Hyperlocal publishing can actually be a profitable endeavor. That was the main takeaway from a fireside chat with Business Insider contributing editor Owen Thomas and Topix CEO Chris Tolles at Street Fight Summit West on Tuesday.
Topix, the hyperlocal news community born in 2007, is growing at a rate of 20% a year and now has more than 15 million visitors. Tolles said the company has managed to beat the odds and turn a profit by operating on lean budgets and diversifying its revenue stream. “We are profitable. It took a long, long time,” Tolles said. “Keeping costs down was a big part in that.”
Trying to run an online publication like an old guard newspaper company is a losing proposition. In addition to keeping costs low, Tolles said Topix has managed to find success by aggregating content and giving people the ability to create their own content. “Those things are key,” explained Tolles. “You can’t build content like newspaper guys did, which is to do whatever you want.”
One of the bright spots in the industry is technology journalism, which has a high-quality audience. By writing about technology and gadgets in particular, Tolles said publishers can attract the type of young, high-spending audience that has been traditionally been difficult for publishers to reach.
For those looking to break into hyperlocal journalism, Tolles offered this advice: “Be a monopoly as quickly as possible.” Publications like Baristanet and The Batavian have found success by building a solid audience over time, as opposed to blowing up over night. “It’s unlikely that you’re going to become a force to reckoned with quickly,” Tolles said.
In addition to hyperlocal journalism, Thomas also pressed Tolles on the role that daily deal companies like Groupon play in the hyperlocal industry. Deal providers have shown media companies that it is possible to earn revenue off commerce alone, although generating revenue through content has proven a little harder. Despite ongoing issues surrounding Groupon’s future prospects, Tolles said there’s no denying that the company has been able to give merchants exactly what want—immediate access to motivated customers. “Putting butts in seats is something businesses want to do.”
Stephanie Miles is an associate editor at Street Fight.