Local takes center stage
Posted: November 19th, 2009 | Author: Serra Media | Filed under: Location is everything | 8 Comments »Local news, advertising and commerce took center stage at the MIT Enterprise Forum dinner last night in Bellevue. While it was one of many subjects discussed, local (and “hyperlocal” and “microlocal”) strategies and opportunities were given the most attention by the speakers at a dinner called “Breaking News: How will the pieces be put back together again?”
The highlight for me was seeing the founder and editor of West Seattle Blog, Tracy Record, positioned on stage next to MSNBC.com president Charlie Tillinghast. Two years ago, who would have believed that a neighborhood news site would warrant the same consideration as one of the giants in the online news world. (And the event planners did plenty of due diligence in finding and screening speakers, interviewing more than 20 people – including me – to fill four spots.)
The conversation was mostly entertaining and occasionally informative for someone who follows the disruption of news media by technology, but probably more informative to the general audience. Todd Bishop of TechFlash did a masterful job moderating, keeping the conversation flowing while challenging the panelists with more than just softball questions. The most interesting points included:
- Patricia Lee Smith of the Seattle Times repeating time and again that she didn’t have an audience problem, just a revenue problem, and that she needed technology to solve it. She rattled off a host of statistics to illustrate how viable print remains as a medium for advertisers (including the U.S. pre-print business is nearly $6.7 billion a year and up 30% and accounts for 90% of coupons redeemed in-market.)
- Tillinghast reported that MSNBC.com had a record revenue year and profits missed projections by only 1%. “We’re making plenty of money,” he said. Which begged the question (that didn’t get asked): how is MSNBC.com monetizing its audience better than seattletimes.com? Is it the strength of a national brand/audience or simply the lack of a legacy business to support?
- Record said her operation continues to grow and is looking to bring on more people to assist in the growth. So, again, revenue apparently isn’t a problem for a hyperlocal operation – if done right. Which is why big companies like Fisher are jumping into the fray, hoping to tap into some of that marketplace, a strategy Smith didn’t think was too promising. “Where’s the money?” she repeatedly asked when queried about hyperlocal opportunities.
- And even though her business is doing fine, Record didn’t think her operation should be attempted at scale by big companies, either. She cited a letter someone forwarded her from a town on the East Coast that’s the location of a new Patch.com site as an example of how a company like AOL (Patch.com’s owner) is missing the point: the letter told the resident that the new Patch editor couldn’t wait to “learn all about your community.” That’s much different than Record’s model, which grew out of already knowing all about the community.
- Bishop asked Tillinghast about the future plans for hyperlocal aggregator Everyblock, a website and team MSNBC.com recently acquired. Contrary to popular assumption, Tillinghast said Everyblock, which was launched with a $1.1 million Knight News Challenge grant, may not be integrated into the flagship MSNBC.com site but rather grown as an independent entity.
Since the audience allegedly included several investors, Bishop joked at the beginning that if the panelists, which also included 1Cast’s Anthony Bontrager, wanted to form a joint venture, they probably wouldn’t get out of the room without at least a little angel money. Mirroring the recent trend with these discussion, there is more optimism than hand-wringing, which is refreshing. After all, as I’ve often said, the news business isn’t dying, it’s just changing.
- Mark Briggs
Hey Mark,
Great recap of the event last Wednesday!
Glad you could attend. It’s funny you mention the unasked question about msnbc.com and the seattle times. I thought the same thing!
I also was hoping someone would have brought up Serra Media when Patricia said she was having a technology problem. In many ways, you guys solve a lot of her supposed problems.
Thanks again,
Jeremy
PS: I was part of the MIT planning team, and we appreciate the kudos … we definitely did our homework.
Hi Mark,
Agreed; Mark Ippolito and his team did an incredible job putting together this event.
Thanks for your reflections on my presentation. I’m glad I got at least one aspect of my point across. However, I’d like to provide the context that I offered at the forum.
My comment about the revenue/readership issue was framed with regard to major metropolitan newspaper websites, not specifically seattletimes.com.
The full context:
- It’s fallacy that newspapers are losing ground because no one reads them any longer. Major metropolitan newspapers do not have a readership problem:
o 70% of people in the US read a newspaper at least once a week (Scarborough)
- Newspapers have a revenue problem:
o In 2000 print newspaper revenue was it was $48.6Billion.
2008 total print and online newspaper revenue was $37.8 Billion dollars
A loss of $11Billion dollars, or 22%. Nearly all of it in print classifieds. (NAA)
- In-depth journalism, the kind that newsrooms such as The Seattle Times provide in “Coaches Who Prey” does not come cheaply. I sincerely doubt any major metropolitan online newspaper is funding a newsroom of this caliber solely through their online operation.
There is little validity in comparing the business models of MSNBC, West Seattle Blog and The Seattle Times. The three properties serve different markets, draw, generally, from a different advertiser bases, and the scale of their operations are entirely different.
Nearly every major metropolitan online newspaper is reporting their total online revenue down compared to 2008. This is because, unlike local blogs and msnbc.com, a significant portion of major metro newspapers’ online revenue comes from the recruitment, automotive, and homes verticals. It should surprise no one that each of the three categories have taken deep hits in the recession. This is not a problem exclusive to online metro newspapers. In October 09 Monster reported a 35% YOY drop in revenue. http://online.wsj.com/article/BT-CO-20091029-711518.html
The remainder of major metro newspaper revenue comes from national and local display. Many of us are indeed seeing growth in local display revenue. But it’s not enough to overcome the temporary, cyclical losses in the other categories. And it alone is not enough to support a newsroom of the caliber of The Seattle Times. At least not today.
My main point in distinguishing readership from revenue: The internet has been around far too long for entrepreneurs to continue to cling to the fallacy that a flood of traffic equates to a viable business plan. Traffic-bloated, low-value websites are feeding fragile advertising models, such as remnant networks riddled with click-fraud. We must build valuable services that support consumers’ intent and effectively connect them with advertisers. This will serve consumers, advertisers and, ideally, it will fund the kind of quality journalism we need to protect.
PLee
Thanks for adding on, Patricia.
The distinctions between the business models of MSNBC.com, West Seattle Blog and The Seattle Times was something I thought the audience at the dinner would have benefited from hearing a more depth on.
In fact, it might have been interesting to play a little role reversal and have you chime in with suggestions on their operations and vice versa. Todd tried to get Charlie to make suggestions about your operation but I don’t remember much substance to his response (because Todd finished the question by asking if he’d shut the presses down.)
- Mark
While not being anywhere near as armed as PLS with business savvy, data, etc., I still find it hard to believe that a flood of traffic cannot lead to enough ad $ to support relatively sizable news organizations.
Online ads are largely suffering from the fact they were undervalued, deliberately, by old media that didn’t foresee the day they would need to rely on that revenue – there was a notable Seattle Channel-recorded dialogue on this, in which one local publisher (I can’t recall the Times participant or stance) acknowledged the fact. Sure, newspapers aren’t going entirely away, but they are going MORE away than their owners want to admit.
So rather than clinging to that revenue and thinking it’ll be there for a long time to come, why not figure out (if this isn’t happening already, and I sure hope it is) how to further educate advertisers that online IS their future, and they need to move their money and messages there?
Education seems extremely important right now. As I commented at the forum, some businesses are mistakenly believing that free social media is the free solution to connecting them with customers – I see businesses fire up Twitter accounts, score a couple dozen followers, and put enormous amounts of time and energy into coming up with daily offers and other messaging seen ultimately by very few (yes, the OCCASIONAL offer will go viral, but there’s so much noise out there now, it’s hard to count on that) while ignoring the fact that mass media large and small could be helping them get those messages out to far more people, for a not-so-exorbitant sum.
As interactive and social-media-interwoven a service as ours is, for example, we are still on a very basic level a form of mass media, and while I believe that non-digital delivery systems are going away faster than most will admit, the reality of media outlets, interactive and otherwise, reaching a large audience, is NOT going away as fast, and that’s what businesses looking to connect with customers need help understanding.
It’s excellent to see this event taking place and, according to Mark, the tone more optimistic. Certainly, audiences for newspaper content are still quite significant. But, the level of engagement with those audiences — a growing factor in advertiser decisions — is a real problem. It’s the reason Tracy’s blog has such Raving Fans – not just readers. As an advertiser, would you rather reach an audience of readers or raving fans?
It’s not a given that the traditional revenue model of newspapers supports in-depth journalism, or is necessary for it. Ben Jones blog on the housing crisis is one example that comes to mind where a zealous blogger/entrepreneur covered the story in impeccable detail, and made it pay, (a little, he says.)
Is that a sustainable model? Not in the sense we usually think about. But perhaps a clue to what can work.
[...] About a month ago, hyperlocal blogging & journalism was the topic of a public forum in the Seattle area. It featured hyperlocal bloggers sitting on stage next to the president of MSNBC.com – amazing how the world of local news is changing, isn’t it? Serra Blog has a good recap of the forum. [...]
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