During the past 15 or so years, the local news situation in the United States has been viewed by many both inside the industry and out with increasing despair.

More than 1,800 US newspapers have closed since 2004, according to Poynter. Tens of thousands of journalists have lost their jobs. Dozens of newspapers are now owned by hedge funds that focus on maximising profits.

“I decided I needed to put together the knowledge that I had from a 21-year career at Knight Ridder, and 15 years as an analyst to try to innovate something new in the face of this financial ownership,” Ken Doctor, the Founder and CEO of Lookout Local, told participants during WAN-IFRA’s recent World News Media Congress.

Replacing flagging dailies

“My goal with this, very simply, is to replace flagging dailies as quickly as possible with primary news products. Not supplemental news, but primary news products,” he continued.

“This” is Lookout Local, a digital news company based in Santa Cruz, California, now just over a year old, and according to Doctor, on track for profitability in early 2023.

Lookout has a team of 14 people, which makes it the largest news company in Santa Cruz county, he said.

“Our base is very, very strong at this point,” he added. “We’ve got 95,000+ monthly uniques. We have a diversified revenue model – advertising and circulation.”

“Advertising is huge for us, and it’s all branded content. It works very well,” he added.

As for circulation, Doctor said he deliberately decided not to price Lookout cheaply. “We do not do any ‘Six months for $1’ deals,” he said.

While Lookout does offer trials, and discounts for certain groups, such as teachers, he said it is one of the highest priced local news products in the United States at $187 a year, or $17 a month.

“We could have gotten greater numbers, but we want to build it brick-by-brick at a price that we consider a fair price. And we are staying with that strategy,” he said.

Mission: ‘A better place to live for all’

A key to Lookout’s success is undoubtedly the way it has merged its business model with its community minded mission.

“Lookout aims to make Santa Cruz County a better place to live for all who are here,” Doctor said. “The No. 1 way we do that is the news itself: high quality, non-partisan news, but there is so much more to our community relationship.”

For example, 10 percent of Lookout Local’s membership fees are given to local charities. Members may choose from among five community partners to help support, such as Jacob’s Heart Children’s Cancer Support or Second Harvest Food Bank of Santa Cruz County. 

“People see that, and they value that,” Doctor said.

In addition, Lookout Local routinely features civic groups in coverage and offers these groups free pages, which is something they have done from the start, he said.

Journalism and business based on relationships

“This is our belief,” Doctor said, “we know that the global digital news economy values scale. That is well proven at this time. We believe the local news economy can be rebuilt on relationships, and we are acting and succeeding on both of these truths.”

Requiring registration to get email addresses of their users is a top priority for Lookout. Doctor said they have 18,000 already, and he is confident they will have 40,000 by the end of 2022.

On the advertising side, he said sponsored content was also proving successful for them.

“The promoted content plays very well, and it’s clearly marked as promoted content and not editorial,” Doctor said. “The newsroom doesn’t touch it, and it’s kind of a unique position for these advertisers. It is not sold on the basis of CPM. It is sold on the basis of scarcity, and it is going very well.”

Furthermore, memberships are also going quite well, he said, and Lookout is on its way to where he wants it to be.

“The ARPU is great and we’re getting very low churn, less than a half percent per month of churn, and we’re seeing that of the memberships, 70 percent of them are annual. These are like gold to us,” he said.

As it celebrated its first year in business late in 2021, Lookout Local was already around 75-77 percent of the way to its three-year goal, Doctor said.

Looking to expand to new markets in 2022

“Our model, and the technology, importantly, are built for network expansion. We put a lot of time and money into the front end, really more than a year into this to get it right,” he said. “We can startup a new market in less than 30 days at a low cost.”

Early this year, Lookout will be planning to develop its next three to five markets in the United States, he said.

As they look to expand, Doctor acknowledged there are a lot of moving pieces.

“We want to make sure that we get it right,” he said. “The journalists are local, that they really understand their communities, that’s what’s key, and I think that’s going to be the toughest part of this. Planning it out, getting the capital for it are not going to be problems. It’s going to be ‘How do we get the right people in the right positions who can really execute on this vision.’ “

He also encouraged participants to look into several other relatively young local news ventures that have started in the past few years and are doing well, such as Memphis-based, Daily Memphian; The Colorado Sun, which was started by former Denver Post employees as well as the Long Beach (California) Post.