Independent New Sites: The Pendulum is Swinging Both Ways

Posted on February 15, 2012  |  Blogically Thinking

The appetite for starting up independent news and information websites seems to be as keen as ever and the ideas for new projects are quite creative.

J-lab just finished vetting some 227 proposals to fund women-led startups. There were a ton of sharp ideas. And I recently vetted hundreds more clever news-technologies and social-media ideas for this year's SXSW Accelerator.

That said, we're entering a period where the pendulum is swinging sharply both ways ­– delivering shakeouts as some sites go belly up and expansion as other sites open satellite operations in the indy news space.

Over a week ago the Chicago News Cooperative announced it was shutting down. And in recent months: BayCitizen, having lost its major funder, is looking to merge with the Center for Investigative ReportingRockville Central, after starting as a website then moving to Facebook, went dark. The citizen journalism site, MyMissourian.com, shut down. The once-robust NewWest.net went silent for some months and has returned with no fresh content.

Several of the hyperlocal partners in J-Lab's Networked Journalism project have flagged in the frequency of their content but, at the same time, new sites have launched in those communities. (Stay tuned; a final report is coming soon.)  

Of some 1,200 sites in J-Lab's database of community news sites, about half are now inactive. Most often, sites fold as a result of their founders' life circumstances ­– new jobs, new responsibilities – rather than failed business plans.

Still, there is growth:  Steady producers like West Seattle Blog and Davidson News have launched affiliated sites. Small networks like Main Street Connect and Hamlet Hub have added sites. And, of course, Patch, for now, is still in the picture.

There are some clear-cut indy models:

  • Sites run by solo entrepreneurs or mom-and-pop operators that are generally hyperlocal in focus with tiny staffs.
  • Statewide watchdog sites, often focused on state capitol issues.  There are several newcomers in this cluster:  Oklahoma Watch, Iowa Watch, Nebraska Watch, Maine Center for Investigative Reporting; they join more mature sites such as iNews, VTDigger and Texas Tribune.
  • University-led news startups. These include the likes of Neon Tommy and Intersections SouthLA, both at USC-Annenberg, or GrandAveNews at the University of Miami.
  • Niche sites. Coming on strong are topic-centric sites that focus on such things as:

While there is much talk of a "business model" for these entrepreneurial news sites, the best models seem to involve multiple, micro streams of funding. 

This can include grants, if the site is nonprofit. But it also includes ad sales, sponsorships, donors, subscribers, syndicating content, selling video, consulting, training and events, among other things.

For a small hyperlocal site, sustainability can be had on revenues of between $100,000 and $200,000 a year – enough to pay the founder, maybe a staffer, a commissioned salesperson,  and maybe some freelancers.

The most successful sites have a founder or leader who has developed skills to either sell ads (and close those deals) or write good grant proposals and develop relationships with their funders. They update content frequently and grow audiences by providing trustworthy news and information.

However, some funder fatigue is creeping into the nonprofit arena. This has less to do with the merits of what these news sites are producing as it does with competition from other social safety-net needs.  In recent months, some indy news initiatives have lost funding or received fewer dollars from long-time sponsors. At the same time, some funders are struggling to figure out how long of a runway they should be offering these startups.

As the year progresses, I think there will be more content sharing within community news ecosystems, growing content syndication efforts and greater comfort level among legacy news organizations to link out to news coming from other places in their communities as news outlets collaborate to amplify their individual efforts.

But there will also be retrenchment along with growth: More sites will go under; more sites will expand.

Serial startups are the hallmark of many entrepreneurs. It appears that media startups are now maturing into this space.