Hyperlocal Publishing: Who Stumbled, Who Was Nimble and What’s Next?

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newspaperThe big story in hyperlocal publishing this year was the fall of corporate hyperlocal pureplays like Patch, and Everyblock — big bets that failed to reach sustainability.And so as we look to the New Year, a persistent question once again emerges for community news: when will publishers find a digital model that works?

Corporate pure plays stumble; Indies more nimble
There’s no hiding that 2013 was a very tough year for three hyperlocal networks owned by corporations. One – NBC Universal’s nationwide EveryBlock – was shut down (although Comcast is reviving it), while two others – AOL’s national Patch and the regional Daily Voice in the New York-Connecticut suburbs – went through major site downsizings and system-wide staff reductions to stay in business. Meanwhile, another corporation – the metro New York City cable TV power Cablevision – tried to compete in the hyperlocal market in Westchester County, N.Y. – where it owns a major TV station – but gave up after a year when it failed to make inroads against existing competitors.

A special case is the Chicago Tribune’s TribLocal network for suburban “Chicagoland.” TribLocal expanded the number of its weekly inserts that go to subscribers of the daily print Tribune and began free delivery to non-subscribers who request it.

The Trib also resumed limited use of Journatic, which specializes in automated processing and syndication of handouts and list-type content that usually doesn’t require additional reporting. The Trib had suspended all Journatic editorial work in 2012 after a furor erupted over the service’s use of fictional bylines on automated coverage and one case, plagiarism. A Tribune audit of Journatic’s editorial operations and standards found no pattern of problems, Journatic CEO Brian Timpone said.

Independent sites, overall, fared better than corporates in 2013, with several expanding into mini-networks and selected others continuing to generate steady revenue as one-offs. But one highly regarded “indie” on Chicago’s North Side – Center Square Journal and its cluster of sister sites – was essentially shut down by its founder, hyperlocal pioneer Mike Fourcher, in the face of weak revenue.  Another respected indie site – Sacramento Press – was sold after its founding owners, Geoff Samek and Ben Ilfeld, also hyperlocal pioneers, saw their revenues plunge in a hotly competitive market.

No clear sustainable model for community news yet
As it cut back on reporters and editors this year in a push to reach run-rate profitability by the end of 2013, AOL’s Patch tried to close gaps in content by pushing its ” Local Voices” program to attract citizen bloggers and featuring data-driven articles from its “Newscrunchers” service. But self-promoting blogs proved no substitute for originally reported articles, and “Newcrunchers” was plagued by clunky data visualizations that were as hard to decipher as the health-test results that patients get from their physicians.

Daily Voice claims it continues to make progress on its new editorial model built around three sources of news: original reporting by fewer reporters, “high-level” aggregation of content from external sources, including social media, and recruitment of top local government officials to write articles. Daily Voice founder Carll Tucker, who took over again as CEO during the company’s near-death financial crisis last March, said the new model has helped to wipe out operational losses at the 41 community sites, but not yet a large monthly shortfall at the corporate level.

Native ads and programmatic buying could help hyperlocals recoup revenues
The bad news — from a Borrell Associates Survey — is that small and medium-size businesses plan to spend more than half of their marketing budgets on “owned” digital activities like website building or social media. That means that community news sites, which already only get only a small fraction of local digital ad dollars, will get fewer crumbs. Most local digital ad revenue go to commerce sites like AutoTrader and Groupon.

The good news is is that “programmatic” ad strategies could potentially lead national marketers to give hyperlocal sites a closer look. Broadstreet Ads – which does network-focused adserving for independent sites, has begun to experiment with programmatic placement at several of its customer sites in New Jersey.

While many indies don’t want, and in some cases will not even accept, national ads, two publishers —Scott Brodbeck, founder of the three “Now” hyperlocals in the Northern Virginia and Maryland suburbs of metro Washington, DC,  and Liena Zagare, founder of the four Corner News Media sites in Brooklyn —have cracked the door open a bit. At the other end of the spectrum is Howard Owens, publisher of The Batavian in upstate New York, who calls content networks and national ads “fool’s gold.”

There’s a lot wordage about “native” advertising, in which businesses pay to post their own version of “news” as well as sponsorships, in which businesses support the cost of staff-produced content. But most hyperlocal sites have not yet ventured very far into this new territory.

Perhaps the most successful example of native advertising is at the three Village Soup publications in Midcoast Maine operated by publisher Reade Brower. The self-published four- and five-line ads feature news-like updates on products and services businesses offer. They  produce about $300,000 in revenue at the three Village Soup sites. That’s $100,000 per site from just one revenue stream — more dollars than some news sites, corporate or indie, generate overall.

Keep an eye on TV stations in 2014. Thousand of local stations created community-based sites this year, many of them using DataSphere to facilitate sales to local businesses. DataSphere’s services also include calendar listings – but not general editorial content – and front- and back-end system technology. There were also major broadcast consolidations in 2013 – Sinclair acquiring Fisher Communications’ 20 stations and growing to 162 markets) and Gannett buying Belo’s 20 stations and widening its reach to 43 markets.

How this consolidation among TV stations will play out in the hyperlocal digital space is, at this point, a big, unanswered question. While the TV stations have made a big hyperlocal footprint — those thousand-plus sites, many of them in major markets — that footprint is, so far, a light one. The stations’ community websites have yet to convert their reach into significant levels of engagement. The TV stations’ sites have  strong calendars, but their general news menu tends toward press releases, with a strong emphasis on crime. Indie sites in some competing major markets, like Seattle and Washington, D.C., are doing well by offering a richer menu of content.

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of the in-development hyperlocal news network Local America that will rate communities on their performance across a broad spectrum of livability. He will present the site’s new demo on Charleston, S.C., at the DIG SOUTH 2014 interactive festival in Charleston on April 9-13, 2014.