Even more worrying is what I call the Hyperlocal Donut Problem. In big, dense metro areas, dailies are struggling but will likely survive. Or, savvy hyperlocals will be able to capitalize on urban density to maintain coverage and still run viable businesses. In the rural areas, where newspapers are still the only game in town, local media continues to do pretty well and hold their own.
But gaps are starting to show in the zone between the cities and the sticks. In these donuts there are smaller cities and towns with their own local governments structures complete with school, police and fire departments, property taxes and the like. So there is plenty of action.
But there is not the population or economic density to support big advertisers or a real reportorial staff. These are exactly the sorts of areas that hyperlocal chains, like Patch.com, have tried to access and have, thus far, failed to make a profit at. For the towns in this area, the hollowing out of coverage is most critical. Several studies have shown that taking away media scrutiny leads to an increase of corruption and a lack of government accountability.
Fortunately, its so dang cheap to launch a hyperlocal news site ($3,000 cheap) that perhaps this giant donut -shaped hole actually presents a nifty opportunity for entrepreneurial journalists who may be able to pick up sufficient revenues left on the table from the dissolution of local publications yet still make a profit running at far lower overhead like West Seattle Blog. In the interim, it looks like real news coverage in these donut zones will take a hit and the communities themselves could suffer the consequences.