September 21, 2021

6AM City, a group of local newsletters based in Greenville, South Carolina, has been operating largely under the radar since 2016. It ramped up in a big way Tuesday, announcing plans to triple in size from eight to 24 markets by late this year.

It joins Axios Local and other players (Patch, WhereBy.Us) in the crowded local digital newsletter space, serving up a five-day-a-week mix of aggregated news, some original reporting, and supporting ads.

Axios Local, which launched earlier this year in six cities, itself plans to expand to 14 by the end of the year and 25 early in 2022.

There’s no secret what’s driving the growth — an opening left by shrinking legacy daily newspaper reports. Those cost more and more as print subscriptions now run to mid-hundreds of dollars annually and digital content is moving behind hard paywalls.

The local newsletters, by contrast, have an attractive price point for readers — free. They arrive first thing in the morning and provide a quick read about news and local attractions. That’s also a fit for younger mobile audiences, most of whom have no affinity for the newspaper format in the first place.

The prototype was invented (or at least popularized) by Ted Williams, whose Charlotte Agenda quickly grew to business success after its 2015 launch. Williams sold his business to Axios at the start of 2021 and now is general manager of the Axios Local group.

I spoke to co-founder and COO Ryan Heafy, who filled me in on 6AM City’s unusual backstory and the appeal of scaling this fall.

Neither he nor co-founder and CEO Ryan Johnston, both in their mid-30s, are from a publishing background. Heafy is a mechanical engineer who worked for Sikorsky at the start of his career. Johnston was a management major who launched clothing businesses while still in college and right after graduation.

Their route into media, Heafy said, was that Johnston’s family owned a group of community newspapers and were beginning to see the writing on the wall for the print model.

The two met in a Leadership Greenville program and began to pilot 6AM City five years ago. Focusing at first on mid-sized southern markets, Heafy said, “we are now able to launch in 60 days with an investment of $250,000 and reach break-even in 18 months” with big profits following after that.

Target cities are now nationwide, Heafy said. He and Johnston have developed a set of metrics, including measures of what they call “pride of place” to identify the best fit for what they have to offer.

With close ties to local real estate and development groups, he added, coming out of the pandemic shutdowns enhances the appeal of their mix.

As time goes on, Heafy continued, the selective editorial focus has sharpened. “We don’t do investigative reporting, and we steer completely clear of politics” — topics newspapers continue to emphasize as their strategic strength.

Instead, 6AM City is heavy on news about small businesses and development, local events and the dining scene and charity and philanthropy. That draws advertising interest in the local business community. “We even are beginning to have development groups — in Lakeland, Florida, for instance — invite us to come in.”

Like Axios Local, a 6AM City newsletter has two staffers (“boots on the ground,” Heafy calls them) in each city. The reporters so far have tilted to journalists starting their careers, “younger staff willing to take a leap of faith” on an untested concept, he said.

The first staffers have been learning as they go, Heafy added, and some more experienced journalists are being added to the mix (of a staff now numbering 30, planned to grow soon to 100).

The pair did not have the wealth to self-finance, Heafy told me, and so needed to court investors. The new round of capital is more than $5 million, bringing the total to more than $9 million, according to Axios, which picked up on 6AM City’s press release in a story earlier Tuesday.

Leading the expansion investment is Jeff Vinik, well known here in Tampa Bay as the owner of the Tampa Bay Lightning and master developer of a multi-use plan for the area around the Lightning’s arena. (Vinik also was among a group of businessmen who provided a bridge loan to Poynter’s Tampa Bay Times.)

Vinik made his fortune in fund investing, and the two Ryans met him in discussing a sports and entertainment platform of his,

Coming to town with a blank slate and no brand name recognition, Heafy said, 6AM City writers are told to give first priority to getting out into the community. “If we get hated on for something we wrote, we get back to (the person) the same day,” Heafy said.

The pair count Axios Local as their biggest competitor, he said, but they have a different mix of content and Axios has more of an orientation toward big metro markets like Denver and Minneapolis. Among newsletters launched or announced for expansion, Heafy said, the two organizations overlap only in Nashville, Austin and Columbus, Ohio.

Axios Local’s Williams seemed to strike a similar note that the two ventures are sharing an opportunity, not fighting each other head-to-head. “We’re committed to getting professionals smarter, faster with local news and information that matters in their community,” he emailed. “The more investment in local news, the better it is for the community.”

The morning newsletters are small compared to newspapers and their digital sites. Plus many newspapers are now pushing out free morning newsletters of their own, which double as a way to identify potential paid digital subscribers.

But there is clearly a land rush of these mini-chains along with the hundreds of local digital startups, nonprofits and for-profits of recent years.

Heafy said that he and Johnston are well aware of the difference in size and are picking their shots with subject matter and advertising, ceding the most ambitious journalism to legacy outlets.

Nonetheless, he sees the newspaper industry as “ripe for disruption by nimble competition. … They are big ships slow to turn.”

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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