Can Tech Innovations Bring Revenue for Hyperlocal Publishers?

What innovations can help startup news sites earn money? How should hyperlocal publishers decide what technology to use? These are constant questions at the Journalism Accelerator, a website focused on crowdsourcing knowledge to help journalism find new, sustainable financial models. I asked David Hirschman, co-founder of Street Fight, and Michael Meyer, a Columbia Journalism Review staff writer who also runs CJR’s Guide to Online News Startups, to weigh in on these and other questions in a conversation about innovation and revenue in publishing.

David and Michael are both steeped in the hyperlocal space, but they have different expertise. David brought up Walmart’s creation last fall of Facebook pages for individual stores as an example of companies going straight to consumers, skipping the intermediate step of advertising, in print or online. “There are certain kinds of business that work particularly well in publishing and work particularly well next to local content,” he said, “but there are a lot of ways to reach consumers.” As Michael noted, that’s the crux of the shifting industry. He is finding that as hyperlocal news sites mature, they’re building credibility as institutions that may counter some of the direct company/consumer relationships that technology allows.

The potential of that direct relationship seems to push so much innovation. In the interview, I asked how much energy in tech development is focused on earning revenue by aiding local commerce and how much is aiming to serve local news publishers. Granted, that’s probably not possible to quantify, but David cited the warpspeed development of the daily deals industry as one major driver in innovation around commerce platforms recently. With a lot of shakeout in that field, he suspects the innovation pendulum may swing elsewhere next.

But even now, many publishers are overwhelmed with new tech tools, said CJR’s Michael Meyer. “I think some sites make the mistake of trying to get ahead of the curve because that’s something we prize in journalism these days,” he said. But going slow might pay off more. “They’ve got to remember that the audience and advertisers have to be with them step by step.”

You can read or hear the full interview on the JA blog, or skim highlights with links back to the audio.

Emily Harris is editorial director of Journalism Accelerator, a forum about innovation in journalism.

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  1. bradleyplunk
    June 3, 2012

    I think there is an interesting school of thought here. A hyperlocal site like Patch to me as the most upside for growth. It is still going through growing pains but in terms of revenue, I think with the right marketing it will increase.

    On the other hand, you have a hyperlocal company like Topix, which has more users possibly than Patch, but because of the poor choice of not requiring users to register and very low moderation, it gets a ton of negative publicity outside of Tech sites (no disrespect to Tech sites) Topix profit margin is always going to be limited because of the numerous complaints the site receives by media and Attorney Generals and the growing number of cyberbullying laws. Their audience, while it may be decent, aren’t the demographics that are going to go out and spend a lot of money on advertising and because so much libel occurs there they have ran off the more formally educated, affluent auidence with money (generally speaking and not intended as a put down of anyone). To me, the wiser move is to require user registration and more civil dialogue (sort of like they are doing with Politix). Topix has allowed itself to become a libel, gossip site and that limits long-range revenue. It would be wiser to make people sign up, moderate better, eliminate the less profitable forums to focus on those making money, and get the media and attorney generals off their back because the content there is horrid most of the time. I know this sounds all critical but I am talking business for this story. It is better to have perhaps fewer users initally but a good reputation and  users that will support advertisers. Someone who goes on to post a non-news lie about someone is not there to increase revenue.

    A good hyperlocal company has got to find a balance of being meaningful while staying out of the press negatively, away from lawsuits, and numerous complaints. There has to be some balance and for hyperlocal to work it has to be based on news and community events, not libel. Patch and some others seem to have figured that out, so there is no telling what the potential is while others have limited their potential. Just my two cents and not intended to offend.

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