10 July 2007

Hyperlocal Ghost Towns

The U.S.-based site backfence.com, heralded as a virtual town square for communities too small for local media to bother with, is shutting down two years after its launch after burning through its $3 million in venture capital.

American Journalism Review suggests that as mainstream media become more savvy about, and interested in, hyperlocal content, independent businesses are becoming harder to sustain. Only a few claim to show a profit; the overwhelming majority of an estimated 500 such sites lose money, according to a survey by J-Lab: The Institute for Interactive Journalism.

Perhaps the hottest hyperlocal site in America today, Baristanet.com, is a snarky local-news-and-commentary offering that covers two upscale New York suburbs. It attracts about 80,000 unique visitors a month, as well as local advertisers. But even this success reportedly translated to only about $60,000 (£30,000) in revenue last year.

In the meantime, very large media companies -- including Gannett, the Washington Post Company, and the Tribune company -- are offering their own hyperlocal content, in print and/or online.

‘What we're struggling with, and every major paper is struggling with, is how to reach our audience on a granular level, in a way we've never reached them before,’ says the editor in charge of the Post’s hyperlocal efforts in suburban Loudoun. ‘No one thing is going to change [the newspaper industry's] future. But a lot of things might. That's why we have to do this, even if we can't say for certain what kind of business success we might have. It's part of our mission. It has to be part of our mission in serving our readers and our communities.’

The full AJR article is available online at www.ajr.org/Article.asp?id=4343

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