Village Media’s Local News Bet Pays Off; Now It’s Building Social

By Christiana Sciaudone November 21, 2024
Toronto skyline – Adobe Stock

If you think local news is in crisis, think again. Canada’s Village Media is tripling in revenue and staff size every five years. It’s consistently expanding into new communities, including Toronto a few weeks ago. That doesn’t mean audience is easy to come by.

In fact, growth in readership has stagnated in part due to Meta’s ban of news from Facebook, and in part because of news fatigue. That led Village Media, which depends on ads for the majority of its revenue and therefore scale in readership, to essentially reinvent social media—a politer Canadian and highly localized version of it.

Spaces, in the works for the past two years, launched on November 13 in Sault Ste Marie, a town of about 75,000 in Ontario. Within two days, the new network, which includes conversation rooms on gardening and things to do in the area, had already garnered more page views and three times as much engagement compared to its younger news sites in a day. Village Media is already planning and hiring for the next wave of Spaces in Northern and Southern Ontario.

“We’ve done this because of the relationship we have with the communities as a trusted local news publisher,” Jeff Elgie, chief executive officer at Village Media, told AMO. “Success is that this is a place where people come and feel it’s different and it’s positive, and it’s going to make us a stronger community.”

While most media companies have spent the past decade and a half thirsting after traffic and growing scale, Village Media has been plowing ahead by getting hyperlocal and providing what daily newspapers used to provide: original news, ads, classifieds, obituaries, weddings, resident spotlights and more—the things that comprise a living, thriving community.

“A healthy newspaper in its time wasn’t just original reporting with an ad beside it. There was a whole bunch of other types of content and types of products,” Elgie said. “This is what seems to get lost with the industry, is that some of the legacy publishers are just trying to make ads beside original news content work in small communities, and it doesn’t.”

Elgie expects revenue growth of 20% in 2025 from this year, which could accelerate if Spaces works out. He expects a profit margin of 15% on “well over ten million [USD] of revenue,” even after the big new launches of Toronto and Spaces (they grow by reinvesting profits and have no debt or outside investors).

At 11 years old, Village Media has expanded from its origins in Sault Ste. Marie to 26 communities in Ontario and runs five other sites like The Trillium, which focuses on politics. It also developed the technology that runs its platforms and licenses that tech to more than 120 sites in Canada and the U.S.

In 2025, it is taking a bit of a detour from ramping up in new communities. Instead, Village Media is focused on making a mark in Toronto with its newest venture, and spreading Spaces to new places.

Spaces: A Kinder Social Network

Spaces is an amalgamation of Facebook groups, Reddit and Nextdoor, a social network for neighborhoods, Elgie said. It’s not about following people, but about following topics based on geographies and topics like gardening or cycling. Anonymity is prohibited and comments are moderated as part of an effort to avoid an evolution into toxic cesspools of (dis)information as well as irrelevant information.

“We have no illusion that it’s going to be like a home run day one. We’re super committed to making it work over the next few months as we tweak and tune it,” he said.

It’s also expected to be an easy sell for ads.

“I can go to a national agency and say, look, without invading people’s privacy and trying to sell you a bunch of personal information, I can give you avid cyclists or gardeners across the country, located to the area that you want in a way that you can’t get otherwise,” Elgie said. “Or I can go to the local cycling shop and say, hey, we’ve got this cycling space where all these cyclists are coming to you to talk about what’s going on. What better place to advertise your cycling shop to them. So we actually think that sales is the easiest part of this.”

As long as they can attract the audience, they expect revenue to follow. After all, Elgie said, it’s easier to sell ads next to a post about a free night of ice skating than a story about human trafficking.

On day six in one community, Spaces did over 10,000 pageviews (not including people that scroll the feed, which only counts as one). Many new communities launched within the last year or two will do less than that, Elgie said.

Staffed Up

Village Media has 172 people on staff, of which 103 are journalists. That’s up from total employees of 17 in 2014 and 63 in 2019. That should place the company at about 500 people in five years, he said. The number of journalists per site varies, with usually at least two and in bigger markets, like Toronto, nine.

Those reporters and editors are servicing a population of about 250,000 within the downtown core of the city and they are hyper-focused on just the area and nothing beyond it. The fact that it’s a highly competitive market is not a negative to Elgie.

“Competition is good for us because it creates a news habit. And so, for example, entering a market that’s truly a news desert that doesn’t have any competition is sometimes actually a lot more difficult because people just don’t care anymore,” Elgie said. Luckily, and as opposed to the reality in the U.S., Village Media faces competition in the shape of daily and/or weekly papers, radio stations and local broadcasters.

Village Media has no problem continuing to grow on its own, not that it hasn’t attracted potential investors.

“I’ve always held the line that if someone gave us a whole bunch of money tomorrow, I’ve always been worried that we would just burn it, like we would not operate like an entrepreneurial organization anymore, and we would not have to fight for the business,” Elgie said. Being forced to survive on profit alone, without a massive cash infusion, has led to creative thinking and problem solving, like the advent of Spaces.

“Spaces to us is this other tier of audience and revenue potential in the local market that could massively tip the business model,” Elgie said. “This sounds really bold, but when we think about it, we talk about it like this could actually solve the local news problem worldwide…Village, to some extent, is showing a lot of people the way.”