I don't believe cold fusion or hyper local

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I don't believe cold fusion or hyper local

Call me a skeptic but I'm just not sold on the whole hyper local thing. When I was on the VC side of things I got to look pretty close at a few companies both on the news and the ad side of things.

The problem for me is scale. It's just not there. I'm not saying you can't have hyper local journalism. I just don't think you can build a business off of it.

From MediaShift:

Can Allvoices Succeed as Citizen Journalism Platform?

"With Examiner.com recently buying outcitizen media site NowPublic for a reported $25 million, the attention turned to similar independent sites such as Allvoices. Would it now become buyout fodder for a mainstream media company, or would it suffer the fate of so many citizen journalism sites that came before it, shutting down before finding a successful business model?"

http://feedproxy.google.com/~r/pbs/mediashift-blog/~3/Zstk3-WjhEo/can-allvoices-succeed-as-citizen-journalism-platform253.html

Sent from my brain telepathically with the help of my phone.

Tags » Trends business

11 September 2009
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over 2 years ago Micheal Foley responded:

Hyperlocal has scaling limits built right in.

By saying that you'll cover this area and not any areas outside it, you've just put a ceiling on your potential business.

I disagree with you about not being able to make a business out of hyperlocal. You just have to go in knowing that it's always going to be a very small business and that anyone can directly compete with you at any time.

over 2 years ago Tac Anderson responded:

Let me adjust my statement: hyper local reporting monetized via
advertising will never be a sustainable business. People could build
side projects that bring in some revenue but by the fact that its a
side project no real reporting would be possible.

Even these "platform" sites that provide local bloggers free hosting
andtheir own corner are not profitable for the reporter, only for the
platform.

I think the exeption are local (or regional) niche sites with
national, global or even industry interest. TechFlash is a great
example of this. They only cover Seattle area tech but that has global
and industry industry thanksto Amazon, MSFT and the vibrant startup
community.

-sent via my mobile handheld phone-

over 2 years ago Michele Smorgon liked this post.

over 2 years ago Christopher Mims responded:

"Hyper local reporting monetized via advertising will never be a sustainable business." Really? West Seattle Blog is not a sustainable business? Here's their business model in a nutshell: 1 reporter, 1 sales person. Easy. http://westseattleblog.com/blog/?page_id=1246

over 2 years ago Tac Anderson responded:

Chris, thanks for the comment and link.
A couple of thoughts (& I do enjoy being proven wrong on stuff like
this): 2 years isn't what I'd call sustained yet, and by their own
account I wouldn't call it even independently profitable yet:
"How do you people make money off this thing?
For a long time, we didn’t. In late August 2007, we decided to try a
Pledge Day to see if anybody out there wanted to help chip in for our
operating expenses. The response was very gratifying, and we used the
proceeds to improve what we have to offer you, including purchase of a
video camera (which we have used since its 9/11/07 delivery to offer
you video starting with the Alki Statue of Liberty unveiling that same
day). We’re still accepting contributions through our PayPal account
(you don’t have to be a PayPal member — you can use credit cards too).
We also used Pledge Day donations to secure the proper paperwork to
turn this into a business, and as of November 2007, we started running
ads."

All that being said, will there be exceptions to my bold proclimation?
I sure hope so. Efforts like WSB fill a valuable space left be
traditional journalism. But at this point I'd classify WSB as a
community supported public service.

over 2 years ago Micheal Foley responded:

How much money do you have to make before you consider it "independently profitable"?

over 2 years ago Tac Anderson responded:

When they're not asking for donations, but are earning enough revenue to support the company and pay themselves. Many small businesses aren't long term profitable because their business may be self sustaining but the owners aren't actually able to pay themselves. Their website makes it sound like they're still reliant on donations and ad revenue isn't enough (which was the whole point of my post.)

over 2 years ago Christopher Mims responded:

If you read their page on rejurno.com, you'll see that their rate card is super low, and that they have to do a lot of advertiser hand-holding - both of which are required by the newness of the proposition they're bringing to local businesses. (They're even having to put together ads for those businesses b/c they don't have creative that's ready for the web.)

http://rejurno.com/case-studies/westseattleblogcom/

What that tells me is that they could be sustainable after: 1) a few years, once the locals are used to them or 2) once print is dead enough to force advertisers to fully migrate to the web, pushing up ad rates. I've said it before and I'll say it again: the main reason we don't know what will come after print is that print isn't dead yet. As long as online is duplicating the functions of relatively OK print publications (i.e. the regional newspapers from which West Seattle Blog derived their rate card) it's not going to be able to compete.

We're in a transitional time now, where there isn't enough money in print ads to sustain aging newspapers, and not enough of it has migrated to the web yet to sustain those outlets either, despite their much lower costs. Inevitably, this will change.

When the first major city loses its last major daily - that's when we'll see viable online alternatives.

over 2 years ago Christopher Mims responded:

But here's the real point: local media online is going to look a lot like local media in print -- quirky, functional only to the extent that it's laser-focused on its immediate region, and therefore resistant to being successfully rolled up by giant conglomerates or large aggregating websites. And it will always have relatively thin margins.

So will you ever want to invest in it? No, probably not - you might as well throw your passion behind a one-off corner coffee shop: it's about the same business model.

over 2 years ago Tac Anderson responded:

yep

/tacanderson

I don't believe cold fusion or hyper local

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