Led by Axios, local is going national.
The “Smart Brevity” news publisher announced Monday that it planned to expand the number of cities it serves as part of its Axios Local program from six to 14 by the end of the year.
In its first four months, the Local program has racked up more than 350,000 subscribers, and its emails feature an average open rate of 35%, said Ted Williams, its general manager.
Axios Local is on pace to generate between $4 and $5 million by the end of 2021, and it forecasts that it will triple that number in 2022. The Charlotte outpost alone is on pace to net more than $2 million in revenue this year, Williams said.
“We understand the unit economics from a financial standpoint, and we are confident that we can launch newsletters that attract a really big audience in a short period of time,” Williams said. “Those are the two things that really drove the announcement to get into eight additional cities this year.”
The swelling of the Axios Local network comes as the local newsletter ecosystem continues to heat up. Publishers like 6AM City, WhereBy.Us and Overstory have rushed to plant their newsletter flags in cities across the country. Meanwhile, platforms like Substack and the Tiny News Collective have sought to “arm the rebels,” giving journalists the tools to create local newsletters before taking a small cut.
Fueling this local news gold rush is a shared hypothesis: By treating email as the primary product, a small team of locally based journalists can grow a financially stable news operation with little overhead.
Axios Local has expanded rapidly since January
Axios Local began in December when Axios acquired the six-year-old Charlotte Agenda, an independently profitable newsletter that serves the largest city in North Carolina. In January, the publisher began rolling out Axios Local outposts in Denver; Tampa Bay, Fla.; the Twin Cities; Des Moines, Iowa; and Bentonville, Ark.
On Monday, Axios Local announced its expansion into eight more cities: Atlanta; Austin, Texas; Chicago; Columbus, Ohio; Dallas; Nashville, Tenn.; Philadelphia; and Washington, D.C.
In each outpost, Axios Local hires two reporters who work in tandem to produce a daily newsletter. While the final products differ slightly, most newsletters feature six content sections, called “cards,” and at least one piece of original reporting. The journalists curate reporting from other local news affiliates, striving for a mix of long- and short-form material that balances gravity and levity.
Axios Denver has become an early success story for the program, accruing nearly 100,000 subscribers since its Feb. 22 launch. Its two reporters, Alayna Alvarez and John Frank, divide up the reporting based on their respective strengths, and their efforts have helped Axios Denver stand out in a saturated media ecosystem.
We provide value by being the people that bring it all together and tell you why it matters.Axios Denver reporter Alayna Alvarez on the team’s role in the Denver news landscape
“There is a ton of news in Denver, but it’s really fragmented,” Alvarez said. “We provide value by being the people that bring it all together and tell you why it matters.”
Axios Local balances regional and national advertising, with plans for future revenue streams
Axios Local employs a similar model to its parent publication: generating the bulk of its revenue through newsletter sponsorships, which keep its email product free and allow it to grow unencumbered by a paywall.
Unlike Axios proper, the Local program places a greater emphasis on featuring regional advertisers and hopes to split its advertising 50-50 between local and national partners, Williams said.
As Axios Local expands into new markets and proves its viability, it will have an easier time drumming up local business, said Jeff Kupietzky, the CEO of email engagement platform Jeeng (formerly PowerInbox).
“As they prove success in each expansion, it will be easier for them to show the results in new markets and attract new advertisers,” Kupietzky said.
As [Axios Local proves] success in each expansion, it will be easier for them to show the results in new markets and attract new advertisers.Jeff Kupietzky, CEO of email engagement platform Jeeng
However, working with local advertisers presents a number of logistical challenges, particularly when it comes to operational efficiency. For example, the Axios sales team could strike one deal with a national client to sponsor all 14 newsletters, whereas it would need to negotiate 14 deals to find each newsletter a local sponsor.
These kinds of impediments to scale have thus far prevented national publishers from operating a network of local outposts, and Axios Local will have to prove it has the infrastructure to overcome the challenge, said Dan Oshinsky, the founder of the email consultancy Inbox Collective.
“Any organization that tries to utilize its scale to test, be creative and find new opportunities is going to have a chance to succeed in this market,” Oshinsky said. “They certainly have plenty of challenges in terms of execution on the hiring side, on the journalism and on the monetization side.”
Axios Local also plans to introduce additional revenue streams to its newsletters, modeled off the success of its Charlotte outpost, including job boards, sponsored calendars and membership programs, Williams said.
Thanks to its name-brand recognition and streamlined plans for expansion, Axios Local stands to benefit from a significant first-mover advantage in the emerging local newsletter landscape.