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What's happening with the Chi-Town Daily News?
February 18, 2010

Dear Cecil:

So what's going on with the online Chi-Town Daily News, anyway, now that it switched to a subscription model from a non-profit news site? Does it have a snowball's chance in hell of succeeding?

— Tony Davis, Tucson, Arizona

Cecil replies:

Too early to say. However, having discussed the concept with Geoff Dougherty, who ran the defunct Chi-Town Daily News (a name I confess I always loathed) and now runs its reincarnation, the Chicago Current, and having subsequently given the matter some thought, I offer the following tentative judgment: it's not as insane as you might think. 

Dougherty's a former Tribune reporter who quit the paper under controversial circumstances. He says that while working on a piece comparing CEO pay against corporate profits, he found the boss of Tribune Company, Dennis FitzSimons, was a bad bargain — the man took home a huge paycheck despite his firm's dismal performance. The story never ran in the paper. Dougherty says he couldn't get a straight answer why, so he resigned. Jim Kirk, former associate managing editor for business at the Tribune, has strongly disputed this account.

Figuring that the future was online, Dougherty started the Chi-Town Daily News in December 2005. The Daily News was conceived of as a Web-only general interest newspaper operating on the not-for-profit public radio-type model, paying its way with a combination of grants, corporate sponsorships, and reader contributions. At its peak the paper had a staff of eight. It collected impressive grants from the Knight Foundation and others and was widely seen as a promising experiment. At the Chicago Journalism Town Hall in February 2009, Dougherty boasted that the Daily News embodied the journalism business model of the future.

Maybe not. In September 2009 Dougherty announced the Daily News was laying off its staff and suspending operation. He says now he realized it would take five to ten years for a not-for-profit entity to become self-sustaining, and the cash to keep things going in the meantime just wasn't there. He told readers the publication would soon be reorganizing as a for-profit entity.

Those who hadn't been paying much attention, including me, thought that meant he'd be charging for online content, which is, to say the least, a controversial notion. We thought wrong. The Chicago Current, which debuted in November, offers its online stories for free, just as the Daily News did. What it charges for (theoretically) is its print edition, home delivery of which costs $5 a month.

Chances are you won't have to pay even that much. If you're an elected or top-level appointed public official in the Chicago area, or simply pass through Red or Brown Line stops between Belmont and the Loop, you get the print edition at no charge. Dougherty says the press run currently is 5,000, and he hopes eventually to distribute 25,000 copies per month.

You may ask: if online content is free, and most recipients of the print edition don't pay, where does the money, never mind the profit, come from? From advertising, half of which appears in the print edition, and half online. For the first ten weeks, Dougherty says he had income of $18,000 and expenses of $30,000, which to the uninitiated may not sound promising. However, if you've ever been involved in a publishing (or any) startup, you're probably thinking: not bad.

That's Dougherty's take on the situation. He says he's covering his cash flow needs, including the salaries of the Current's two other staffers, out of his own pocket at the moment. But he contends he's close to lining up a financial angel, and hopes to be at break-even in six months.

Your next question: Why would anybody pay to advertise in an obscure publication with a limited audience?

Because it's the right audience, or at least Dougherty can make the case that it is. Unlike the Daily News, which attempted to cover the local news gamut, the Current calls itself "Chicago's Place for Politics" and reports on nothing but. The idea is to attract not just political news junkies but anybody who makes, or aspires to make, a living from local politics — including staffers, political consultants and the ex-student council presidents who hire them. (If Dougherty can corner the market on advertising from wannabe lieutenant governors, he'll make a profit right there.)

In short, the Current is going after a niche market, and using a traditional approach to do it. The print edition is what publishing types call a controlled-circulation publication, which may be sold at a stiff price to outsiders but typically is delivered free to a targeted audience. One of the best known in politics is Roll Call, which is sent weekly to members of Congress and the executive branch. It's now owned by the UK company that publishes the Economist, which claims the publication is more widely read in Congress than the Washington Post. Circulation: 18,500. Founded: 1955

Is there a big enough market in Chicago to support a local version? Dougherty's about to find out. Crain's Chicago Business, another local niche publication, succeeded with scoops and in-depth coverage, but has paid circulation and the backing of a deep-pocketed parent. In Springfield, political writer Rich Miller has made a name for himself, and evidently a nice living, with Capitol Fax, which requires minimal capital outlay — but it's a subscription newsletter, a much different model from what Dougherty has in mind.

Then again, if politics is construed to mean "anything the public sector is up to" — and in Chicago it certainly should be — the number of affluent parties with a financial stake in the political process is considerable. The daily newspapers aren't a cost-effective way for advertisers to reach decision makers, and as the Scott Lee Cohen fiasco illustrates, political coverage in this town often leaves a lot to be desired.

So there's an opening, arguably. I remain agnostic on whether Dougherty and his crew have the chops to pull it off, but it'll be interesting to watch.

Getting back to what I presume motivated you to write, Tony, what does this tell us about the future of journalism? Couple things. First, despite talk of the death of print journalism, a print product seems likely to remain an important part of media business plans for the foreseeable future. The Current is far from the first politics-focused publication to arrive at that conclusion — those who know Arlington, VA-based Politico solely as an online entity may be interested to learn it publishes a daily print edition while Congress is in session. At the same time, a Web presence gives a publication immediacy and potential reach. For what it's worth, Dougherty says the Current draws about 23,000 unique visitors a month at present, compared to a peak of 60,000 for the Chi-Town Daily News. (The Trib's Web site, meanwhile, draws 2.5 million.) Second, it's becoming evident there's no advantage in size for size's sake — targeting is all. Depending on what you're trying to do, you may be better off with 25,000 readers rather than 600,000, as long as they're the right 25,000. 

— Cecil Adams
Photo by Pat O'Neil

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