AJR  Drop Cap
From AJR,   December/January 2011

Dispatches from the Last Frontier   

An aggressive Web site covers Alaska and searches for profitability. Posted: Thu, Dec. 2 2010

By David Saleh Rauf
David Saleh Rauf (drauf@ajr.umd.edu) is an AJR editorial assistant     

As the Deepwater Horizon rig began gushing oil into the Gulf of Mexico in late April, an online reporting outfit in Anchorage started pumping out stories.

The Alaska Dispatch initially published a three-part series that explored what the spill could mean for future offshore drilling in Alaska. But the Web site's next set of stories was a testament to its dedication to chasing down major news affecting the Last Frontier.

Intent on continuing to localize the disaster in the gulf, the Dispatch did what none of Alaska's newspapers had the will to do: It put boots on the ground, sending a reporter about 3,400 miles to cover the story firsthand.

No corporate OK needed. No layers of bosses and bureaucracy to slice through. The final decision was made over beer and wine at the editor's house. Call it the elegance of a small news startup.

"We were like, 'Screw it, let's whip out the credit card and send someone,' " says Tony Hopfinger, the Dispatch's 36-year-old cofounder and editor.

Alaskadispatch.com's coverage of the gulf oil spill is one of several defining episodes for the roughly 2-year-old online news operation that is steadily developing a reputation for its gritty coverage. Staffed with a small crew of veteran reporters, the Dispatch, which burst briefly into the national spotlight in October when Hopfinger was handcuffed by security guards at a campaign event, is part of the growing array of online ventures attempting to shape the future of journalism as legacy media outlets shrink. But unlike most of its counterparts, nonprofits that rely on foundation support, the Dispatch is attempting to become a self-sustaining, moneymaking enterprise through revenue generated from online advertising.

It's a business model that has yet to prove successful in today's ever-evolving journalism landscape. And the people at the Dispatch are aware of the risk involved.

"It's an unavoidable fact that the whole thing could blow tomorrow and go under," says Dispatch staff writer Craig Medred, who had been an outdoors reporter and editor at the Anchorage Daily News for more than 20 years. "There seems to be a consensus that if we go out and find good stories and tell them well, that this is going to work. There's more thought about that than about failing."

The Dispatch is bankrolled primarily by Publisher Alice Rogoff, a former CFO of U.S. News & World Report and the wife of billionaire David Rubenstein, founder of the Carlyle Group. Rogoff bought 90 percent of the company in July 2009, roughly one year after the Dispatch launched with the look and feel of a blog. Hopfinger and his wife, Amanda Coyne, own the remaining share.

Rogoff's infusion lifted the Dispatch to the ranks of a legitimate news operation with a paid staff and an office. Her money continues to subsidize the site, which has a staff of about 15. Its target for becoming profitable is 2011. "We're right on our projected path," says Rogoff, a former assistant to Donald Graham when he was publisher of the Washington Post.

Rogoff says she's committed to bankrolling the Dispatch, but her goal is clear. "I don't enjoy subsidizing something that doesn't need a subsidy in a perfect world," she says. "Our target is profitability."

The Dispatch, which debuted in August 2008, has humble roots. Before Rogoff came on the scene, Hopfinger and Coyne, a husband-wife freelance duo, used the site to "dump" local stories they couldn't sell. After almost a year of running the Dispatch out of their house, they looked for investors and found Rogoff, who was trying to set up her own news site focused on rural Alaska. She's an admitted "news junkie" and an East Coast native who became enthralled with Alaska when she started visiting some 10 years ago and now lives there. The deal to fund the Dispatch was cemented over a dinner of buffalo burgers in a move that Hopfinger says provided the capital needed to take the site to the next level while giving him complete editorial control.

Like most of its predecessors, the Dispatch's genesis stems from the decline of the traditional media. Big stories across the state were going uncovered, Hopfinger says. The Dispatch exists to fill that void.

Hopfinger's staff is small: 10 in the newsroom. More than a dozen paid and unpaid contributors also provide content, but most of the editorial heavy lifting is left up to the Dispatch's four reporters, all seasoned journalists. Hopfinger describes the site's focus as a mix of daily journalism and deep-dive projects that other media outlets lack the money or manpower to pull off.

Aside from the gulf oil spill, the Dispatch won kudos for its coverage of Sen. Ted Stevens' fatal plane crash in August and a series about an alleged caribou massacre in the remote village of Point Hope. Most recently, the Dispatch helped drive the discussion around Alaska's heated Senate race with its tenacious reporting on Republican candidate and tea party favorite Joe Miller. The fervor the Dispatch displayed in its reportage on Miller drew heavy criticism from conservatives, who charged that it is left-leaning, a label the site is trying to shake.

That same election coverage also brought attention to the Dispatch in October, when Hopfinger was handcuffed by Miller's security guards during a town hall-style meeting at a school. A video of the incident quickly went viral, raising the site's profile and pageviews for a short period.

The Dispatch's reporting chops have drawn praise around the state. "It's kind of like old-fashioned journalism with these guys," says Paul Jenkins, editor of AnchorageDailyPlanet.com, another for-profit online venture. "Generally, when they start doing coverage, it gets long and in-depth. They're really doing things other newspapers in the state have not been doing."

The Dispatch is "certainly filling a hole" created by the diminished strength of Alaska's dominant media outlets, says Lynne Snifka, an assistant professor of journalism at the University of Alaska Fairbanks. "They are dogged in their pursuit of things, and they have some very passionate people working there."

Pat Dougherty, the Anchorage Daily News' executive editor, describes the Dispatch as an online version of an alternative paper. While the site does some "good stories," its content doesn't have a "consistent pattern," Dougherty says. And he is quick to point out that the Dispatch's fate is entirely dependent on the whims of a single investor. "I don't think it has much of an audience or a sustainable business model," he says. "But as long as the owner is willing to pay the cost of putting journalism online, they'll be doing journalism."

When it comes to the state's bloggers, "on any given day they'll rake us through the coals," Hopfinger says. For example: Conservative radio show host Dan Fagan recently blasted the Dispatch on his blog, TheAlaskaStandard.com, calling its staff a group of "well-funded left wing activists." And it's not just those on the right taking shots at the Dispatch.

"They're getting kudos from the left and the right, and they're getting damned from the left and the right," says Philip Munger, a composer and editor of the Progressive Alaska blog.

The Dispatch, Hopfinger says, is still a work in progress, constantly evolving and trying to find the right blend of content to attract readers. A quick scan of some of the site's top stories during the first two weeks of November shows how it's experimenting: There were a number of solid pieces on the Alaska Senate race and its aftermath, a steady stream of Sarah Palin-focused content and a story about bear attacks in the Alaska wild. Then there was a blog-style recap of ABC's prime-time hit "Dancing With the Stars," where the site has followed Bristol Palin's progress.

"We throw a lot of things at the wall to see what sticks," Hopfinger says.

The Dispatch's long-term success will be measured in tangibles like readership and revenue. Significant strides in both are being made every day, Hopfinger says. For example: The number of daily visitors to the site averages about 22,000, up from 10,000 just months ago. Pageviews have also doubled several times in 2010, he says. In October, at the height of the high-profile Senate race, the Dispatch recorded 1.5 million pageviews, Hopfinger says.

Not bad, but that's nothing compared to the traffic being generated by the state's major media outlets. The Anchorage Daily News, for example, has averaged about 14.7 million pageviews a month in 2010.

It's over the question of revenue, however, that the Dispatch encounters its greatest skepticism. It is currently banking on becoming profitable exclusively via online advertising. That formula won't work in the current environment, says Ken Doctor, the author of "Newsonomics" and an expert in emerging digital business models. "I don't know anybody who has come close to supporting a staff of 10 on advertising alone."

Online news sites that focus on regional coverage are still in their infancy, Doctor says. The first ones were launched about five years ago (see "Nonprofit News," February/March 2008) and were underwritten by foundation and member support. But a second generation of for-profit online news sites, like TBD.com in the Washington, D.C., area (see Drop Cap, Summer), is starting to emerge. "By 2012," Doctor says, "I would hope to see more sustainability."

To make money, Doctor says, sites will need a mix of revenue generated from ads and alternative streams, which could include subscription fees for premium content, syndication partnerships, hosting events and leveraging mobile apps.

Adopting new ways to make money alongside ads could be a big part of the Dispatch's future, Hopfinger agrees. "Cracking the nut of this for-profit journalism online is probably the most fun thing for me," Hopfinger says. "We can't just rely on Knight [Foundation] grants and things like that. I believe journalism has to find a way to be profitable online."