Is ‘Hyper-Local’ a Flawed Model?

Picture 7Claire Miller of the NY Times discusses the recent decision by the Washington Post to close LoudounExtra.com, a “hyper-local” news site. It was to be just one of several properties built by the WashingtonPost in a more ambitious effort that focused on smaller areas throughout its coverage area. According to a short post on the site, LoudounExtra will go from being a stand-alone site to a page within WashingtonPost.com:

Beginning Friday, Loudounextra.com will cease to exist in its current form. Many of the features you’ve come to enjoy and rely on will live on a new page on washingtonpost.com, including local news, your announcements and photos, a community calendar, youth sports and local entertainment information.

We want to be able to serve our Loudoun readers in the best way possible, and we believe we can do that more efficiently on washingtonpost.com. There’s no need to remember a new address; just go to www.loudounextra.com beginning Friday and you will be automatically re-routed to the new page.

And coming soon, a new home page on washingtonpost.com devoted to helping you navigate daily life in the Washington D.C. region, with more robust coverage of local breaking news, sports, traffic, weather, entertainment, shopping, real estate, tips and tools, local opinion, your contributions and more.

My guess is that the economic model didn’t work; costs were high and assumptions about revenues didn’t play out as anticipated. The company hadn’t “calibrated” the costs and the revenues correctly. Miller’s article quotes a Post spokesperson alluding to this:

“We found that our experiment with LoudounExtra.com as a separate site was not a sustainable model,” said Kris Coratti, a spokeswoman for the Washington Post Company.

“Updating the large amount of special features and technologies” on the site, which was run by Post staff members, proved unsustainable, Ms. Coratti said. For now, the newspaper will not start other hyperlocal sites it had planned.

I think there’s clear demand for the local information, though “hyper-local” is clearly not a universal solution to what ails newspapers. Consumers are interested in a mix of local and non-local content and so the reintegration of the content into the broader WashPo site may prove to be successful. For these hyper local projects by publishers the difficult problem to solve involves finding the right balance between professional and community content, together with a cost structure that does make it sustainable.

Why do you think LoudounExtra failed and what do you think it says, if anything, about the broader effort to build out these sites? Do you think “sustainability” simply involves the right  ad sales approach to the local market or is there something inherently wrong with the assumptions behind hyper-local news?

Where are the success stories? American Towns might say that it represents one such success. What are your thoughts?

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Update: I got an email this morning from someone who pointed to the WSJ article written some time ago on LoudounExtra has a more accurate account of what caused the demise of the site and strategy, including a series of poor decisions and missteps. The email also said that the Chicago Tribune’s TribLocal site is doing very well and “expanding like crazy.” The writer took issue with my “top of mind” example of AmericanTowns as an example of a hyper-local success.

I would add that hyper-local implies community involvement at a fundamental level. It also implies a more “utilitarian” approach with tools that help people accomplish tasks of one sort or another (e.g., where to go, who to do business with, etc.).

Update 2: The story of why LoudounExtra went down seems to be more about in-fighting, internal politics and incompetence rather than a flawed concept or model re hyper-local.

6 Responses to “Is ‘Hyper-Local’ a Flawed Model?”

  1. marcelo antelo Says:

    IMHO, not talking only about the US market but about the hyper-local market as a whole thing, I run a hyper-local web site since 1996, I have passed from everything from sales force knocking on advertisers doors, to contact via web, to email mkt, you name it and what I’ve found is that is only possible if you can monetize operations in a guerrilla way, mixing several different strategies, since it’s almost impossible, for more graphics and statistics you can have, to sell to the local bussiness.

    It looks that, even after all those years, the local market still relies on YP or NewsPapers or free classified or folders to marketize and they pretty not interested in put any money on the internet, the ads seller should be a extra one and this costs more money!

    The WP is a very big Co, with a lot of operational expenses that the real small hyper-local sites should not have, and a WP web site for more well designed, good content and gadgets it provides will never beat a real SB, local created web site flavor.

    Costs (operation scale), monetization ways and real local flavor are my keywords!

  2. Mark Josephson Says:

    Hyperlocal is not a flawed model. Staffing a hyperlocal site with the cost and overhead of a traditional media biz is a flawed model.

    We’ve written about it here (http://bit.ly/9gbWB), here (http://bit.ly/bXg4n) and here (http://bit.ly/7Ogh0). The new model needs to rely heavily on an ecosystem — there are those with traffic and sales people and those cranking out great local content but don’t have enough traffic or revenue.

    In the middle there needs to be a platform that aggregates and organizes it all. Well, at least that’s what we think!

    There is still the assumption that the new model has to look like the old model.

    It doesn’t and it won’t.

  3. WikiCity Says:

    Greg,

    Interesting development w/LoudounExtra. As a hyperlocal guy, it is unfortunate to see a site partnered with such a strong player (WP) go down. Regardless though, I think you were spot-on w/your comment “consumers are interested in a mix of local and non-local content”.

    Hyperlocal publishers will soon realize that a hybrid approach is easiest for the reader & thus ideal. Fortunately for hyperlocal darlings Patch, Everyblock, and the like – adding the non-local content is the easiest part.

    Pat
    http://www.WikiCity.com

  4. HyperLocal News Sites 2009/08/19 | Local Business Online - Smart Tips Says:

    […] Greg Sterling asks whether the ‘Hyper-Local’ News Site is a Flawed Model. […]

  5. » Heresy du jour #1: There are no trends in start-ups Mike Orren Says:

    […] In the market space in which I presumably operate, there were great examples at both ends of the spectrum last week. My pals at Everyblock sold their company to MSNBC, and instantly, Hyperlocal is a Business Now. Seemingly moments later, the Washington Post shuttered its “hyperlocal” site for Loudon County, VA — and voila, Hyperlocal is Dead. My friend, Greg Sterling, quickly saw the fallacies flying. […]

  6. Serra Blog » Blog Archive » If you’re local for a trend in hyperlocal news, keep looking Says:

    […] In the market space in which I presumably operate, there were great examples at both ends of the spectrum last week. My pals at Everyblock sold their company to MSNBC, and instantly, Hyperlocal is a Business Now. Seemingly moments later, the Washington Post shuttered its “hyperlocal” site for Loudon County, VA — and voila, Hyperlocal is Dead. My friend, Greg Sterling, quickly saw the fallacies flying. […]

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