Mike Shapiro, a pioneer in hyperlocal for-profit news, unveils a new model

If local news is going to thrive, we need a variety of business models, especially on the for-profit side. Yet, at least among news start-ups with robust reporting capacity, nonprofits are becoming more and more dominant. Indeed, three of the for-profits that Ellen Clegg and I write about in our book, “What Works in Community News,” The Colorado Sun, The Mendocino Voice and Santa Clara Local, have converted to nonprofit status in the past year.

One unique exception is TAPinto, a New Jersey-based company with about 100 franchises. The way it works is that local entrepreneurs start a TAPinto in their community and are able to — well, tap into the mothership’s tech, advertising and training resources. It’s not bad for an out-of-the-box solution, but there are limitations.

Recently, though, TAPinto chief executive Mike Shapiro launched a related business called the Hyperlocal News Network. It’s similar to TAPinto except that publishers have more flexibility to establish their own identity. Sophie Culpepper writes about Shapiro’s new venture for Nieman Lab, reporting that Shapiro told her by email:

There are … hundreds, if not thousands, of existing publishers who are really struggling with their digital presence and would benefit from our technology and back office services, yet want to keep their own branding. Our license model enables them to do just that.

Shapiro spoke with Ellen and me on our “What Works” podcast in April 2022. You can listen to it and read an AI-generated transcript by clicking here. We also wrote about TAPinto in our book, and I’m providing an excerpt below.

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TAPinto is a network of nearly a hundred hyperlocal websites, most of them in New Jersey, that employs an innovative franchise model. The network was begun in 2009 by Michael Shapiro, who back then was a New York lawyer looking to spend more time with his young son after he underwent open-heart surgery (he made a full recovery). Shapiro started a website that he called The Alternative Press in New Providence, where he lived, because he was dissatisfied by the lack of coverage in the local newspaper. As Shapiro tells it, he soon heard from residents of other communities asking him to expand, and a network was born. (The “TAP” in TAPinto stands for “The Alternative Press.”)

Although Shapiro is not a journalist, he said in an interview and on the “What Works” podcast that he takes journalistic objectivity seriously and requires his franchisees to adhere to the Society of Professional Journalists’ Code of Ethics. The way it works is this. For a fee of $5,000, a franchisee can set up shop with what is essentially a turnkey operation: a website based on a ready-made template with backend and technical support, training, and everything else they might need to begin covering local news and selling advertising. Publishers keep 80 percent of whatever ad revenues they’re able to earn, with 20 percent going to TAPinto. Advertising can also be shared across sites, and some editorial content is shared as well. Publishers are required to produce at least one original piece of journalism each day; stories typically cover such topics as neighborhood development issues, feel-good features, and public-safety news. A common arrangement, Shapiro said, is for a businessperson to become a franchisee and employ a journalist either full- or part-time.

Access to TAPinto sites is free, and Shapiro said the $5,000 franchise fee is far lower than what it would cost for a local media entrepreneur to get started on their own. “I think we’ve been able to demonstrate that you can have profitable local news sites that are 100 percent advertising-based, and that, to me, is really important,” he said. “People who are economically distressed shouldn’t have to choose between putting food on the table or buying medicine and finding out what’s going on in their town. So that’s very fundamental to us. And it’s also fundamental on the ownership side. In a lot of these situations, you have to be wealthy to start an online local news site if you want to have the technology and the functionality and stuff we offer.”

Observers we spoke with gave Shapiro generally high marks but said the sites tend to be of uneven quality, which is not surprising given the inexperience of many of the franchisees. Nevertheless, TAPinto represents a genuinely new way of providing local news and bears watching — particularly if Shapiro is able to build out his network nationally or inspires imitators.