The new news | VillageSoup redefined the local news business. Now, with a fresh acquisition, CEO Richard Anderson has to keep the company moving forward.

To his supporters and many of his employees, Richard Anderson is a visionary.

He started what is Maine’s first community online publication, VillageSoup, which has become a leading local news source in the upper Midcoast. Pursuing the idea of “open source” journalism — in which readers amplify the news, and businesses publish their own press releases — Anderson has premiered an alternative to the traditional Maine newspaper, which in its daily format is suffering a severe contraction of advertising revenues.

The VillageSoup model is characterized by its new general manager, Ron Belyea, as “continuous news coverage, which we print once a week.”

Anderson, VillageSoup’s CEO, says traditional newspaper journalism must change or face extinction. Advertisers want an online presence, but won’t pay the rates traditionally associated with display advertising. Editors are used to controlling the content of their pages, but the Internet changes all that, he says. Online publishers are no longer the gatekeepers, but more like referees — setting the tone of the publication, but allowing its readers to help define it.

With daily newspaper advertising revenue scarce and getting scarcer, anyone with a sound idea to connect electronic and print publishing is likely to attract a lot of attention, and Anderson has. He is now set to assist the launch of VillageSoup-like sites in Alberta, Long Island, N.Y., and Louisiana through the use of proprietary software. And last year VillageSoup won an $800,000 grant from the John S. Knight Foundation to provide free access to what he terms “open source” electronic publishing, with the aim of encouraging a host of VillageSoups around the country.

Yet in June, Anderson took what seemed to some like a U-turn when he bought Courier Publications, the newspaper chain owned by Crescent Publishing Co. of Greenville, S.C., which published one thrice-weekly and five weekly newspapers in Rockland, Belfast, Camden, Bar Harbor and Augusta. The newspapers had been Anderson’s major competitor for the upper Midcoast audience, so buying them made sense in what had become a highly fragmented print media market between Rockland and Bar Harbor. But it also turns VillageSoup into what looks, at least initially, like a much more conventional newspaper company.

Three years ago, VillageSoup had launched three print editions to compete head-to-head with Courier; after the purchase, VillageSoup’s print editions were shelved, along with the Waldo Independent in Belfast, once another locally owned competing paper that Courier had earlier acquired. (For more on the post-aquisition reorganization of VillageSoup’s publications, see sidebar on page 22.)

Anderson said that the merged company, which goes by the name of Village NetMedia, will have revenues more than four times what VillageSoup brought in previously, and that he expects to show a profit — for the first time — after the first year the papers are published jointly. (Anderson declined to give specific revenue figures, or to say how close the company came to profitability in recent years.)

But the deal wasn’t out of place for Anderson. “It made sense to consolidate,” Anderson said. “You had nine newspapers competing in a marketplace for 30,000 readers.”

“It was definitely the goldfish swallowing the whale,” said Ron Belyea, a former general manager for Courier who left in 2005, and then returned at Anderson’s invitation in June to occupy the same position in the now much larger VillageSoup operation.

Along with the financial risk in acquiring a much-larger publishing operation, there is the question of whether VillageSoup can remain true to its original online self.

A growth business?

The purchase of the six Courier newspapers left only one newspaper owner in each town, except in Bar Harbor, where the Mount Desert Islander, a weekly launched four years ago by the Ellsworth American, competes with the Bar Harbor Times. All of VillageSoup’s print editions are weeklies except the Courier Gazette, published three times a week. (For more on this, see “Weekly Wars,” Aug. 21, 2006.)

Ownership of the traditional papers by a group of out-of-state investors from South Carolina was a sore point with many readers, particularly when Courier began making increasingly drastic news staff reductions despite seemingly healthy financial returns.

“They were promised 30%, and when that didn’t happen they began looking to sell,” Anderson said.

He doesn’t see his own consolidation of papers as prompting the same reaction. “The difference is local ownership,” he said. “Readers just want to know that the people who provide the news are part of the community.”

The quest for large profits in not a realistic expectation for a local news franchise, he said. “You’re not going to make a lot of money in community news, but you can make a living,” he said.

In the end, VillageSoup — although it was a much smaller company — was in a better position to sustain operations, said Anderson. “They were trying to make money by cutting costs, which in the end doesn’t work because you’re also cutting service to readers,” he said. “We’re trying to grow revenues to provide better service. And growing revenues is fundamentally a better business model than cutting costs.”

Still, there is some irony in that the business model of an Internet entrepreneur trumped that of print weeklies, whose average age is well over 100 years. And Anderson did make significant staff reductions overall in the Courier staff, retaining 92 positions and cutting 26. Before the purchase, the entire VillageSoup staff, including the three print editions, totaled about 30.

But Belyea is still among those who uses the word “visionary” for Anderson. “He made a believer out of me,” he said.

He came out of his retirement from newspapers after Anderson’s son, Derek, made a pitch outside a Rotary Club meeting when the Courier purchase was pending. “At first I said, ‘No way.’ I didn’t want to go back,” said Belyea.

But Derek Anderson persisted. What convinced him, Belyea said, was the commitment to local ownership.

Belyea recalls a seminar on the region’s news media six years ago in which he presented for print and Anderson spoke for online publishing. “Everything he said about the Internet has come true,” he said. “We have video and radio feeds and other innovations that have expanded the market. At the time, I thought he was crazy, but he knew a lot more than we did.”

Moving online

Jay Davis is a veteran newspaperman who co-founded the Waldo Independent and did two tours of duty as editor of Maine Times, the statewide newsweekly that published from 1968-2002. It was near the end of his second stint at Maine Times that the paper published a cover story on a cluster of student suicides at Camden Hills Regional High School.

He got a request from VillageSoup, then based in Camden, to post the story online, and decided, “Why not?”

The reaction, he said, “was astonishing. There were dozens of responses to the story, including posts from some of the town’s leading citizens.” Davis said he had never seen anything like it in more than three decades in newspapers. “I figured they were onto something,” he said.

When Maine Times closed shortly afterward, Davis went to work in Belfast for VillageSoup, later becoming senior writer. Having started in the typewriter days of newspapering, he knew little about online publishing, but said the VillageSoup model made it easy.

“I still think the package that Richard [Anderson] and his son, Derek, put together is a real advance for community journalism.” (Derek Anderson left VillageSoup in 2007 and currently is a director at Know Technologies in Camden.)

Using the custom VillageSoup software, Davis said a reporter with no Web experience can write a story, shoot photos and post the results online in minutes.

He gave an example of a routine fire story that, of course, in a small town is not all that routine. “I went down to the fire scene, interviewed some of the people displaced by the fire, shot some photos, and had the results online in 40 minutes,” he said. “Some of the weeklies didn’t have any coverage until four days later.”

The idea of covering news as it happens took some time to penetrate traditional newspapers, but many them now follow the same model.

Earl Brechlin once edited the Bar Harbor Times but moved to the startup of the Mount Desert Islander after Courier management made one too many demands for news staff reductions. He pointed to the recent disastrous fire at the Washburn & Doughty boatyard in East Boothbay as an example. A passerby phoned him shortly after the fire started at 5 a.m., and by 6 a.m. Brechlin had a phoned-in bulletin on the Islander website, updating it throughout the day.

So if newsgathering isn’t a unique VillageSoup advantage, what is? Richard Anderson says it’s the ability to gain revenue through the online portal, rather than giving away the product, which is what most newspapers now do.

VillageSoup gains revenue from readers — at least those who want a copy of the weekly print edition, and the ability to post online, a service that costs $39.95 a year. And businesses that want to post advertising and press releases on the VillageSoup site now pay $19.95 a month for the privilege.

“This really goes against the grain for most publishers, who see their role as gatekeepers,” he said. “If the press release is used at all, it’s heavily edited and condensed. But we see it as serving a need, especially for small businesses.”

Survival story

The transition from Web to a full range of print publications has not been without its bumps. Jay Davis says he wonders whether the original vision can weather the change from a small, almost communal group of employees to something much larger.

The VillageSoup print editions used to feature plenty of color photos and a tabloid format, and used the advanced press capabilities of the Sun Journal in Lewiston. Now, with all printing done at the old Courier Gazette plant in Rockland, the papers are grayer and in a standard broadsheet size.

Belyea expects the look of the papers will change over the coming year. “It will be a hybrid,” he said. “We’ll try to incorporate the best of the old and the new.”

Web access is similarly slow in developing. When the sale was completed, the Courier papers’ websites were shut down. Reports from the Camden Herald and Courier Gazette are now on VillageSoup’s Knox County online edition, while the Republican Journal staff writes the Waldo County edition.

Belyea said that the Bar Harbor Times content should be up and running by mid-September while the Capital Weekly of Augusta will be back online by the end of September. And, putting first things first, he provides a reminder: “We print at the end of the week what we published online every day.”

He admits that routing readers used to other website addresses will probably take even more time. “With all the broken links around, it will be awhile before we catch them all.”

Anderson concedes there will be some growing pains, but insists that his original model is sound. It’s based on the idea that, throughout the nation, Internet users group themselves by a variety of categories, from the familiar marketing identifiers to, in the case of VillageSoup, geography.

There is a distinct affinity for people who live in the same region, and he says the critical number of readers is about 30,000 — which is what his publishing company now serves. That’s too small to support many daily newspaper operations, but just right for the traditional weekly format which, he points out, is more like continuous electronic publication.

He also says that, in addition to breaking news on-demand, publications like VillageSoup must provide longer, more in-depth stories than those traditionally filed by weekly papers. In that sense, they must become more like the larger dailies, filling part of the niche created by shrinking news staffs at established papers.

“Print has a place. We like print,” Anderson said. “Some businesses still want display ads. We’ll run them. But the platform we use is different, and we have to respond to very different needs our customers have. What we’re saying is that you have to change your ideas about how news is provided, and how the community interacts.”

The far-flung VillageSoups, for instance, are about to be launched in two other states and one Canadian province — all probably in September — by traditional, locally owned print operations. “They believe in this model, and they also want a future for their publications,” Anderson said about what prompted the original inquiries.

Reporters, he said, will have to give up the idea of a scoop. “Some papers didn’t want to publish a story quickly because their competitors would pick it up,” he said. “That doesn’t matter anymore. If you provide what readers and advertisers want, they’ll come to you.”

Belyea said that the initial circulation numbers show that readers of the former publications are buying the editions of what used to be competitors. “Our newsstands sales are up in Camden and in Belfast,” he said. “People don’t seem to be having trouble finding the news.” Newsstand sales of the Camden Herald have gone from 1,500 to 2,100, while the Republican Journal’s jumped from 2,300 to 3,800 after the shutdown of the Waldo Independent.

Anderson acknowledged that his mission to create Web-based revenues to complement traditional news gathering still has a ways to go. Yet he ventured this bold prediction: “Newspapers will survive, but the newspaper business as we’ve known it will become extinct.”

A lot of readers, and more than a few publishers, will be waiting to see if that comes true.

Douglas Rooks, a writer in West Gardiner, can be reached at editorial@mainebiz.biz.