Patch.com launched in February 2009 as a new way to deliver local and regional news from around the United States.  The AOL initiative is really starting to pick up steam with writers, reporters, and editors from around the country being recruited to manage all aspects of each local Patch site.  Currently, Patch has approximately 50 local sites up and running, which are targeted to cities and towns with fewer than 70,000 residents.  A separate initiative allows towns with smaller populations to participate through Patch.org.  AOL has invested $50 million on Patch and expects to fund the site and drive revenues through ad sales.

Newstex Authoritative Content publisher, Ken Doctor of Newsonomics, wrote a comprehensive overview of the Patch business model for Outsell, Inc., in which he explains:

The news model is simple: hire a single, full-time journalist, who becomes the local “editor” of a Patch site. That journalist provides the main coverage, working long hours and posting frequently. Editors, who are paid about $35-40,000 a year, also can spend about the same amount of money on local freelancers or stringers; each site commonly would pay six to 10 such contributors.

Each site covers a community, which can range in population from 10,000 to 80,000, though Patch President Warren Webster tells Outsell that 20,000 is a common size. Organizationally, each set of 12 sites make up a “cluster,” headed by a regional editor and regional ad/marketing manager. Expect between a dozen and two dozen ad sellers per cluster, as they try to divvy up territories to take advantage of their overlap in communities.

A “block” then covers two clusters. Those blocks then roll up to four editorial directors and four sales directors, who divide the country into sections, reporting back up to Patch HQ.

All technology is handled commonly and nationally, so all the sites use one content system and platform. National sales completes the operation and forms a key part of the business model, which is traditional: advertising sales.

Patch writers and editors will undoubtedly have to work long hours for an anticipated annual earnings of $35,000-$40,000.  That’s not much, but AOL is already proving that those employees are out there and willing to do the work.  Since localization is so hot these days, the AOL effort with Patch is likely to do quite well.  However, the traditional news industry will feel the pinch as traffic shifts from their sites to well-SEO’d, localized content that might not have the same level of professionalism but gets the job done.

What do you think of Patch.com and its affect on traditional news sources?