks like in specific cities.
“This shouldn’t be a hobby or charity. We need to build a successful company,” Johnston said.
Facing the challenges of local news businesses
But local news is suffering. More than 90 newsrooms have shuttered since the pandemic began, according to The Poynter Institute.
While local Axios newsletters appear to be “robust,” news outlets like The Denver Post “have much larger staffs and are providing important accountability journalism, whereas Axios can really only skim the surface,” said Dan Kennedy, a journalism professor at Northeastern University. He worried that Axios’ local news push could “come at the expense of news organizations that are putting much more resources into covering the news.”
Melissa Chowning, founder and CEO of audience development and marketing firm Twenty-First Digital, works with a number of local publishers and called the space “crowded.”
“It feels a bit like a slow-moving collision between national digital publishers more aggressively pushing into the local space and the local publishers who have been in these markets for a long time,” she said. However, “healthy competition” can produce more local investigative and civic journalism.
Johnston believes what differentiates Axios’ local coverage is its newsletter model, rather than a business dependent on traffic and clicks for ad revenue. “Newsletter subscribers have demonstrated an intent to be with Axios and ask to be emailed every day. I’m not worried in the morning: ‘I hope I have a wacky story that will trend on Facebook that people will click on.’ I can email 85,000 people every morning, which is a much stronger business,” he said.
Sights set on paid newsletters
Will Axios Local newsletters one day become paid newsletters? Johnston says he hasn’t thought that far ahead. However, he said newsletters that were launched as free will remain free. Subscription products will be “additive,” he said.
Johnston, who previously served as Axios’ editor-in-chief before he was named the company’s publisher this month, is tasked with overseeing Axios’ first foray into the paid subscription business. Called Axios Pro, a handful of paid newsletters will launch at the beginning of next year “on deals and dealmakers,” he said. Johnston is currently in the midst of hiring reporters to launch those newsletters. “I don’t even want to guess the number of journalists we will hire in the next 12 months to launch Axios Pro and take Axios Local into the stratosphere,” he said.
In just the last month, Axios has announced a number of promotions. On Sept. 23, chief revenue officer Fabricio Drumond was promoted to chief business officer. Sara Kehaulani Goo was promoted to editor-in-chief. Shane Savitsky and Emma Way were promoted to deputy managing editors for Axios Local, and Hadley Malcom was promoted to editor of Axios Local. Ryan Kellett, who previously served as the senior director of audience at The Washington Post, is now vp of audience at Axios.
This article has been updated to reflect that Axios Local will be in 25 markets next year. A previous version stated that the publisher’s local division will be in 23 markets.
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