Has the moment finally arrived for the flourishing of local, digital-native news businesses?
A case can be made that it has, though I’ll admit that I thought that was true as long ago as 2008, when I began watching California’s hyperlocal news sites at USC’s Center for Communication Leadership and Policy.
The three dozen or so new digital enterprises we were studying then were full of ambition and promise – even though they collectively met Jan Schaffer’s famous description of hyperlocals as “not yet a business.” These California digital entrepreneurs were leading a revolution that looked, to me anyway, quite ready to take off.
But for the most part it wasn’t ready. It’s perplexing, to say the least, that seven years later, digital local news sites have made only halting progress toward shedding Schaffer’s “not yet” label.
Only in rare cases, involving rare people, have new local news initiatives robustly sustained their way. The business models that would enable a true flowering of digital local news have not yet emerged.
But things may be looking up, at least a little.
There clearly is some good news in the latest Michele’s List report by Michele McLellan, who has done extraordinary work documenting the business of state and local news sites across the country. Revenues are up at a large majority of the 94 sites she surveyed, and 14 of them reported annual proceeds of $250,000 or more. Perhaps most important, these operations increasingly are adding the business-side infrastructure that surely is critical to further growth.
Let’s not put too much gloss on these results, though. Slightly more than half of the surveyed sites had revenue of $50,000 or less, and nearly two-thirds of publishers receive either no salary or a partial salary. As Jeff Jarvis observed recently in his Buzz Machine blog, running a sustainable local news site is “hard work, damned hard work.”
But the overall progress is undeniable, and it’s impressive to see the list of businesses with revenues of more than $250,000 annually. (There are many others, too, who did not respond to the survey.)
These days, I find myself thinking that local, digital news is about to acquire another tailwind: the accelerating decline of many legacy newspapers. The reporting of Ken Doctor, Rick Edmonds and others suggests that newspapers’ overwhelming dominance of local markets may be fast diminishing. Might this create the opening digital news entrepreneurs have been waiting for?
I learned many years ago from my colleague Jay Rosen that it’s wrong to think of the new digital world of news and information as replacing legacy media, principally the legacy newspaper. It was never going to work that way on the news side, and it was never going to work that way on the business side. The disruption that is digital was far too earth-rattling to think that the old ways, the old framework was going to survive and apply.
Still, you can’t help wondering if we haven’t reached a point in newspapers’ quickening decline where digital startups might find a bit more breathing room in local communities. It’s taken a while to reach this point – longer than I and others had expected – but the manifestations of newspapers’ loss of dominance are becoming more and more visible.
The net loss of journalism people-power has been huge, and it’s still in full throttle. The latest survey by the American Society of News Editors shows that newspaper staffs fell by double digits last year, to 32,900. By the end of this year, if the rate of decline continues, newsroom employment may be roughly 50 percent lower than in the peak year of 1990. The decline in newspaper advertising has been even quicker, dropping 55 percent between 2006 and 2012, according to the Newspaper Association of America.
Ken Doctor’s recent series of blogs about newspapers’ woes amounts to a cri de coeur about an industry he fears is interested only in milking the print product, ignoring the need to invest in a digital future.
Many of us have become numb to this storyline. Almost everyone knows newspapers are in major trouble. Interestingly, though, even as newspapers have significantly shrunk, they still have been dominant players, often still the dominant players, in their markets. In all but a few places in the country, the metro daily still publishes daily, and it still guides the news agenda.
Just ask David Boraks about newspapers’ lasting power. His sad farewell blog in May announced the shutdown of his nine-year-old North Carolina news site, DavidsonNews.net (as well as CorneliusNews.net).
“In some other markets around the U.S.” he wrote, “community news sites have won advertising contracts from larger businesses – hospital groups, grocery chains, car dealers and other companies – as well as nonprofits. Alas, in the Lake Norman area, most local ad dollars still go to print publications.”
But the daily newspaper’s decades-long supremacy is fading quickly now. (Clay Shirky wonders if something on the order of a free-fall could happen.) Increasingly, newspapers are making their digital-first talk a reality. That’s a good sign for their future well being but also a tip-off that the difficult crunch time of their print-to-digital transition is now beginning in earnest.
How might the shrinking of newspaper revenues open the way to online news startups?
Advertising possibilities. Although local news entrepreneurs quite likely will need to develop diversified revenue streams, entrepreneurs like Howard Owens of The Batavian have already shown it’s possible to sustain an online news business with local advertising. The newspaper’s shrinking hold on ad revenue presents an opportunity.
Subject-matter gaps. I know; the geographic scope of this category can be much larger than local. But it can work locally. In reimagining the future of the Sacramento Bee, editor Joyce Terhaar, a former colleague of mine, says the Bee and other McClatchy papers eventually will organize around four to six topics in each market. Similar strategies have been launched at other newspapers and newspaper chains. It’s a smart one, because newspapers can no longer do everything, and their news resources will only decline. But even if successful, this strategy leaves multiple openings for news entrepreneurs to develop subject-based businesses. Jeff Jarvis calls them “beat businesses.” Jay Rosen says his advice to aspiring journalists is: “Start a niche news service on a subject some people care a lot about.” At the local level, there is going to be growing space, I believe, to become the go-to place for niche information people care a lot about.
Community response. Until now, local communities’ basic response to their newspapers’ decline has been to complain about it. I suspect the next phase will include reactions more helpful to the development of digital news operations. In some places, community anxieties may develop about how local residents will continue to be informed. Some community foundation officials may heed the Knight Foundation’s call to support local information resources. Business owners may come to understand that “buy local” can also apply to their own advertising purchases. Local discussions about what to do about their news and information needs are about to get more interesting.
None of this means that local news sites and apps will be the prime beneficiaries. As Boraks noted in his blog, businesses like Facebook and Google may be best positioned to grab local ad dollars. And many other players will emerge as digital players in the local-news environment. Commercial TV stations may amp up their digital resources. So might public radio and television. Don’t count out newspapers, either, from making a successful print-to-digital transition, albeit with diminished resources. (I’m cheering them on.) Many other actors besides journalists – from government agencies to hobbyists to private businesses – may also be participants in providing locally relevant news and information. New hybrids that don’t require a traditional reporter, such as data visualization and civic tech, will emerge. And, of course, the search for a workable business model goes on.
But digital news entrepreneurs, I believe, will have an improved opening in the next few years to bring new journalism resources to local communities. This coming period may be a bit of a sweet spot. They can draw on lessons learned the hard way by early pioneers, while at the same time enjoy the advantages that come with being a digital-only news operation. (Newspapers, TV and radio have the very tricky challenge of developing digital while still tending to their legacy platforms.)
And here’s the really cool thing: They have a chance not just to find business success, but to help create the best-informed communities in history.