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Patch is one of AOL CEO Tim Armstrong’s biggest bets in his bid to save the company.So far, it has been a big waste of money.
Patch employs about a 1,000 journalists and a couple hundred sales people.
Meanwhile, Patch’s 900 or so sites don’t get enough traffic – about 10 million people visit the site each month – to bring in much advertising money.
According to documents we’ve obtained from a source, Patch lost at least $100 million last year and generated paltry revenues.
But as bad as Patch’s cost structure is, it turns out Armstrong’s big investment does, at least, have one very important thing going for it.
The product is pretty good.
I’ve learned this from a trusted though admittedly anecdotal source: my dad.
Back in November, I was down in Florida visiting my family for Thanksgiving. We got to talking about how the local paper, The St. Petersburg Times, was changing its name to The Tampa Bay Times. We talked about new media startups like Business Insider are disrupting old media companies. The conversation changed to Patch somehow, and I had the idea to sign my Dad up for a daily email from a local Patch site.
(I signed him up for the email because I knew he’d never actually remember to go to the site on his own. Patch had to come to him.)
My dad does most of his business in downtown St. Petersburg, so I signed him up for the Patch about that area’s closest neighbourhood – call Old Northeast.
I forgot all about the experiment until last weekend, when during a family get together, my dad spontaneously brought it up, saying: “I love that Patch thing you subscribed me to!”
He told me that the emails have him considering cancelling his subscription to The Tampa Bay Times. He’s “almost” there.
That’s pretty remarkable, considering The Tampa Bay Times is, in media circles, considered one of the country’s best regional papers.
My dad says he only actually opens the Patch emails about three times a week (they come every day). He says he only actually clicks on stories in those emails maybe twice a week. What he likes about Patch’s stories are that they are “timely” and “really local.”
The only thing that’s really keeping him from pulling the trigger?
“Significantly better sports coverage.That would kill the paper!”
Not everyone is so bullish on Patch:
- Confessions Of Patch Salesperson: “It’s Been A Disaster”
- Confessions Of A Patch Editor: “The Model Isn’t Sustainable”
- Confessions Of A Patch Advertiser: It Hasn’t Helped Business Yet, But I’m Hopeful