Feb 18, 2010

When Big Box meets hyperlocal news

After years of trying to conquer the earth, big media companies are starting to look at the “untapped” hyperlocal market to save their empires. Just yesterday, Business Insider reported that AOL will expand its existing Patch hyperlocal network from the previously planned 30 to “hundreds” in 2010.

AOL isn’t the first big box to move into mom-and-pop territory. The New York Times and The Los Angeles Times run hyperlocal news sites, and national news startup Politico is branching beyond Capitol Hill into Washington’s other hoods. Good for them, and good for the neighborhoods they’ll serve.

(Full disclosure: I spoke with Patch’s editorial director last month about the network’s expansion into my area. He couldn’t give me a job for reasons unrelated to business, but he did offer to take me around the company’s New York offices. Gee, thanks.)

But is big media’s venture into the neighborhood good for existing hyperlocal news sites? I’m leaning towards yes. Here’s why.

First, it creates paid job opportunities for hyperlocalists. In the case of Patch, the editors in charge of individual sites will receive a salary — don’t know how much, but a work-from-home staff job beats entrepreneurial burnout any day of the week. I only hope these editors and other content contributors receive a fair wage for their work.

Second, it has the potential to establish a profitable hyperlocal business model that others (read: me) can rip off. AOL has an army of MBAs crunching numbers to make this work. Let them sort it out and prove to sponsors that online hyperlocal news has value. I’m not too proud to surf in their wake.

Third, competition is good for business. Sure, big boxes like AOL have the sales staff to generate revenue and support editorial operations. But sponsors are always looking for an alternative, one that makes the same personal connections that fuel mom-and-pop businesses. And it doesn’t hurt to offer lower (but not too low) advertising rates and social networking opportunities.

If big media calls with a buyout check or job offer in hand, take it. And if they don’t, bury them.

Photo courtesy of Flickr user six steps.

Comments (14)

  1. Feb 18, 2010
    fernando diaz said...

    Great points Jessica. I hope ultimately this will provide for more awareness at the local level. The challenge will be making it deep and not a surface job to dominate search. But it also represents a lot of opportunities for journalists, as you mentioned.

    Editor’s note: Thanks for finding my blog post, Fernando. Actually, Jessica was kind enough to share this post’s URL with her Twitter followers, but I wrote it. My information can be found here. — JD (Feb 18, 2010)

  2. Feb 18, 2010
    JR Johnson said...

    After discovering Jeff Jarvis on a podcast called This Weed in Google, I have been repeatedly exposed to his view of the future of news; the hyper-personal news stream. In this case “personal” can be interchanged to some extent with “local”. The idea of having a news source dedicated to one’s immediate area is compelling, but the majority of examples out there are in urban settings. I live in a San Diego suburb (of which there are a lot), so population density is exchanged for urban sprawl. Is there a tipping point or a mental checklist when deciding if an area is worthy of developing a hyperlocal website.

  3. Feb 18, 2010
    Tracy in WS said...

    Maybe OK if they all wanted to hire editors. Most don’t.

    Two big-media companies out here have launched respective flotillas of faux “neighborhood sites” – one “model” with each site getting nominal attention from a fragment of an officebound producer who’s tasked with posting calendar items, news releases, and whatever the areas’ real news sites posted two hours earlier IF applicable and replicable, the other of which is just an aggregator. Neither is truly covering neighborhood news, much less providing 1-neighborhood 1-journalist (or more!) jobs. And they do NOT make the “same personal connections” as bonafide neighborhood-based operations. They’re run out of big-media HQ downtown.

    Luckily, in the neighborhoods where there are real news sites (and in Seattle, there are more than a few of us, and no, some of us are NOT s-broke), nobody’s fooled. But in the ones where there are not, some cookie-cutters look to me like the mulch that’s stifling the thousand flowers that could otherwise bloom.

    To JR – what do you mean “worthy”? ANY area is “worthy.” Everybody DESERVES to have their neighborhood covered. But if you’re not sure you want to do it, don’t. As the author of this site notes, it’s no walk in the park. But I worked 30 years in corporate-owned news media, walked away from a high-paying high-ranking job to do this, and wouldn’t trade a day of it. My only advice is – have enough money to cover your expenses for a few months of running a site to see if the community embraces it, before even TRYING to sell ads. Call me a quaint hippie idealist/ethicist, but it’s wrong to try to sell somebody an ad before there’s really an audience out there to see/act on it.

    Speaking of which, why do we need an army of AOL number-crunchers or anyone else to prove that advertising on neighborhood sites has value for local businesses? We, Baristanet, more than a few others have already proven it. And it’s not some new fancy model. It’s the same old model that fueled community newspapers – only better because online ads are seen over and over again instead of going to the recycling bin after one or two reads.

    I hadn’t heard of this site’s writer/editor before the Jarvis link pointed my co-publisher here, so I’m not sure why you abandoned your project, or what it was like. I’m sorry it didn’t work out. But there are entrepreneurial neighborhood (and otherwise) news businesses that are growing and thriving. And I disagree re: the big-boxes – I saw what corporations did to the old-school media world and I don’t want to see that happen to this before it’s barely begun.

  4. Feb 18, 2010
    Jennifer Deseo said...

    Thanks for your comment, Tracy. For more information on why I folded my hyperlocal operation, click here.

    Hyperlocalists hold many advantages over big-box media, that personal connection being one of them. (I won’t list more advantages, as I’ve given big media enough free consulting.) That’s one reason why profitable or at least solvent hyperlocalists shouldn’t worry about big box publications moving into their neighborhoods.

    As far as proving the value of hyperlocal pubs to advertisers, allow me to clarify. According to Jarvis, many small businesses still do not understand how internet advertising and marketing work. (I agree with his assessment.) Even worse, some hyperlocalists (myself included) don’t even know where to begin to explain online advertising and marketing to these small businesses. If AOL (or whoever) has the time and energy to educate those small advertisers, then that’s less work for me when I come knocking with my rate card.

    As for JR’s question on density, I’ve heard all kinds of recommended readership numbers thrown around, none of which I would have ever attained. What might be more important is the number of potential advertisers in your area and the opportunity to offer networked advertising (assuming you operate a for-profit organization). We can explore that in a future post.

  5. Feb 18, 2010
    Tracy in WS said...

    Big companies already nearly ruined the online ad market with the big advertisers by treating online as a throwaway, setting the precedent for the low rates and valuation they all bitch about unceasingly today, now that they have to lie in the bed they made. So I don’t expect them to do anything that will make sense for a true small local news org. And I expect them to abandon the market when they realize they’re not going to get rich on the backs of small local businesses the way they briefly did on the bigger ones.

  6. Feb 18, 2010
    Jennifer Deseo said...

    I still believe that hyperlocalists who have targeted content and a viable business model don’t have anything to worry about from big media. I’ll use The Washington Post’s hyperlocal experiment as an example.

    About six months after I started my publication, The Post launched LoudonExtra, a hyperlocal site in Virginia. They also bought URLs for neighborhoods throughout the DC region, including one in my beat.

    Admittedly, I worried about what would happen to my business. But I soon saw the differences in our products. While my site focused on “simple” content like text and still photos, LoudonExtra dumped its capital into graphic user interfaces (GUI) and all kinds of eye candy.

    That lack of substantive news, plus the collapse of Loudon’s housing market, prompted The Post to fold it as a stand-alone publication a year (maybe a little more) after it launched. Meanwhile, my site carried on.

    That was my experience, but perhaps we should ask the publishers of BaristaNet how they’re managing with Patch sites in their beat. I’ll try to get in touch with them.

  7. Feb 19, 2010

    [...] If you’re a local news blogger, or if you’re just interested in the subject, there’s a much more intelligent look at the AOL news, and some excellent comments, on a post by Jennifer Deseo — When Big Box meets hyperlocal news. [...]

  8. Feb 19, 2010

    [...] That approach can get expensive very quickly, however. And while there may be plenty of out-of-work journalists around due to newspaper industry layoffs, are there enough talented writers and reporters to staff all of the local sites Patch.com has in mind? If not, then the company will quickly have to come to grips with the wildly varying quality levels that “citizen journalism” can produce (each Patch site has a single professional journalist who works with volunteer and freelance staff). Some feel that whatever happens with Aol and its expansion, it can’t help but be good for business. [...]

  9. Feb 19, 2010

    [...] via When Big Box meets hyperlocal news « The Hyperlocalist. [...]

  10. Feb 19, 2010
    Ed Kuryluk said...

    I agree Jennifer, this will ultimately be good for our sites.We have many small local businesses in town. I can move on a dime to accommodate their requests, especially the outside the box stuff. I bring ideas to them. Patch, being a part of AOL, is not as nimble.

    Also, the people I’ve seen get hired by Patch, seem to be Real Estate agents looking for a second income, or soccer moms (no offense, I’m married to one). To succeed in this space you need to be savvy enough to keep your site ahead of the curve. These people aren’t cut from that cloth.

  11. Feb 21, 2010
    polly kreisman said...

    Here in Westchester County, NY, patch has come in guns blazing. One editor contacted me looking for a job because, she said, she was being paid about $40,000 and was “sleep-deprived,” with a first post due at 8 am each day and a 12 hour day following (or until the last City Council meeting ended..)

    On that salary she could not afford to live in the town she was “covering” and so commuted an hour each way from Brooklyn. She says her “staff” were stay at home moms who never made deadlines (no dispersions cast towards SAHMs but I agree w Ed, it’s not a journalistic cloth one is necessarily cut from…)

    Some of my advertisers are trying them out. I say go for it. I think they’ll be back.

  12. Feb 22, 2010
    Jennifer Deseo said...

    Thanks for those details on the Patch job, Polly.

    My thing is this: I did the same work (“sleep-deprived, with a first post due at 8 am each day and a 12 hour day following or until the last City Council meeting ended.”) and made less than zero dollars, multiplied by three years.

    If a hyperlocalist needs the money (like me), then I say go for it. But I agree that some of these big-box hyperlocal franchises won’t succeed as businesses.

  13. Feb 22, 2010
    polly kreisman said...

    Hi Jennifer-
    i agree. but i would rather be that sleep deprived. etc dum dum working for myself and building my own brand than AOLs. Sure wish you lived in NY. I have some ideas for you if you would email me? editor@theloopny.com
    pek

  14. Feb 22, 2010
    Jennifer Deseo said...

    Good point. If one can financially manage to work for oneself, then DO IT! DO IT! DO IT!

Share your ideas