In the world of hyperlocal news, what a hyperlocal venture looks like is as undefined as the formula for achieving success (translation: profit). Those were twin takeaways at this week’s Street Fight Summit 2011 in New York.
Representatives from four large media companies occupying the hyperlocal space –Warren Webster, president of Patch; Carll Tucker, CEO of Main Street Connect; Rick Blair, former CEO of the Examiner; and Gary Cowan of Datasphere – were asked whether the size of a local news site matters in terms of geographic area covered and number of unique visitors to the site.
For Patch, Webster said, scaling up was important. The others didn’t answer the question directly.
“It’s not right to think about hyperlocal as homogeneous,” said Cowan, whose Datasphere owns some 1,300 sites. “The local blogger has a different focus than a company trying to create a media brand from the ground up.” Patch, with 870 sites across 24 states, was an example of the latter, he said.
When Main Street Connect started, Tucker said he believed size mattered. He thought that having a certain level of coverage would attract advertisers. Now, he maintains 52 hyperlocal websites in three areas, Fairfield, Conn., Westchester, N.Y., and central Massachusetts. To generate revenue, large regional accounts such as hospitals, Realtors, and car dealerships are his best bets, he says. One of his three areas or “pods” is making a profit, but he didn’t elaborate.
The key to sustainability is not so much size as it is bringing in revenue and eventually turning a profit, many speakers at the summit said.
Making that clear were those who spoke about their failed ventures. A major mistake was trying to scale up too fast. “It just showed we could lose money in more places,” says Mark Potts, founder of Backfence, which folded in 2007.
Several summit speakers suggested that revenue and profit are likely to come through providing a mix of content, daily deals and location-based services. They referred to this as the “coming convergence of hyperlocal.”
The role that journalists should play was up for debate. Would it help if journalists solicited daily deals? Should they sell ads?
Michael Shapiro of The Alternative Press in New Jersey, which has been accepted for membership by the New Jersey Press Association, says some journalists on his staff want to sell ads, and he’s considering allowing them to do that in communities that they don’t cover. He currently has an ad sales staff. Leela de Kretser of DNAInfo in Manhattan says in her community, it could be difficult to recruit journalists to work for the site if they are too closely linked to advertising.
Where the market has gotten crowded with local news sites, competition has followed. Debbie Galant, who launched BaristaNet in 2004, has recently felt competition for advertising from Patch. BaristaNet lost a regional car dealership account to the big corporate player because the dealership was lured by increased exposure on more sites.
However, competition can force sites to work harder and the reader benefits, says Shapiro of The Alternative Press. He points out that independent sites have an advantage because site operators live in the community and sit on crucial boards. “We’re not going anywhere.”
Working with other media outlets is important, too. Ted Mann, CEO of SnipSnap and formerly of Gannett’s InJersey, encourages a site to pursue as many partnerships as possible as a way to grow an audience, not necessarily bring in money.
For instance, the Journal Register Co. is seeking to partner with local blogs, says Steve Buttry, Director of Community Engagement and Social Media.
GoLocal, which started with a site in Providence, R.I., has a great partnership with ClearChannel radio, says CEO Josh Fenton. One of its reporters is on the air every morning. It’s a win-win, as the station benefits from the reporter’s expertise and the site gains exposure.
The ability for sites to break news also helps them stay in the forefront. “When the mayor of Providence fired all the teachers, Fox and Friends wanted our reporter on air because we broke the story,” says Fenton.
ARLnow in Arlington, Va., a locale known for childless, transient young professionals, has been able to counter the conventional wisdom that hyperlocal sites typically flourish where people own homes and raise children. Editor Scott Brodbeck credits the site’s breaking news coverage.
“We cover every breaking story that we’re awake to cover. It’s what people like about us. And we’re cited by every media outlet,” says Brodbeck.
The Alternative Press is so sure of the value of covering breaking news that it is putting together a breaking news team to cover 14 towns, Shapiro says.
While news sites focus on content, bringing in revenue could come by helping small businesses navigate the Web and social media channels. Some have already been working closely with local merchants. De Kretser said DNAInfo’s sales team meets with local businesses and walks them through packages they offer. The site is working to put out a guide to every single business in New York City.
There was general agreement that forums, whether online or offline such as Street Fight’s summit or J-Lab’s News Entrepreneuring 3.0 workshop are crucial to finding ways to survive in the hyperlocal space.
“Media entrepreneurs need to be an open-source community and share the lessons they’ve learned in blogs and conferences,” Buttry says.
Ari Pinkus is J-Lab’s Project Manager