Hyperlocal 101: Part One, 10 hyperlocal business models

Hyperlocal is just a way of expressing the need for news that is more local, closer to the neighborhood or town level, than the metro daily ever could be. And of course it corresponds to a class of advertiser that was priced out of and ill served by the metro daily and TV stations.

Jay Rosen, Professor of Journalism, New York University

Hyperlocal media is a nascent sector which is developing quickly.  It is a diverse industry which predominantly falls into three distinctive camps:

  1. Those run by citizens, often (but not always) as not for profit efforts
  2. Smaller commercial efforts – often covering one site or a very small number of sites, and;
  3. Those belonging to wider media groups and which often have national footprints – or aspirations to provide a national footprint

Because this is a new and emerging sector, there is no playbook. Previously accepted rules often don’t apply and the absence of a long heritage – or proven recipe for success – has resulted in many different hyper-local models being on offer.

In future months weeks I’ll write more about different production models and different types of Hyperlocal and community media, but in the first instance I wanted to focus on some examples of different business models being deployed by different organisations operating in the hyperlocal space. Not all of these have been successful (Postcode Gazette has closed and Will Perrin tweeted me to highlight the closure of Rightmove Places) but the aim of these slides is to show some of the models which have been tried and tested.

The slides below offer some clues to the myriad of ways in which different hyperlocal publishers have sought (and are seeking) to make hyperlocal media pay.  Without doubt the single biggest challenge for anyone working in the hyper-local space is financial sustainability. To date, few people or organisations have managed to make hyper-local profitable. For those who have, scalability it has yet to be scalable. For smaller outlets, scalability may not be a problem, but for larger media organisations it frequently remains a key consideration and the reason why many of them have pulled the plug on their hyperlocal efforts over the years.

Although larger operations have sales houses and teams behind them, many smaller efforts undertake sales activity along with newsgathering, publishing and social media engagement. It can be a heady mix. As J-Lab’s Jan Schaffer wrote in her Ten Steps For Any News Startup:

Remember that you are not just a journalist any longer. You’re a marketer, publisher and business leader. Above all, stay focused, but be ready to change on a dime. As a local news entrepreneur, you will need to evolve and evolve. Make the surprises work for you.

This list probably doesn’t contain any surprises, but it does give an indication of some of the different income streams being tapped into across the industry.

Arguably the most financially successful hyper-local operations can often be seen to enjoy a mixed funding model. Many of them (sites like London SE1, Wrexham.com, the Caerphilly Observer or  alderleyedge.com)  use a combination of the income types outlined here. They do not rely on a single source of income – be that advertising, sponsorship, grants or training monies – although often one of these sources can often dominate an outlet’s income stream.

What other business models and income streams have you seen working – or you have successfully deployed yourself?

NB: Most of the examples in these slides come from the UK, although I’ve included a few ideas from North America too (if you want to read more about US examples then I’d recommend the Knight Foundation’s 2011report “Getting Local: How Nonprofit News Ventures Seek Sustainability”.)

One response to “Hyperlocal 101: Part One, 10 hyperlocal business models

  1. I run a network of hyperlocal sites for Texas and Oklahoma lake vacation areas such as http://LakeTexoma.com and http://GrandLake.com. Our revenue is currently all advertising but from multiple sources – real estate listings, vacation rental listings, fishing/hunting guide listings, display ads, etc.. So far it seems to work well enough to pay the bills but we keep the overhead extremely low. Soon we’ll be testing some product sales to find new revenue sources.

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