Hyperlocal News Needs Social Networking

I’ve argued for some time that hyperlocal news is the future of newspapers and today’s article in the NYT points out several ventures that are trying out this model. These startups, however, don’t really utilize social networking, and they are missing out on something big. I think that is because they are thinking of social networking as Facebook or MySpace, which is very self-oriented. The kind of social networking that will work in hyperlocal news, however, is the old-fashion “community” features that were popular in the early days of the Internet. Well-organized forums and discussion boards are key elements.

Hyperlocal newspapers need to highly engage their readers primarly for three reasons. 1) Readers can provide content. 2) Readers create market, and 3) Readers attract readers.

№1 is pretty simple. In an environment where a newspaper is run by one or two editors (who should have very strong editorial standards and good journalistic skills) there is always a need for citizen reporters. If there is a fire, your best bet is that the people in the building, people across from the building, and people on the street are going to provide the fastest news. A Twitter-like “breaking news” feed can be added to the site; even if some people put up wrong information, the turnover of the content will be so fast that it won’t really matter that much. Citizen reporters can also be a good source in providing community events news.

№2 is interesting in that it brings back the old cash cow of legacy newspapers. Although ads can help with revenue, there is nothing like the old-fashioned classified that can build profits through microtransactions. Although there are sites such as Craigslist or Monster, there is a limit to what they can do for a hyperlocal community. Allowing people to post classifieds for a small fee (but allowing people to view it for free) is a way to get more traffic to the site and bring in some money. Hyperlocal newspapers can also charge for featured obits, marriages, or other corporate/family PR.

№3 is a no-brainer. Hyperlocal news is bound to attract discussion, and it is the discussion that will keep readers coming back. The important thing is that the commenting tools should be more sophisticated. Most commenting tools now are linear, but they should be arranged in a way that give them hierarchy, because sometimes you want to comment on a comment instead of on the original article. Because there is a slight learning curve for people who do not use the Internet, the Knight Foundation should not be funding individual newspaper projects. Rather, it should be using that money to create an easy-t0-use site builder and educate journalists how to utilize this business model.

Using social networking tools to get readers involved is extremely important, because at the end of the day, they will be the ones paying for the newspaper. Let’s look at the figures:

Let’s say that the population of a smallish city (or group of small cities) is about 20,000. The adult population is about 12,000, and there are 5,000 active readers of this site.

In this scenario, advertisements will only be able to cover web-hosting. Even if the site becomes hugely popular, web hosting will be under 400 a month. So let’s say it costs 5,000 a year. Four or five “banner-type” ads, along with google adsense, will probably just be enough to cover the server maintenance costs, at least in the beginning until the site starts to get lots of ads. (I’m presenting a somewhat pessimistic ad scenario)

So in order to support two full-time editors, you need 90,000- 120,000 a year. (Let’s remember that journalism was never a lucrative job in terms of financial benefits) With 100 classifieds/mo at $1, that brings in 1200. The obit/wedding news/ corporate PR section will probably generate 600–1500 a year. Then, let’s say you do one of the sponsored event-type things that I mention in my previous post. For a $10 ticket, let’s say 200 people come. Still only $2000.

However, if you can get a third of the adult population to “donate” $10 to the site once a year (like they would for a newspaper subscription) that amounts to 40,000. When it becomes more local and engaging, people will be willing to pay $10-$20 a year for their local paper and that is what will pay for the salaries of the two staff members.

This is certainly not a cash cow, but it can work.