David Cohn, founder of Spot.us, a nonprofit pioneer in community-funded reporting, has been hired by the UC/Berkeley Graduate School of Journalism to help develop a sustainable business model for hyperlocals. He will run three Ford Foundation-funded, student-staffed hyperlocals in the Bay Area, with the aim of making them self-supporting. As he began his new assignment, I asked Cohn what he thinks it takes to make hyperlocal work long-term.
Content, community engagement and revenue have been called the three-legged stool of the hyperlocal business model. What do you think?
A stool with two legs will topple over. One is more like a pogo-stick. Three legs—and you have something. The three support each other. If you don’t have content, then there is nothing for a community to gather around and make valuable. If you don’t have a community, then the content might be great, but it won’t be valuable. And if you have those two but not revenue, that may work as a continual balancing act, but it’s a labor of love, not a sustainable business. If your goal is to start a business, I’d make sure you work on that three-legged stool ASAP.
You said at a recent Berkeley j-school session that focused on new media failures, “The journalism ‘community’ has begun to recognize failure as something positive. The journalism ‘industry’ hasn’t.” Would you elaborate?
The journalism “community,” which is broader, includes those who do journalism from a sense of passion. The narrower journalism “industry” includes those for whom journalism is primarily a living—making a product. Because the journalism “community” has a different set of stakes and goals, failure is embraced in an attempt to try something new—process over product.
Do hyperlocals have to look at innovative ways to attract revenue—beyond self-served 150 x 150 squares, Google AdServe and remnants? If so, do you have any suggestions?
I come from the philosophy that there are no “new” revenue streams. The main ways news organizations can make money are 1) advertising, 2) direct sales, 3) services. But within those above there is a lot of room for improvement. Everything from setting up “social ads” (NowSpots), a local artist marketplace (an Etsy tailored for your own niche) to an ad network. We need to start thinking outside of the Google AdSense box. It’s a great place to start, but that’s exactly what it should be, a place to start. Some of my thoughts on advertising can be found at my DigiDave blog.
Hyperlocal is heading generally down two paths—sites created by social entrepreneurs who generally self-fund their operations, and those created by major media with millions of dollars of investment. Is there room for both, or will we see a Darwinian selection in that landscape?
I’m glad to see both attempts being made in earnest. There are great examples of both, and there is room for both just as there is room for Ikea and room for your local antique store that sells awesome, hand-crafted furniture. But the corporate version of hyperlocal needs some work. It’s “hit or miss,” with each site depending on who is running it and how much passion they have to attract the attention of the community. If there are sites that don’t attract attention because the editors don’t ooze passion, and the corporation loses a lot of money, that hurts.
What do the three Berkeley j-school-operated hyperlocals bring to the table that you think will help you in the quest to develop a sustainable hyperlocal business model?
A ton! First, they already have a track record in their communities. Mission Local has been around since 2008 and has become an integral news source in the Mission. Richmond Confidential is only a year old, but, to my knowledge, is the only legitimate online news source serving the city of Richmond in the East Bay. If we can build out a sense of community and then revenue on top, we may just have something. But there is also something to be said about experimentation. These three sites give us the opportunity to really look in and experiment. For example, one of the first things I’m going to do is put one of the publishers on OpenX, another on Double-Click for Publishers and perhaps the third on another ad-server solution. I figure we should compare/contrast and publish what we learn.
Are there are hyperlocal sites elsewhere—mom-and-pop or major media variety—that you’ll be including in your research to develop a model?
Yes. We hope to look at big nonprofit folks like The Texas Tribune (who have offered us a look in their books and peek under the hood) as well as small players in the Bay area and beyond. I think the real trick is making sure we are not comparing apples and oranges. Still, all angles should be looked at.
The local market, counting all media, is put at $100 million to $150 million. But hyperlocal is getting only a small share of that pie. Do you think it can significantly increase the size of its slice, and if so, how?
The question is, will hyperlocal earn its fair share? What do people pay attention to? Do people care about news at the hyperlocal level, the metro/regional level or in the niche world (technology, sports, etc.). I think hyperlocals can get their fair share of the market, but they need to show their worth. That is more on the content/community side—the revenue will follow—but we have to find out just how valuable our information is to the greater readership.
Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is developing a Web site to rank communities on their livability across 20-plus categories. The rankings will be dynamic, going up and down daily as they are updated through a combination of open data, journalism and feedback from local experts and users of the site.