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In print and broadcast
Along mid-coast Maine, a former textbook editor upends the pattern of newspapers starting websites
By Bill Densmore & Norm Sims
Jul 13, 2005, 22:35

VILLAGESOUP.COM
Richard Anderson, founder and president
Derek Anderson, publisher
Ron Belyea, general manager
Lorie Costigan, Times editor
Jill Lang, former managing editor.

VIEW ONE-PAGE PROFILE WITH AUDIO/VIDEO LINKS
READ VILLAGE SOUP'S EDITORIAL MISSION

When Richard Anderson walks downtown Camden, Maine, there’s a palpable skip in the gait of the 64-year-old former Chicago book-publishing entrepreneur. His pace slows as he walks by the French & Brawn delicatessen on the corner of Main and Mechanic streets, then speeds up again for the last 200 feet up the hill to the walk-up entrance of VillageSoup.com. It seems as if every third passerby is a friend or customer, worthy of a hello or a quick chat.

His eyes brighten when he remembers the story of the video camera.

It was in 1998 that the camera was installed in the storefront window of French & Brawn, looking out at the street of spiffy little shops – very few chain-store names here – which line the roads for a few blocks around Camden Harbor. Camden has community-minded people, with cultural interests, retirees who are wealthy, marine and outdoor-oriented people. And so people took notice of this piece of electronics because it wasn’t just a video camera – it was a “webcam.” Around the clock, day-after-day, the faces of passersby, converted to bits and bytes, moved through wires to the VillageSoup offices, across a high-speed link and into the Internet cloud.

Anderson liked to think of the video camera as a media metaphor. At first it seemed a modern version of the soapbox. There were those who loved it. Teen-agers would ham it up, parents would bring their young children down to the storefront at the holidays and beam a few of the kids to grandparents online a few thousand miles away. It was a community snapshot.

But then the mood changed. There were those who would avoid the camera’s incessant prying, not willing to have their perambulation of main street documented and perhaps recorded by who-knows-who -- like some precursor of Big Brother -- an inadvertent extension of the post-911 surveillance cameras which now grace lightpoles in Boston, Washington, D.C., and some other major cities. It didn’t help that one of the people concerned was balladier Don McLean (“American Pie”). Then the CBS Evening News showed clips from the webcam one night.

The owners of French & Brawn – Anderson’s son, Todd, and daughter-in-law – began to worry their store was viewed as invading the privacy of Camden’s elite citizenry. There was talk of a boycott of the store. The Anderson’s decided the camera had stirred up enough controversy, and they removed it after three months.

“That was fun!” Anderson recalls with a wide-eyed smile. Call it an experiment or a stunt. For Anderson, it was a playful attempt to document the faces of a community. And when it became a referendum on the notion of privacy, that was OK, too. For if a journalist or cyberpublisher – what do you call the owner of a local news website? – can’t test the edges of community and privacy, who shall?

Since Dec. 9, 1996, Anderson and his son, Derek, have been breaking new ground in local journalism. That’s the year they began began “k2bh.com” – “click to be here” --, a website focused on local news for what is called the “Midcoast” region of Maine. In 2001, they renamed it VillageSoup.com, after a focus-group session in which they tried to think of a name that implied a warm stew of ideas, words, photos, ads and listings – a home-style concoction not fancy but filling and good for you. For a logo, they picked a big orange dot, plastering it on cars, buildings and sponsorship venues.

About the same time the Anderson’s started what became VillageSoup.com, America’s newspapers were taking baby steps in online publishing. Papers started up websites. At first, crude software shoveled the day’s print stories online, lightly embellished. Gradually came photos, then some audio and video. Faster more sophisticated software allowed sites to being to look less like recycled print and more like an entirely new medium.

By 2003, the Andersons were doing the opposite. With a rapidly maturing website, they began to think about starting a couple of weekly newspapers. Never mind that Camden (pop. 5,254), Rockland (pop. 7,609), and Belfast (pop. 6,381) already had weekly papers. Village Soup Gazette and Village Soup Times would be different – built in large measure from stories which began online, the papers were colorful and stylish. And they were different. The Times launched Sept. 10, 2003. The Citizen launched June 24, 2004. So much so that in early 2005, the New England Press Association called them the best small weeklies in New England.

The nation’s newspapers were trying to port print to web. The Andersons were porting web to print – and it was working. Eighteen months after starting the papers, they were billing $1.4 million in annual revenues on top of $600,000 from web advertising, databases and custom website development. Starting the newspapers, the Andersons decided, had increased web revenues by 50%, because the papers promoted the web, and vice versa. And they were competing with other weeklies at the same time.

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Richard Anderson, 64, was born in Burlington, Iowa, and married his high school sweetheart, Sandy, 43 years ago. He was a math teacher and got a Ph.D from University of Iowa in the administration of educational research. He worked in Boston in publishing, during which time he discovered Port Clyde and Camden, Maine, in 1969-70. He worked for textbook publisher Ginn & Co., then left for Chicago and started an elementary and high school textbook production company called Ligature Inc. It took a visual-verbal team approach to textbooks. In one of the textbooks, Ligature was described as an educational research and development corporation in Chicago and Boston that develops “education materials that bring visual-verbal learning to the tradition of the written word.” The publishing ventures were shared with big publishers such as Houghton Mifflin, which paid the costs and marketed the books. At one time, Ligature 300 employees and produced texts with a distinct point of view. But Anderson shut down Ligature when he felt textbooks had become so political that they could no longer have a voice or point of view. But by that time, the royalties from years of production deals with major textbook publishers had built into a steady flow of cash, and Anderson needed something to do with it.

With Ligature Inc. reduced to a holding company for royalties, and Anderson not even 60, he began looking for something to do. First, he and Sandy accepted the call of his elder son to move and join him in Camden, a town favored by retirees which is at the south edge of Penobscot Bay, one of the world’s most spectacular recreational sailing venues. Each summer, dozens of windjammers clear Camden Harbor for daily- or week-long cruises amid scores of craggy-shored islands and reaches. Captains of American industry own homes here. Ninety-five prercent of VillageSoup’s intended market had Internet access, and 45% had broadband connections available via cable or phone.

Taking up residence on a point overlooking the harbor, Anderson was intrigued by the experience of his younger son, Derek, who had become a database expert before joining Ligature’s product-development operation in the company’s waning days of operation. Rich had watched textbook publishers consolidate, and saw how the result was an unwillingness to take political risks, and a diminishing of the ability to follow ideas that would produce niche products. He could begin to see this happening in the news media, as well. He could see news voices becoming more generic. Larger newspaper groups were cutting quality to recover high acquisition costs as family and smaller operators sold out. He could see it right in Camden, where the 170-year-old Camden Herald twice-weekly had changed hands three times in less than a decade, and was now owned by a South Carolina partnership, Crescent Media. “Is profit maximization a natural law?,” asks Richard Anderson. “Ten to 15 years from now, we’ll see the shortcomings in that system. Eventually we’ll see the trade-offs for always seeking the cheapest alternative.”

Derek had been a political-science major at Hobart College. He and his father had an idea: Could a local website add a fresh dimension to the media mix? The VillageSoup “model” emerged. It would involve both feet-on-the-ground community journalist and citizen “opinionists.” With unlimited space, it would welcome contributions from businesses and organizational publicists. News would be pumped online instantly, with the immediacy of radio or television, and digested, summarized and extended weekly in print. But VillageSoup online would not be known as news organization, the Andersons decided, instead it should be thought of as a community, an extension of the physical communities it served.

Village Soup would also be a family affair. Derek would serve as publisher and general manager and his sister, Holly, would be one of the most prolific reporters.

After five years only on the web, the family began to realize that their news-gathering and community-building efforts were too expensive to be supported from web-advertising alone. “And we didn’t see the print advertisers coming on board fast enough,” Richard recalled. Initially, they required website users to pay a subscription fee for access. But advertisers complained that this limited the audience which would see their ads, and the Andersons dropped this approach. Revenues were growing, but not fast enough. Meanwhile, they were hearing on the street that the new owners of the Camden Herald were cutting corners, and disappointing advertisers. The idea began to form: Why not go after print advertising revenues to support and market the web operation – pushing more revenues gradually online?

It was 2003, the Courier publications in the area (weekly newspapers) had been bought up by a South Carolina company, Crescent Media. With the addition of the VillageSoup weekly newspapers, there were now three competing weeklies in Belfast and two in Camden. In Belfast, there was still an independent weekly competing with Crescent and with VillageSoup’s new Gazette. The Anderson’s bid to purchase the independent for $150,000. On the weekend before the closing, Crescent won with a bid three times higher. “As a family, we talked about the decision to do the paper,” Rich recalled. “ It was a much easier decsion to make because of our competition. They were doing stupid things. Because they were so belligerent and so snarly and dismissive of us. We were getting the word on the street that advertisers were really getting upset with them.” The Crescent papers would banish references to VillageSoup from news accounts.

Starting a newspaper from scratch in a competitive market would have seemed like folly. But the Andersons already had relationships with hundreds of advertisers – including real-estate agents and auto dealers who using database services and listings online. The kind of advertisers which are a newspaper’s bread and butter. “There wasn’t a need for another newspaper when we started,” Rich recalled. The existing newspaper was over 100 years old and adequate. But after it was bought, Rich felt it changed. “The Web gave us a brand and a reputation for quality journalism. When we started the newspapers, they expected a higher quality from us.” And quality is what they delivered. The Times won a newspaper publishers association award as the best weekly newspaper in Maine under 5,000 circulation when it was a year old. In February, 2005, it won a similar award as best weekly newspaper above 5,000 circulation (it had grown) in all of New England, at a time when it was less than a year-and-a-half old.

By May 2005, VillageSoup.com projected to end the year with up to $1.4 million in print advertising and circulation revenue, and $600,000 from online operations. The goal is break-even operations. “There are certainly a lot of things that could have gotten us hwere we are a lot faster if we had been more astute,” said Richard. “I’m basically a content person and I love content, so neither one of us is particularly astute marketers.” Also in June, Derek estimated Villlage Soup was sending monthly invoices to more than 700 advertisers. A little under one third of print advertisers were also running on the web each month, and he estimated three quarters of all advertisers were running in both places at least once a year. An estimated 300 invoices were for print-only ads, 200 for web only and 200 for both.

“The opportunity is at the granular level,” Rich said. “On the financial side, for the amount of money we have invested ($5 million), there’s huge opportunity if we can get this model established. Nobody’s taking our approach of online first . . . We’re treating the Web site as community online — as Main Street for the town. No one has taken this approach to building community . . . Beyond the financial promise, it’s just the enjoyment I get from living in Camden, Maine, and making something happen in a town. I’d like to see more going on in lots of communities.” The approach is especially important in the United States, says Anderson, where a flattening and coalescing of the world’s economies is forcing American’s to compete with lower-priced foreign manufacturing labor by relying more on creativity, innovation and knowledge. “The economy of the future is driven by creativity,” says Anderson. And the cultural-creatives who congregate in places like mid-coastal Maine want institutions which contribute to community.

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By the summer of 2005, the Andersons were reaching another crossroad. Amid soaring revenues from the decision to add print to web, the family was finding expenses had soared, too. It was becoming a challenge to managing growing revenues which shrinking expenses and maintaining quality. Ligature Inc. royalties had supported the investment of $5 million over nine years.

If mid-coast of Maine was too small to support a high-quality community-building service with several more journalists than print-only news organizations of similar size, would they have to trim their sails? Or could they license their concept to other parts of America, adding a new form of royalty stream to the Ligature Inc. heritage? “We could reach the break-even point with some major changes,” said Derek. “[But] they key to making money is the installation of the system at other papers.” In February, 2005, VillageSoup licensed its software and system to the Current Group of weeklies surrounding Portland, Maine, 50 miles south.

“You can’t expect a weekly news staff to also be real time online,” says Richard. “There has to be some additional staff. We’re not producing New England’s best weekly newspaper without spending more time than the Courier Group is spending or any of the other non-New England’s best weeklies. So we are spending more and people are recognizing it and seeing it. And that’s exciting, because you’re going to give a better quality product. And where we are going to get our new revenue is online.”

The letters and comment section of VillageSoup is largely unfettered. Foul language is censored. Personal attacks are dealt with on a case-by-case basis. He says when commentary becomes too personal, an e-mail asking the parties to calm down has always done the trick. Government and community stories have the most hits on VillageSoup.

Richard says VillageSoup maintains a 4,000-business online database – like a “yellow pages” for the mid-coast region. The listings are free. But about 200 of those businesses have chosen to purchase “enhanced listings”. These listings link to web pages the businesses maintain, or to webpages built by VillageSoup for the specific business. Some newspaper websites would worry about providing the free basic listings. But Anderson sees it as a prospecting opportunity – and a 200 takers as perfect examples of why the laggards should ante-up. “We haven’t even scratched the surface of enhanced listings at $19.95 a week,” he says. “And we’ve got 3,800 to go.”

Online revenues come from traditional banner and button ads, inventory listings, enhanced directory listings,online classifieds and rentals, and a percentage of sales to ticketed events. While the site is generally free, after 30 days stories roll over into a subscription-only archive open to users called “patrons” who pay $39.95 a year ($10 a year if they subscribe to the newspaper). “We tried at one point doing for pay to get into the site completely,” Derek says. “And what we heard from the businesses, they said, ‘You are doing what the newspapers are doing for us, you are bringing us the same people day in and day out where when you were just with free access you never knew who was going to stumble on you.’ So we tried that for a period of time, we backed away from it but we did keep some for-pay features on the site.” They are also experimenting with asking users to pay to receive a daily email advising what’s new on the site such as: “Let me know when a $200,000 house in Camden comes on the market.”

Q-and-A

What they say: The newsman, the auto dealer,
the town manager, the business leader