Memphis Flyer

Chris Davis

Eric Barnes

The Daily Memphian, a new, ambitiously scaled and digital-only print news source, launched online this week. When the venture was announced earlier this year, the company’s president and executive editor Eric Barnes said such a venture became necessary when Memphis’ traditional “newspaper of record,” the Gannett-owned Commercial Appeal, lost considerable editorial autonomy. Many of the new startup’s first hires were marquee reporters and columnists siphoned away from the CA — refugees from the increasingly non-local local newspaper.

Barnes recently spoke with The Flyer in a brief but far-ranging conversation about sustainability, availability, representative news rooms, and the potential risks and rewards of going big and all digital.

Memphis Flyer: Obviously, you’re not starting from nothing. You’re building off The Daily News‘ legacy with so much banner talent direct from The Commercial Appeal. But with this launch, The Daily Memphian goes from zero to light speed in some ways. There’s lots of digital news out there, but a startup daily of this scale is barely charted territory. Do you feel the eyes of the industry on you or are you too busy to worry about all that?

Eric Barnes: I’m not worried about industry pressure, and there are people watching us. It’s been interesting. When we started talking to people nationally about other startup digital dailies, we talked to everybody from this really cool little website in Philadelphia to the Graham family that used to own The Washington Post and still owns a bunch of TV stations. It became clear that what we were after was quite a bit bigger and more ambitious than what other people were doing — and they were still incredibly encouraging about doing it.

Most people that have started something like this — for profit or nonprofit — have started very small and grown. We made the calculated decision that we would go big and launch with a really big staff, making a lot of noise by hiring talented, popular writers. And we would come out with a big editorial mission rather than a small mission we’d then expand upon. I think by and large nobody’s done that. At least none I’ve found. Though I’m sure someone from Des Moines or somewhere will call me tomorrow and I don’t mean any disrespect.

Subscription is hard. The tech is hard. The customer service is crazy hard. And on top of the mechanics, you also need unique content people are willing to pay for in addition to what they already pay just for digital access. And all of that’s in the context of a redundant media environment where the same information may be available in other spaces, often for free. How are you navigating all of this?

A few things. We wanted to come out with a good subscription signup process. So we went with a company called Piano. They handle everybody from Condé Nast’s online magazines on down. We wanted it to be simple, so there’s only one offer. We’ll have other offers down the road. But we wanted to be $7 a month, first month free. Don’t have to think about it or choose. I think a lot of online publications fail because they make it so hard to sign up. There are lots of options. You’ve got to tie it to your print subscription. You’ve got to enter a special code. It’s all intentional and understandable, but we wanted to keep it simple.

I’m probably going to overuse the word sustainability, so I’ll apologize for that in advance. You guys had, I think, $7 million at startup, which is pretty great. But this is a business where community-spirited billionaires with nothing but the best of intentions have struggled with the cost of building and keeping modern newsrooms. Is there enough revenue and readership in Memphis to support two full capacity dailies?

Obviously, we think so, but it’s not proven yet. We think our projections are modest and doable. We’re talking about, by year 5, having over 20,000 paid subscribers at a relatively low price point. We may go up from $7, but we’re not going to go up dramatically.
I’m not going to give you the paid subscription numbers that we have now, but I will say we’ve exceeded our expectations at launch quite dramatically. So, early signs are good but there’s no doubt it’s unproven. This is uncharted territory. I think we do know, to be a daily news source of high quality, and have the number of journalists you need to do that, I don’t think it can be free. There’s a place for free papers, I’m not saying it’s an impossible model. But to have a newsroom of over 20-people, covering the city on a daily basis, there’s not enough ad dollars out there. So many advertising dollars go to Google and Facebook, and there’s not enough left for the rest of us. We are going to have advertising, and we do have advertising. And we’ve exceeded our numbers on that too. But there’s definitely risk involved.

Do you hope to eventually be fully reader supported? You throw out the number 20,000 paid subscribers in 5 years. With $7 a month subscriptions, is that the number or is there a target number of subscribers for reader-supported sustainability?

Our goal is definitely to be sustainable so we don’t have to live grant to grant and constantly be raising money. For us to fulfill a mission of high quality journalism, people are going to have to participate in that. You see it at the national level. At the big metro papers like Boston.com, Philly.com, Seattle — papers that are below the New York Times but bigger than Memphis. They’re all going harder and harder on their pay wall. And they’re seeing success. It all comes back to, whether you’re for profit or not, you want to run your publication like a business. You want to pay your own way and don’t want to be forever dependent on fundraising.

Non-profit has been a big buzz in media for a while and I get a lot of it. But what I often find myself telling people is it’s not some kind of magic status that makes all the sustainability problems go away. All the same essential challenges exist. You’ve got to attract and retain an audience while also covering payroll. And you’ve got to provide content people want badly enough to pay for it. So maybe we can address myths and realities of non-profit, and how maybe it changes what you do as a publisher.

It doesn’t change a lot. There aren’t a lot of limitations that come with that status. We can’t do endorsements, but I don’t know that we would have done endorsements anyway. More and more local papers are moving away from endorsements. There are at least 200 non-profit news sources online around the country. Some have chosen a niche or advocacy, but there’s a full range of stuff. I tell people all the time, one of the most successful businesses in Memphis has to be Methodist hospitals, and they’re a non-profit. But a very sustainable non-profit. Revenue producing. High-quality employer and a big contributor to the community. I’m with you 100%, non-profit doesn’t solve the problem. And non-profit doesn’t make it easier.

You say you can’t endorse. But does this change in any way how you cover government or politics otherwise? Also, you’re a non-profit, but you sell ads? How does that work?

It does not affect the way we’re covering government or politics. There is a difference between advertising and sponsorship and if we bring stuff in that’s deemed to be advertising in the eyes of the IRS, it probably means we end up paying taxes on it. And that’s fine.

Watching our non-profit cultural institutions grow over the years I’ve noted how they are shaped by and service their audience and donor community — which they should, and even have to to survive. But it’s not the same as reflecting and serving the community at large. That’s a tough line to walk and I wonder how will TDM be publicly and proactively transparent?

One thing is, we’re trying to be as accessible as possible to civic groups, clubs, churches, or anybody who wants to get one of us to come speak. And I don’t mean that in a token way. It’s very interesting to meet people and hear what they like and what they are interested in and want. The board is transparent. All the board members are listed on the website. Beyond that, there are some things we won’t be transparent about. Somebody said everything we do editorially should be transparent and public. But I’m not going to do that. There are a lot of stories we’re working on and we want to be first to publish. So there’s a certain amount of privacy. In the end, what matters is what we do on the site and that we’re judged by the work we do on the site.

Can the public view your financials? See big donors. Is any of that required on your 990 tax form?

Everything required to be on 990s will be on 990s. The money’s been donated anonymously and that’s kosher. The money went through the Community Foundation of Greater Memphis and so that’s not required to be disclosed.

A lot of pre-launch criticism has focused on representation in the newsroom. I don’t want to be too redundant, but I tend to agree that when you take a birds eye view — or almost any view — there does appear to be a crisis of representation in Memphis print media. Do you think it’s a crisis? And, given an opportunity to build a newsroom from the ground up in a majority African-American city did you have any kind of strategy for building a more representative newsroom?

We were very intentional in trying to build as diverse a newsroom as we could. Both male and female and with people of color. We got close with female participation. We’re somewhere in the 45-percent range. We fell short on what we would have liked for people of color. We’re going to be 20-25-percent African American. That’s pretty standard. I’m not making excuses, but that’s just kind of the world we live in. The number of people of color in journalism is very, very small. The CA was in that range. Otis Sanford has talked at length about it. This has been a problem as long as he’s been in journalism. Even when newspapers were making huge profits, they were not able or did not find ways to crack that code and find ways to make newsroom more representative.

When we were hiring we had criteria. We wanted people with a print journalism background. We wanted people who had daily or near daily experience because the grind of that is not to be taken lightly. And we wanted people who are in Memphis and had covered Memphis for a long time. That meant we weren’t going to go out of market. And we weren’t going to hire kids out of college. So our pool of people was very small. That also meant, when a handful of African Americans turned us down for various reasons, our pool got really, really small. I’m proud of the people we’ve hired.

I get it. We see the world through our own eyes. I try see the world as broadly as I can but I’m still a 50-year-old white guy from Tacoma, Washington. That’s why it’s important for all companies, maybe newsrooms in particular, to be diverse. Because we see things through our own lens. The other part of this, I’ve said, and will keep saying, is that we should be judged by the work we do. If day after day after day the front page is a bunch of 60-year-old white guys who work and live on the Poplar corridor, then I’ve failed miserably. If the stories we write about don’t look like Memphis in all its complexity and diversity then we’ve failed.

We’ll come back to this more in depth later. I also want to talk about the digital divide a little. And also briefly, because I want to revisit this in depth at a later date in regard to another project I’m working on. But the post-pulp environment creates information monopolies. There’s this idea that “everybody has a phone,” but in reality there are so many obstacles to digital access. Is there a strategy for serving the whole community or are we approaching a kind of trickle-down theory of information?

We are going to be as aggressive and smart and creative as we can be in getting access to The Daily Memphian regardless of whether or not they can afford it. We don’t want to leave people out. Simple things. I believe we’re already free in the Shelby Co. libraries. We’ll get to the suburban libraries soon. We’re free to all teachers. We’ll possibly be free in schools and other public spaces where we can take down the paywall and make access available. Then we’re going to talk to more and more people. And I’m open to ideas about how we balance financial sustainability with access.

And can I say one more thing on the diversity front?

Sure.

We will be starting an internship program that’s for everybody — black, white, male, female. But we will have a particular emphasis for people of color getting into journalism. That’s another small but important way we can start getting more African-Americans, and more people of color into journalism.

The Daily Memphian is available now at  dailymemphian.com