Thursday, October 27, 2005
LOCAL: CNN Money profiles Village Soup and other "hyper-local" news sites
URL: http://money.cnn.com/2005/10/27/smbusiness/local_newssites/
Entrepreneurs start Web-based, highly local news sites. Can they compete with the local paper?
October 27, 2005: 10:42 AM EDT
By Steve Hargreaves, CNN/Money staff writer
NEW YORK (CNN/Money) - They're only online, produced on the cheap and aim to replace your local paper as your primary source for neighborhood news.
Content ranges from professionally produced news stories, arts and entertainment listings and columns to classified ads and local restaurant menus.
Not a blog and not merely the Web site of an existing newspaper, these start-up local news sites, sometimes called "hyper-local" sites, are attempting to crack what their founder's see as an untapped market.
"People appreciate having real-time information," said Gordon Joseloff, a former foreign correspondent for United Press International and CBS News who two years ago started the online-only news site WestportNow, covering Westport, Conn.
"It's a ripe field," he said.
In many small towns or neighborhoods the local paper comes out once a week. In addition, as smaller media outlets are gobbled up by larger conglomerates, local news is sometimes replaced with more generic fare.
Enter the local news Web site, where cheap publishing software, no distribution overhead and, in some cases, the use of "citizen-journalists" allows daily updates for very little cost.
Surfing in Maine
It's not just weekly papers that some of these sites are going after.
"With the Internet I now have the ability to scoop the daily," said Chirs Busby, who recently launched the online alternative news site the Bollard (www.thebollard.com) in Portland, Maine. "For me, that's a big thrill."
Busby, who used to edit a now-defunct local print alternative weekly, started the Bollard with $3,000 in cash.
The site has a section of local news, mostly written by Busby himself, columns from other writers, comics, movie and food reviews, and nightlife listings.
As far as online news sites go, the Bollard is a bit costlier than some. Busby says he's planing on a budget of roughly $2,300 a week, mostly to pay freelancers, himself and two designers. Like most online news site publishers, he'll also
handle the advertising side by approaching businesses door to door.
But he and the designers are currently working for free; Busby figures he needs 3 million page views a month to woo advertisers -- the goal is for $4,000 a week in revenue.
Busby has big hopes for his site but they are grounded in the numbers of another Maine online news site, Village Soup.
Founded in 1998 by Derek Anderson and his father, Richard, Village Soup (www.villagesoup.com) covers two counties in Mid-Coast Maine with a combined population of around 60,000 people.
The site now has a full time staff of 36, including separate editorial and advertising departments.
The father/son duo have dropped big money into the site, some $5 million so far, but their investment is finally starting to pay off. This year they are expecting to turn a profit of $100,000 on revenue of $1.9 million.
"People have thought the World Wide Web is a great place to find out about news from the other side of the country," said the younger Anderson. "But it's a great way to find out what's in your community."
Gone digital in Brooklyn
Other sites are done on more of a budget.
Steve McFarland, a recent journalism school graduate, started B61 Productions (www.b61productions.com) about 4 months ago covering the Red Hook section of Brooklyn, a poor but gentrifying part of town that's facing a number of development
issues.
The site, named for a local bus line, has yet to see a dime in ad revenue (McFarland has since taken another day job and doesn't update the site as frequently as before), but costs are low.
While the number of page views McFarland gets is modest, just 30,000 to 60,000 a month, he's undeterred.
"I had to turn off the logic part of my brain in order to jump in," he said, citing a local population of just 11,000 as an obstacle. "But the population will increase, and the population moving to the neighborhood now is the low-hanging
fruit."
Outlook
Joseloff's WestportNow (www.westportnow.com) may be the best of both worlds.
The site, which has many of the same sections as a local paper including news, classifieds, arts, business and letters to the editor, generates 125,000 page views a month for what Joseloff says is very little cost (he started the site for $200
using blogging software), costs which are more than offset by ad sales.
He uses up to 60 volunteer "citizen journalists" -- those having no formal training or experience in the business -- to help gather stories, which he then edits.
He says that he hasn't had much time to develop the site, but he has taken out domain names for surrounding towns and thinks that if he delved into building the business full-time he could generate between $100,000 and $200,000 a year in
revenue.
"It stared as a community service," Joseloff says. "But I do see it as a viable business model." It won't be easy.
"I think we'll see more of these niche news sources, but I don't see them being big money makers," said Chris Charron, a vice president at Forrester Research. "They serve more of a social purpose rather than a business purpose."
But Steve Klein, coordinator of the Electronic Journalism Program at George Mason University and a former editor at USA Today, says these sites could "absolutely" compete with local papers, especially if they become credible in the eyes of
readers. "If they gain a certain level of traffic and build a good model, they can be economically viable."
And while mainstream papers say they aren't loosing much ad revenue to online-only sources yet, the sites haven't not gone unnoticed.
"All of this activity has been really hot for the past 12-18 months," said Rob Runette, director of electronic media communications for the Newspaper Association of America.
Runette says traditional newspapers are learning from their online cousins and tailoring their sites accordingly. "We've seen the numbers, we've seen the usage. We're watching all the developments with digital media very carefully."
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