Old-school journalism. Experimenting with profit models. Knowing your readers.
That’s some advice from three of the most successful entrepreneurs in the hyperlocal news space, bantering about the future at the Street Fight Summit conference in New York City. The panel included Zohar Yardeni, CEO of Daily Voice, Josh Fenton, co-founder of GoLocal24, and Leela de Kretser, publisher of DNAinfo.com.
Of the three, DNAinfo may be the one best-known outside its coverage areas for poaching top journalism talent in 2012 as it expanded to Chicago. The outfit, backed by TD Ameritrade founder Joe Ricketts, has made breaking scoops a mainstay of its business plan. De Kretser, the company’s top editorial exec, told an audience Tuesday that hyperlocal journalism definitely has a place in the news ecosystem, but making the money that keeps it going is not a foregone conclusion.
“We have to test and use revenue models without blowing up our business,” said Leela de Kretser. Blowing up the business means turning off the local readers that form the firm’s marketing pitch to advertisers. “You’ve got to get the local flavor. Setting up a news site—if you do not know how the city works, it’s going to be a disaster,” she said, perhaps taking an implicit swipe at AOL’s nationwide network of Patch sites that have come under fire for a cookie cutter approach.
For Josh Fenton, whose GoLocal24 now covers Providence, Rhode Island and Worcester, Mass., the model is shoe-leather reporting and partnerships with legacy media made possible by his low fixed costs relative to the older outlets.
“People want old school enterprise journalism,” said Fenton. He pointed to a recent story on hospital rankings that garnered a million page views.
De Kretser agreed: “Investigative journalism is cheaper than it’s ever been…thanks to data.” But the real advantage, she added, is a community focus and having reporters who are connected to the place they cover. “You’ve got to have good people who cover the neighborhood really well,” said de Kretser.
If these prescriptions—great journalism, local focus, sustainable profits—sounded a little vague, it’s not a new thing. Back in 2007, as the hyperlocal craze was gearing up, American Journalism Review’s Paul Farhi noted that “Many operators don’t really have a business model. The first wave of hyperlocal sites has featured seat-of-the-pants operations, staffed part-time by dedicated volunteers, community activists and impassioned gadflies.” He cited a J-lab survey of 141 hyperlocal operators and fully half said they didn’t need revenue to operate. Only 10 percent were breaking even.
Profitability may still be elusive, but the focus on making money as a way to support journalism certainly isn’t as scarce anymore.
Fenton explained that the GoLocal brand partners with other media outlets, often his ostensible competition from the old media of broadcast and print, to provide content streams.
Yardeni’s Daily Voice seeks the magic of scalability—economies of scale—with a network of local news sites stretching across New York, Connecticut and Massachusetts and locally based contributors. Traffic is growing, with over 500,000 pageviews a month. “We’re not profitable, but we’re on our way there,” Yardeni said.
Correction: Due to an editing error, de Kretser’s discussion about experimenting with revenue models was amended to reflect that she was talking about hyperlocal in general, not DNAinfo in particular.
