Can Localized Online News Make A Profit?
Paul Baron, Hometowntimes.com's CEO asks, "In a crowded market of players from local print newspapers (if they haven't yet failed due to rising costs and reduced value to readers) to community magazines, to online local versions of the newspapers, etc., is there really room for a Hometowntimes.com community site? And how can it be profitable to the publisher/owner?"
Jeff Jarvis, author of What Would Google Do?, blogs about media and news at Buzzmachine.com and writes the new media column in the Guardian. He is currently director of interactive journalism at the City University of New York Graduate School of Journalism.
CUNY professor Jeff Jarvis has a few ideas for how to replace the local newspaper with new business models for news at the hyperlocal level. And offers the following spreadsheet as a point of reference, which is applicable to the Hometowntimes.com business model.
For a large local blog, that could translate into total revenues of $126,976 in Year 1, going to $331,640 in Year 2, with corresponding income for the blogger of $42,777 in the first year, going to $148, 269 in the third (see table below).
What's interesting about Mr. Jarvis' discussion and model, is that, like Hometowntimes.com, he suggests that a successful business model will leverage multiple sites and advertising and audience from a larger market derived from independent, smaller sites (he uses "blogs" in his description.) One major value propostion of the Hometowntimes.com network is its nationwide presence, today in 524 city sites and metro markets, whereby local site owners benefit from national advertising that would otherwise not be available to a small blog or community online news site.
Jeff Jarvis writes, "Each hyperlocal site would remain independent but join a loose federation for ad sales, distribution, and shared costs. Jarvis sketches out what a new news organization might look like at the local level, and goes out on a limb by offering actual spreadsheets showing some assumptions about audience size and how the business model would work.
[Note: any projected numbers by Mr. Jarvis, who is not associated with Hometowntimes.com, do not reflect any actual results or performance numbers that a Hometowntimes.com franchisee might achieve or expect - those revenue and expense figures will be higher or lower, depending on market demographics, business expertise, marketing, active participation of owners vs outsourcing sales and editing functions, more -- prospective site owners must request and review the Hometowntimes.com Franchise Disclosure Document and, like any business or investment, seek counsel of accountants and/or attorney before making any investment.]