The collapse of the daily newspaper industry may ultimately have a revitalizing effect on media. The big metro dailies that are in such financial trouble today may be like the old mass-produced beers such as Schlitz, "the beer that made Milwaukee famous" that ran into financial trouble in the 1970s and is now produced in very small quantities. "Look at what microbreweries have done for beer," Dan Gillmor noted in a talk I attended at UNC's School of Journalism and Mass Communication (JOMC).
Indeed, sampling blogs and small online journalistic enterprises at bag lunches and meetups may become a widespread hobby like sampling beers at microbreweries. The obstacle so far, of course, is that this "new journalism" hasn't found a way to sustain itself financially. The beer is essentially given away for FREE.
Alan Murray, a UNC grad who now heads up the Wall Street Journal's online media efforts, also spoke recently at the JOMC. Professor Ryan Thornburg "tweeted" Murray's talk:
The newspaper biz never more "exciting", "vibrant", "filled with possibilities"...WSJ free audience from 8M to 20M uniques per month. Pay subscribers grow from 900K to 1.1M....Public won't be poorly served if number of DC reporters drops by 75%.
As long as the remaining 25 don't do pack journalism..."I look at the Drudge Web site every day." ... "He's just a very good editor." EXACTLY!..."Every journalist today is in effect marketing his own copy."...“do what you do best, and link to the rest” ...Does #WSJ biz model work for local public affairs news? http://is.gd/qvik
Five tips on charging for content, from Alan Murray.
Dan Conover contends in "2020 Vision: What's Next for News" that the sooner that slowly dying debt-ridden metro dailies disappear, the sooner new business models will emerge. National newspapers may rebound by 2010, local papers with circulations of 30,000 or less will continue to be profitable, but "the hybrid beast
known as the metro daily is in trouble, and most will not survive
past 2010 in their traditional configurations," he writes. These metro newspapers are taking up the market space in which innovation must occur, he writes. They are limiting serious competition in their markets. "What
succeeds in the shadow of an established metro, therefore, may not be
what ultimately winds up contending for the market positions vacated by
Old Media giants." (Hat tip: Andrew Sullivan)
'Hyperlocal' blogs and websites such as EveryBlock, Outside.in, Placeblogger and Patch are startups trying to find business models. They are looking to persuade small businesses that serve neighborhoods to advertise online rather than (or in addition to) the Yellow Pages. My friend Peter Krasilovsky, an analyst with the Kelsey Group who blogs at LocalOnliner.com, estimates this online ad market to be $32 billion by 2013. "Hyperlocal Websites Deliver News Without Newspapers," an article in The New York Times, explains. There's a good discussion over at Edcone's blog here and here about the NYT article, with the publisher of the Raleigh Telegram offering his sober experience.
"Internet companies have been trying to develop such sites for more than a decade, in part as a way to lure local advertisers to the Web," the Times reports. As someone who launched a "hyperlocal" Internet publication for Takoma Park, MD back in the 1990s, by necessity more as an avocation than a vocation, I know a bit about this.
I started in 1997 not with a business motivation but to mobilize neighbors electronically to address rising crime in the neighborhood. Eventually my email listserv reached more than 50 percent of the homes in my subdivision. More than 20 other email listservs in the town of 20,000 cropped up as a way for members of subdivisions to communicate. The challenge was that neighbors on these lists rarely communicated with each other, so I created one list to aggregate news and discussions for the entire town.
I had to have the flexibility to realize that one thing I learned in journalism school could not apply to this bootstrapped venture -- there could be no wall of separation between advertising sales and writers/editors. I sold ads to local advertisers and produced journalistic content. My modest efforts reached at most a few thousand people and brought in a few thousand dollars per year. I continued publication until I moved from the area in 2005.
Early in the venture, I tried to interest The Washington Post in hyperlocal online publications, but instead they invested in top-down rather than bottom-up online publications that failed.
The metric I developed was that 2000 unique locally-based website
visitors/users were worth about $2 each to collective local advertiser
revenue. So even with 10,000 uniques, you couldn't generate more than
$20K in ad revenue. Perhaps in neighborhoods with denser population, more commercial development and a far more aggressive ad sales rep than I was you could do better.
Another metric I developed was that a locally-based email list of say, 2000, with ads integrated tastefully into a regular email newsletter and website, would over the course of a year or so, generate 20 customers for a local business. To a real estate agent, a car dealer, or other businesses selling high-end products
or services, a real prospect is worth hundreds of dollars and a sale or referral from the site is worth thousands of dollars of advertising.
So the challenge for locally-based online businesses is identifying and delivering real prospects to your advertisers.
When online can do that, local advertisers will value it more than
they do print ads. Publishers still have to PROVE the value of online
ads to local advertisers. I'm interested to see if online social
networking will offer profitable returns for advertisers without being
so obnoxious site users are driven away. That MIGHT provide a new
revenue stream for online publishers.
Initially, giving one real estate agent exclusive rights to advertise on the
hyperlocal site was of more value to him than if I let 10 real estate
advertisers do so.
Based on my experience, I believe successful hyperlocal online publications, will have to:
- have a web-to-print mentality rather than a print-to-web mentality.
- work in alliance or in conjunction with local monthly or weekly print publications that already have an ad sales force, or with the expectation that a monthly or weekly print publication will eventually be produced as interest and demand increases.
- Some, perhaps many readers and advertisers, still want to see a print publication. The online habits of over-35 readers are not yet such that they will seek out online publications.
- work in alliance or conjunction with neighborhood-based email listservs or web-based neighborhood lists. Email listservs inevitably have more readership and participation than web-based services, but the problem may be that they produce too much email unless in "digest" mode.
- Local media fragmentation is a problem. Many locales have several publications, online and off, that cover them haphazardly and inconsistently, while no one covers them CONSISTENTLY, THOROUGHLY and WELL. Any successful hyper-local site must aggregate content from all sources. The recession may have at least one positive effect, leading to consolidation of local media sources and reducing fragmentation.
- I would insist that reporters, editors and ad reps for these publications live in the neighborhoods they cover, and promote the work of local bloggers. I don't think national corporate aggregator sites will be able to attract a critical mass of local advertisers.
- Hyper-local sites should take advantage of the viral marketing capability of Facebook, and the ability of FB to promote hyperlocal content in status updates.
Despite the continuing struggle to find viable business models, hyperlocal web
publications as an avocation or a volunteer effort do add value to a
community.
I have followed developments in the field for more than a decade and you can find links to the intellligence I've collected here.
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