Oct 5, 2009

Little news

Newsweek chronicles the "hyperlocal" movement's attempts to gain a foothold in three New Jersey suburbs. It appears that even though the business model has yet to pay off that the homegrown efforts started by local journalists already are being supplanted by sites owned by national media giants - the New York Times, AOL and MSNBC among them. Why would the majors want to play in the minor leagues? From Newsweek
[I]f an operation like AOL's Patch can link together a network of $200,000-a-year sites each run by a single reporter, and then amortize big expenses (like technology and ad sales) across multiple sites, you could start to see decent profits. The low overhead is crucial: not only are startups like Patch using less costly labor, but they also believe readership and revenue will grow as networks of hyperlocal blogs link to each other, and as they become adept at persuading small businesses that never advertised in newspapers to give online advertising a shot—a key to Patch's strategy.
This model would probably only work in heavily populated suburbs. But it does seem logical that the chain websites would end up chasing revenue from the other types of chains that grow up in suburban landscapes: Starbucks, Ruby Tuesdays, Barnes and Noble, and the like. That, in turn, is likely going to shape how these sites develop.

No comments: