There have been plenty of excellent pieces written about what is happening to newspapers right now. Clay Shirky says that there is no panacea, that “nothing will work, but everything might” and Steven Johnson, founder and executive chair of Outside.in, explained in a speech that to understand what is going to happen to the news industry going forward, we need only look at what has happened in the past to other content verticals.
So now what? It’s time to start getting into details about what newspapers and local media companies need to know. How do they reduce cost, grow revenue and produce a competitive and compelling editorial product?
We think there is an opportunity for a new model for news, one that provides as much value to the traditional local publisher as it does to local bloggers and news consumers.
We propose that this new model be built upon three basic pillars:
Readers are looking elsewhere for national news, sports, finance and entertainment news. In order to differentiate and compete for readers, local media companies need to get “more local” or hyperlocal. They need to answer the question: “What’s happening right around me right now?”
However, the current business model and editorial cost structure don’t allow them to hire reporters to cover every neighbourhood.
At the same time there is an explosion of hyperlocal content being created right now. Professional and amateur bloggers, local reviews, municipal data. Today there are hundreds or thousands of “stringers” in every market that are craving more traffic and more revenue.
This creates an opportunity.
That opportunity centres on Aggregation. Dynamically sourcing every single local piece of content and organising by discrete neighborhoods — or even specific addresses — gives the kind of targeted and timely local coverage that print newspapers never dreamed of attempting.
But every publisher has a different editorial voice and a different audience. And the quality of the content in this new model varies much more dramatically than traditional editorial content coming out of a newsroom. How do you make sure you are featuring only the content you want and not sources or posts that don’t fit your editorial vision?
That’s where Curation comes in — being able to sit at a dashboard and pick and chose, highlight and suppress — make editorial decisions on top of a massive aggregated data set.
Historically, editors make curatorial decisions about their own internal content — which stories to assign, what to feature on page one. Going forward, those types of curatorial decisions will be made on other people’s content as well.
Jeff Jarvis says to “cover what you do best and link to the rest” and the new model for news will involve lots of linking to other sources — but there will be editorial choices involved in that linking. The whole point of curation is to link to the best of the rest.
But how do you solve the revenue and inventory challenges these companies face? One way is to build Networks. Local sales efforts are done best by local sales teams. Period.
Local inventory is becoming a commodity because the national ad networks have massive volume and can sell at lower rates, effectively driving prices down.
Local sales teams have the best relationships and the greatest opportunity to create solutions for their advertisers, if they only had the inventory that ad networks have. Local papers will be able to offer geo-targeted ads — down to individual neighborhoods or smaller — that will be uniquely appealing to those local businesses.
So, newspapers need to become the network. They need to partner with the blogs and hyperlocal media properties in your market and represent their inventory. This will allow newspapers to compete for sizable budgets in their markets and leverage their longstanding relationships with local merchants that the big networks don’t have.
Sure, there will be different margins because revenue needs to be shared with the bloggers, but today’s ad networks are big, growing and profitable. Local newspapers should be too.
We think there’s an opportunity for a virtuous circle where publishers connect with local bloggers: supplying the publishers with hyperlocal content and ad inventory, and the bloggers with traffic and revenue. Make no mistake, if a new model is going to be successful it needs to be a two-way street.
But now is the time to act. The one bit of good news in all this current carnage is that the online market for local advertising is in its infancy. The general consensus among analysts is that the local online ad market in five years is going to be somewhere in the vicinity of $10 billion.
With their reputation for editorial quality, their targeting capabilities, their sales relationships with local businesses, and their increased reach through building local ad networks, newspapers should be well-positioned to capture a large share of that local advertising as it comes online. The model will change, of course: CPMs may be likely be lower, but the cost of creating and distributing content will be lower too, and the audience reach will be much higher than it was in the days of print.
Given the all the new voices and data streams emerging in the local space, and given the new possibilities of organising and distributing that content, we think that in a few years — once the advertising market matures — we’ll look around and realise we are living in a golden age of local news coverage, one that is far more timely, comprehensive, and relevant than it was in the heyday of the print paper. So let’s get to work building that future!
Mark Josephson is CEO of Outside.in, a “hyperlocal” news and information aggregation startup based in New York.