EveryBlock President: Economics of Hyperlocal Editorial ‘Broken’

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Between Patch’s beta redesign, NextDoor’s big funding round in the spring, and the Guardian’s hyperlocal news project, N0tice, continuing to expand in the U.K., the hyperlocal news landscape appears to be converging on the idea that hyperlocal information needs to be social. Meanwhile, adding to noise in the local content space, the Journatic scandal in the early summer thrust a set of new hyperlocal plays into the spotlight, raising questions about the sustainability of models which looked to data and technology to replace the heavy costs of editorial content. While the trend line appears to be pointing to a model founded in social, the role of data in editorial, and user-generated content remains very much up for debate.

EveryBlock, one of the earliest entrants in the hyperlocal data space, rebooted in 2011 after being bought by MSNBC.com in 2009. The pivot shifted the product’s focus away from its roots in data aggregation toward a more interactive product centered largely around user-generated content. This past summer saw some major changes for EveryBlock’s management — NBC Universal acquired MSNBC.com; meanwhile, EveryBlock founder Adrian Holovaty announced he was leaving the company in late August.

We caught up with EveryBlock’s president, Brian Addison (who will be appearing at the Street Fight Summit in two weeks), to discuss the state of the space, and the role of data, editorial and user-generated content in the future of hyperlocal news.

You’ve spent the majority of your career building branding strategies for large companies. Where does “brand” fit into the hyperlocal space today?
We’re operating in a space that excites a lot of people but there’s so much dust that needs to be settled. There’s so much uncertainty around sustainable business models and who’s going to emerge as a leader, and part of that is the notion of building a better mouse trap — that’s the tech product side of things. But it’s also about building a better brand. You need to build an identity; you need to stand for something as a brand. And it raises questions: what does a brand like EveryBlock stand for, and how is that different from what a brand like Patch stands for, and how does that compare to NextDoor or others in the space?

No brand in the hyperlocal space has atrophied more than Journatic’s over the past few months. What happened?
There are few industries that place a greater premium on integrity than journalism. I think that’s where a couple of slip-ups — when we talk about brand and the value of brand — can really damage your company beyond the point of repair. So I think it was either a lack of transparency or just irresponsible practices that really got them in hot water. It’s sad, because it doesn’t necessarily represent the philosophy of the leadership. It’s just unfortunate that the actions, in this case of a few people, can have such a damaging effect on the overall company, the brand, and what they stand for.

Some have used the Journatic scandal as a evidence of flaw in the data-driven content model, which was at one point at the heart of EveryBlock. What does the Journatic debacle say about the role of data in content creation?
At EveryBlock we’re focusing less and less on data. On the one hand,  there’s a ton of [data] out there and people are trying figure out different ways to organize it — and that’s great. While data was at the core of our product when EveryBlock first launched, we found, over time, that it kind of has a niche appeal. In a way, we need to return to the question of what consumer need are we trying to address with this data? How much value do we as a reader place with that type of information? With EveryBlock, some of our users value that, almost raw, data. And it drives more value if you put some editorial around it. But for us, data still plays an important role in what we do but we’ve shifted our focus from the aggregation and organization of that data to a set of community features that have driven our growth from our redesign about a year and a half ago.

So with EveryBlock 3.0, do we see a push into editorial content?
My strong hunch would be no, largely because I think the economics of that model are broken. That’s pretty easy to see. Patch seems to have learned that lesson, and my strong hunch is that it’s that realization which is driving a lot of the changes we’re seeing.

Original editorial content is a shadow of what it used to be, largely because of how the economics have changed. As a consumer of news, that’s unfortunate, but it speaks to how difficult it is to keep your head above water producing content in that way.

We’ve seen a solid community of independent hyperlocal developers grow over the past few years, built largely on top of traditional editorial models. As a scalable practice, do you believe this approach is viable?
There’s always a certain value that people will put on strong, editorial content. It’s too bad that [original content] has gone by the wayside. Original editorial content is a shadow of what it used to be, largely because of how the economics have changed.

As a consumer of news, that’s unfortunate, but it speaks to how difficult it is to keep your head above water producing content in that way. If you can build a business around creating strong editorial content, then great.

But I think the other part is, if you think about the consumer, the way people consume news has changed greatly (for better or worse). People like more bite-sized news, which in a lot of cases wouldn’t even be considered journalism, and doesn’t really call for editorial type coverage. Consider BuzzFeed. That’s just highly sharable, easily digestible nuggets of, maybe you call it, news with a lower case “n.” But their growth rate is something of which anyone would be envious. In the end, it goes back to the consumer, and the question of what they value, and whether we can, as a product, deliver on that need.

Earlier in our discussion, you spoke about the value of brand. From a consumer perspective, how do you view EveryBlock in relation to Patch and NextDoor?
From brand perspective, I’d like for users to view EveryBlock as a civil place for discussion, and that’s something we’re trying to try to steer participants toward on the site. Is that happening all of the time? No. I don’t think that anyone with the user-generated content space can say that’s the case. But if we build a brand, we want to make sure it carries the intimacy and familial feel of a neighborhood, and have we need to ensure that it’s a safe space for civil discussion.

When it comes to Patch and NextDoor, it’s hard for me to comment on their goals. One of the major difference between us and them, and this kind of speaks to the current footprint than anything else, is that [EveryBlock] is a model that works best within a densely populated area. We’re very much about dense, and often times, socio-economically diverse neighborhoods whereas Patch and NextDoor tend to have a more suburban, single-family-home audience. Again, the difference likely speaks more of their current footprint than their aspirations, but their product is reflective of that.

Can the hyperlocal industry continue to grow as it is today, or is there going to be a shakeout at some point soon?
At this point, it’s sort of a race to take advantage of that network effect. All of a sudden, there’s a first mover’s advantage to acquiring new users and getting them to participate.

The interesting difference between the three of us (Everyblock, Patch and Nextdoor) — if you circle us as a group in the space — is where there are nuances and different features that will continue to converge on each other over time and it will be interesting to see who winds up where. For example, NextDoor is a private social network that requires users to display their full name and home address. Strategically, we’ve gone in a different direction where we allow anonymity from our users, and that’s an interesting topic for debate within the space. Patch is knee-deep in a transition where they’re starting to encourage user-generated content, and it will be interesting to see the uptick on that, and how that shapes their product moving forward. I guess the short answer is: Is there room for all three of us?  I would say, likely not. But there’s also something to be said in looking back to the old model where a town would have one or two newspapers, as well as an alt weekly or two.

On the revenue side, the number of marketing solutions selling to small businesses has exploded, and the platforms available for these advertisers to reach local consumers continues to fragment. How can the industry reduce some of the friction caused by the massive fragmentation?
I think its a race to scale, and you need some kind of almost standardized solution to emerge. Who knows, that could come from Facebook or Google, or it could come from a company which does not exist today.  Everyone is racing to come up with the most accessible, turnkey solution for small business, which can provide the right analytics and allow advertisers to fully understand the return a campaign generated. A lot of these companies are funded in various ways, and the clock is ticking for them to crack the code. Someone will crack the code, but they need to grow too a certain size where they can benefit from the scale economies that dominate the business world. I don’t think it can continue on as a highly fragmented space. Some “one,” or some small group of players, will claim a dominant share of the space.

Steven Jacobs is deputy editor at Street Fight.

Brian Addison will appear on a panel looking at data journalism at the Street Fight Summit in New York later this month.  Join him and hundreds of other top hyperlocal industry executives — buy your ticket today!