As Americans turn more to online news sources, a panel at this week’s SXSW Interactive conference will look at the Americans who aren’t going online for news. They are, among other things, often rural and poor. And that’s exactly the audience at which the OpenRural project is aiming.

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The panel was organized by Fiona Morgan, a researcher at the DeWitt Wallace Center for Media and Democracy at Duke University, who worries that as newspaper companies try to harvest more revenue from a shrinking audience, they are catering both content and delivery to a wealthy, educated, white audience. She asked me to join the panel to discuss how the old idea of the “penny press,” which revolutionized journalism by covering news that appealed to a broader audience, might be updated from the digital age.

In rural communities, newspapers actually don’t have much choice but to serve an audience that has less money and education on average than a typical newspaper reader. For example, in Columbus County, N.C., The News Reporter can’t ignore people who have little “spending power” because there are simply too many of them. Of about 22,000 households in the county, 38 percent have incomes of less than $25,000 a year, according to the Census Bureau’ s American Community Survey. Only 19 percent have incomes above $75,000. Compare that to Wake County, where the numbers are reversed — only 18 percent of households live on less than $25,000 a year and 45 percent make more than $75,000.

But poverty in Columbus County doesn’t translate into a lack of interest in the news (although it does translate into lower voter turnout). The twice-weekly, family owned News Reporter in Whiteville reaches just more than half the households in the county. The News & Observer, the biggest paper in Wake County, reaches only about 20 percent of its home-county households.

the threat of shifting revenues

With market strength like that, it looks at first blush like the best way to recreate the penny press for the digital age is to print on dead trees. But that ignores threats just over the horizon. Right now, the average visitor to whiteville.com spends just over four minutes per visit, compared with the 20 minutes that the average visitor spends on each trip to Facebook. Based on Census data and survey research done by the Pew Research Center, there’s a good bet that there are just as many people in Columbus County on Facebook as there are readers of the print newspaper.

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Poor or not, the people of Columbus County use the Internet. Even though we know that income has a positive correlation with newspaper and online news consumption, there are just so many poor people in Columbus County that they dominate every media measurement. When looking at raw numbers, there’s probably about 25 percent more very poor people on Facebook in Columbus County than very rich. And on Twitter, the raw numbers of very poor and very rich are likely about even in Columbus County.

That’s important because the business staff at The News Reporter has just within the last few months begun to see signs that people are not putting their classified ads in the newspaper because they are posting items for sale on Facebook — a company whose mission isn’t to support accountability journalism.

As big city newspaper companies can tell you, a future of shifting revenues means a future in which you have to either live with smaller margins or spend less on reporting and other expenses.

The News Reporter is a family owned company with a Pulitzer Prize in its history. I’d bet it spends a higher percentage of its revenue on reporting and editing than most newspapers. The challenge for rural newspapers, though, is the economy of scale. They simply can’t divide the cost of covering local government among as many readers. If The News & Observer sends someone to the Wake County courthouse, the cost of that reporting is shared among 70,000 readers.

But if The News Reporter sends someone to the Columbus County courthouse, it can only split the bill about 11,000 ways. So, per capita, it’s nearly seven times as expensive for Columbus County readers to get local news coverage as it is for Wake County residents.

where openrural comes in

OpenRural aims to lower the cost of gathering and publishing basic data about government and public life. Property sales, arrest reports, new business openings and restaurant inspections have long been a staple of community newspapers. But until now, publishing them has required a reporter to go down to a county office, pick up a piece of paper, and re-type the information into her newspaper’s publishing system. We aim to automate as much of that as possible.

Lowering costs and serving an audience across all demographics, OpenBlock appears to meet all the requirements for itself being a penny press for the digital age. But generating cheap content doesn’t solve the revenue problem in a world of abundance and bad competitors who are willing to provide a similar or better service for even lower margins.

The only way that OpenBlock — or any penny press in the digital age — is going to solve revenue woes is by increasing audience loyalty in both print and online.

If OpenBlock lowers the cost of collecting and publishing commodity news in rural markets and staves off some bad competitors, then the next step will be for publishers to reinvest the savings into high-quality, high-impact public affairs reporting. Reporters who once gathered paper and went to meetings will need to do more stories about the “how” and the “why” rather than simply the who, what, when and where. For these rural communities to lift themselves out of poverty, they need to be able to look at trends in the data.

In his book “The Vanishing Newspaper,” Philip Meyer looks at how newspapers use reporting to create trust and influence in their communities and how they then sell that influence to advertisers. So the secret to building a penny press for the digital age isn’t just about generating abundance of content any more than it’s about catering to an elite audience. Page views without impact have no value.

And that’s why Meyer also said in another book, “Precision Journalism,” that the ante is being raised on what it takes to be a journalist. Data can’t just be an input in a low-cost publishing process. It must also be the raw material that reporters are able to use for analytical and accountability journalism.

Newspaper image courtesy of Flickr user Binuri Ranasinghe.

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