Move fast and break something.
That Silicon Valley mantra works with tech companies, sometimes. But can the same idea be applied to a digital media startup? Kyle Villemain, the 32-year-old founder and editor-in-chief of The Assembly, is giving it a try.
“We’ll know in a few years if we’re someone to emulate or a cautionary tale,” he says.
Launched in 2021 and billed as an all-digital magazine focused on “power and place” in North Carolina, The Assembly is the most aggressive media startup seen in the state in at least a decade. Based in Durham, it has launched news bureaus in Greensboro and Wilmington and partnered with (or invested in) local market publications in the Triangle (Indy Week), Fayetteville (CityView) and four rural southeast N.C. counties (Border Belt Independent). It also publishes four newsletters on law, politics, higher education and statewide issues.
To do this, it employs a team of 43, including 29 editors and reporters supported by about 150 freelance writers.
Initial funding for The Assembly came from some North Carolina-based investors, who put up $200,000 to get things going. It is a for-profit business that has had subscription revenue from its start, though much of its early budget has come from nonprofit groups.
Last year, the publication received a $600,000 two-year grant from the Knight Growth Challenge Fund, created by the Knight Foundation to support news outlets expanding into new markets. It has landed additional money from the nonprofit Journalism Funding Partners, the Greensboro Community Journalism Foundation and others.
The numbers are moving in the right direction, says Villemain, who prior to starting The Assembly was a speechwriter for the UNC System under former President Margaret Spellings. Paying readers stood at about 7,000 in mid-March, versus a little more than 5,000 last summer, he says. Another 110,000 or so subscribe to the various newsletters, most at no cost. A premium subscription level offers additional content and other benefits for $150 a year, versus the base rate of $70.
It adds up, but doesn’t yet add up to profitability, as the publication noted in a recent email pitch to readers.
Penny Muse Abernathy has held senior positions at The New York Times and The Wall Street Journal and had an endowed professorship at UNC Chapel Hill’s Hussman School of Journalism & Media from 2008 to 2020, focused on helping develop digital media companies. She suggests three elements need to be in place to successfully launch a new publication. First, demographics matter. “[You need] a community with average to above-average population and economic growth.” Second, “can you respond to local needs and expectations?” Finally, “do you know your area and do you have access to capital?”
Abernathy’s research shows that roughly 60% of general interest, digital-only state and local news sites fail in the first five years; just 20% make it to year 10. “One of the problems with digital-only is that they have to look at other things in addition to subscriptions and philanthropy,” she says. “That means marketing (advertising) dollars.”
“Nonprofit [support] is not necessarily the answer,” she adds. “At some point, the money runs out.”
Villemain is well aware of all this as he celebrates the outlet’s fourth anniversary. Certainly the demographics are favorable. North Carolina’s urban, educated, professional class is growing, providing readers who are likely drawn to the publication’s coverage of local issues. As for capital, Villemain thinks the business can be “self-sufficient by 2027” without having to raise more money or rely on outside philanthropy.
Having a “pathway to success” was a key consideration in the Knight Challenge’s decision to back The Assembly, says Duc Luu, the fund’s director of sustainability initiatives. “The best way to de-risk is to have multiple revenue lines.”
But Knight’s future contributions are likely to be more in the nature of advice than of money. “We are under no pretense that philanthropy will be around forever,” says Villemain.
“Philanthropy is a catalyst to get us to a larger impact quicker.” The plan is to generate revenues through a mix of subscriptions, advertising, and, increasingly, statewide sponsors and events. About two-thirds of the advertising is expected to come from local markets.
The Assembly’s calling card has been long-form journalism, stories on everything from Lake Mattamuskeet and UNC’s push into online education to the impact of Hurricane Helene on western North Carolina and Mark Robinson’s reading habits. Its team of seasoned journalists include Senior Editor John Drescher, a former executive editor of The News & Observer of Raleigh. It has won recognition for its reporting on state government and higher education, among other things.
“We need long-form journalism,” Abernathy says. “We need investigative reporting. We need contextual and analytical reporting. As the major metros have slimmed down their staffs, those are the kinds of things that have been lost.”
Who pays now
About 10% of American adults pay for two or more sources of news, according to Villemain. In North Carolina, the adult population numbers nearly 9 million, suggesting that there are more than 850,000 residents paying for more than one news source. But competition for those subscriber dollars is stiff and there’s no guarantee that local news will be one of the winners.
A 2024 Pew survey showed nearly 85% of Americans view local news as somewhat, very, or extremely important, but just 15% had paid for local news in the last year. This suggests there is an opportunity, but it also highlights how difficult that opportunity has been to monetize.
The Assembly’s answer has been to ”bring together a lot of things under one umbrella to make it easier for our readers,” says Villemain. “I’m confident there’s a paying audience for good news.”
Another reason for ramping up quickly, he says, is that society is approaching the “post-search” era of the Internet, in which context-based answers driven by artificial intelligence will replace traditional search engine links. This will make it harder for potential readers to discover new sources of news like The Assembly. “Ten years ago you could get a lot of traffic from Facebook,” says Villemain. “Now you can’t. We need some level of scale to survive in a post-search world.”
Traditional newspapers that once dominated the local news business have been in a secular decline for decades now. A Pew study in 2021 found that newsroom employment nationally had dropped by 26% over the previous 13 years. That same Pew survey found that 48% of readers now prefer news websites or social media as information sources, up from 37% in 2018.
Still, at some point, readers have to be willing to pay something for the news. It’s a challenge. “One of the problems with being a startup is you have to bet each day on what’s going to be important to people,” says Abernathy. Or as Villemain puts it, “What stories do we focus on? We’re not going to outcompete Bloomberg on Bank of America. But we could outcompete on an Atrium (Health) story because that’s rooted here.”
“There is a deep human demand for information at the local level,” says the Knight Fund’s Luu. “What will make them (The Assembly) great is when they figure out the relationship between the statewide (publication) and these local entities,” leveraging content and resources across the organization to expand readership.
As to moving fast, Villemain says, “We’re taking a riskier approach for years zero to 5, so we’ll be stronger from years 5 to 10. We could have grown more slowly and probably had an easier path to year 5. But I think we will be in a stronger position for those next five years if we can achieve the kind of scale that we’re looking for.” ■
