Michael Shapiro is the founder and CEO of TapInto, a local news website franchise with almost 100 territories.
Getting credible news at the local level is getting harder, as corporations buy up small newspapers (often to later gut them or shut them down). Newspapers were once highly read and profitable, but that’s no longer the case—unless you turn to TapInto’s network of news websites.
Michael Shapiro founded local news website TapInto 16 years ago in New Providence, New Jersey, because he wanted a community-oriented job where he could be with his family.
“Within two weeks of me starting it, people in our two neighboring towns reached out to me” about doing something similar in those communities, he said. “So I found myself running three local news sites myself.” He quit his job as a lawyer in New York so he could pursue TapInto full time.
“My original idea was just to grow those three sites, their traffic, their revenue, their content,” Shapiro said. Within three years, he built three profitable news websites and hired a full-time editor and reporter to help him run the sites.
Reporters are required to publish one story a day, while being objective and following the ethics code from the Society of Professional Journalists.
TapInto started franchising in 2013. “I kept getting more and more requests from people to expand to their town,” he said. “But I couldn’t do more local news sites myself, so I started thinking: How could we expand, yet keep it really local?”
Now the news franchise has nearly 100 territories covering more than 135 municipalities, Shapiro said. Almost all of them are in New Jersey. Through TapInto’s network of advertisers and the ability to share stories across multiple websites when relevant, the sites are profitable.
According to TapInto, more than 80 percent of advertisers expand or renew their marketing packages. The franchisor handles company infrastructure, like billing, tech support, training and customer service.
“We do basically everything other than their original local news reporting and their local sales,” Shapiro said. “How I developed that model was I was spending like 60 percent of my time doing all that stuff. So we did that for them. We could, one, improve their quality of life. Two, enable people who wanted to do this even part time to be able to do it.”
The franchise fee is $5,000 initially and then $600 to $700 each month, depending on the size of a territory.
Franchisees need to be local to their territories. The bottom-up business model allows franchisees to be independent publishers who cover “the new the way that their towns should be covered, because they live there,” Shapiro said. “At the same time, there are the benefits of a network, both in terms of the services, but also the ability to share content, the ability to sell advertising back and forth.”
Each site makes about half its revenue from other TapInto websites selling advertising to businesses in multiple towns. Prospective franchisees in other states have inquired about starting their own site. They should, said Shapiro, want to eventually have multiple territories or assist in adding other franchisees to the network to take full advantage of the model.
All of a franchisee’s revenue comes from ad sales, rather than subscriptions. “We believe that people, regardless of their socioeconomic background, should be able to know what’s going on in their town,” Shapiro said. “They shouldn’t have to choose between paying for medicine and paying to know what the town council is doing. That’s an important part of the model.”
TapInto initially sought franchisees with journalism experience, but now it looks for those with business and sales experience. Those without journalism backgrounds can hire a reporter or editor, while the business-focused franchisee handles advertising sales.
“In terms of our most profitable TapInto sites, some are in tiny suburbs. Some are in distressed inner cities. Some are in blue collar towns,” he said. “So it just goes to show that the model can really work anywhere as long as you get the right franchisee for that territory.”
Shapiro never put an editorial page on TapInto’s websites to maintain objectivity. He referenced the situations at The Washington Post, Los Angeles Times and other major newspapers, which faced an uproar last year when their editorial boards didn’t endorse a candidate for president.
“If you give people objective news and information, they can make up their own minds,” Shapiro said. “They don’t need us telling them how to vote or what to think.”