The Neighborhood Watch

Why do community news sites, once hailed as the future of journalism, so often flop?

Things are looking up for Patch. In 2012, unique visitors jumped 47 percent to 14 million YOY. Brod adds that Patch has more than doubled its annual revenue, and while it hasn’t publicized the fact, it now boasts more than 100 profitable markets. Brod projects run-rate profitability for Patch as a whole late this year. Meanwhile, its technology and newsgathering strategy continue to be tweaked, with user interface changes and new processes for divvying up content duties now happening in five Long Island towns.

Likewise, Fisher Communications is redesigning the look and feel of its local sites so they are more integrated with the online destinations of its stations. The company is also switching to a so-called “social local” approach, emphasizing social networking elements. While the hyperlocal operation’s head count of seven employees has not changed since launch, the content they cover has. “Some people still write geography-based stories, but we’re much more focused on social local,” explains Jenny Kuglin, general manager of Fisher Interactive Network. Topics now range from arts and entertainment to crime.

The company continues to rely on Datasphere for sales to small and medium-sized businesses, but its own, larger sales force also goes after new accounts, says Randa Minkarah, Fisher’s svp, revenue and business development, who has beefed up her sales team and created more advertorial content for clients.

The changes at Datasphere coincide with those of Fisher and seem influenced by its corporate cousin’s revenue declines as well as challenges in other clients’ hyperlocal ventures. “The cost of content is expensive, so to the extent that you can reduce that component and still achieve a similar kind of revenue base, it’s a benefit,” Datasphere’s Cowan says. Among Datasphere’s latest tactics: selling promotional tie-ins with local events and investing heavily in local coupons.

Belo is in the process of rolling out Datasphere’s hyperlocal Web services to all markets where it owns TV stations, according to Cowan. Joe Weir, Belo’s vp of digital, stresses that his company will not employ an intensive hyperlocal approach but, rather, tailor each local news site around its DMA.

A natural environment for hyperlocal may be Seattle, made up of highly distinctive neighborhoods populated with bloggers hungry for alliances—and sites such as Inside Bainbridge. For other cities, hyperlocal doesn’t make much sense. Nexstar Communications, for example, operates nearly 40 TV stations in midsized markets where it has determined that sites focused not on community news but, rather, passions like local college teams are more viable, according to Marc Montoya, svp of e-media sales and operations.

Others are waiting to see whether hyperlocal will, in fact, prove to be the future—or a noble but ultimately unsustainable experiment.

Catherine Badalamente, vp of digital media at Post-Newsweek Stations, remains hopeful. “If we’re going to have any long-term future in the news business, it has to be part of what we’re looking for,” she says of community news sites. “It’s going to be what differentiates us in the long run.”

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