On Thursday I attributed the failure of The New York Times’ hyperlocal project in New Jersey to a bad business model. Its reliance on unpaid labor meant there was no need to generate revenue, which proved to be its Achilles’ heel when the volunteers and student interns didn’t materialize.
I still think this model sucked, but it wasn’t just a bad business model. It was the wrong business model for that area. Here’s why.
To keep the New Jersey Local running, The Times would have needed a large pool of unpaid student interns. They have that for their New York hyperlocal sites, with more than 480,000 students in the City University system, which includes a J-school and at least two colleges with strong writing programs. CUNY’s J-school already mans the Brooklyn Local, while students from New York University’s journalism program will work the upcoming East Village Local in Manhattan.
The Local didn’t have that in its New Jersey beat, which covered Maplewood, Millburn and South Orange in Essex County. Seton Hall University sits in the middle of South Orange but has an enrollment of only 10,000 students. Nearby Montclair State University has 18,000 students, and the Newark campus of Rutgers University has 11,500 students. There wasn’t enough wiggle room for error or missed partnerships.
The take-home lesson from the New Jersey Local experiment is this: Hyperlocal business models aren’t always about scale. What works in a large market won’t necessarily shrink to fit a small market. Instead, hyperlocalists must put attention into their beats’ microeconomies. If a neighborhood can’t support a news outlet’s business model, then that model needs revision.
For example, my former hyperlocal site’s business model relied on advertising revenue. However, my coverage area was underdeveloped as far as businesses and services go — advertisers didn’t exist, and The Great Recession didn’t help. On the flip side (and contrary to what was happening across the larger region), the neighborhood had plenty of homeowners’ associations unaffected by the mortgage crisis and very active in civic affairs.
My for-profit company spent three years trying to tap blood from the advertising stone. It would have been better off as a nonprofit funded through donations from those homeowners’ associations. Woulda, coulda, shoulda.
Scale does not equal sustainability or solvency. That goes for The New York Times and independent hyperlocal outlets. But an appreciation for what a neighborhood can support will go a long way.
Photo courtesy of Flickr user pillowhead designs.
