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Hyperlocal news sites still trying to cash in

9 months, 2 weeks ago From chicagobusiness.com

From From chicagobusiness.com:

Hyperlocal news coverage on the Web has been touted as conventional journalism's best hope in the digital era. One big problem: No one has figured out how to make money from it.

In metro Chicago, the suburban Patch network has shrunk to a sixth of its former size to stem losses. Startup news organization DNAInfo Chicago has been pumping out neighborhood coverage on its website since 2012, while losing millions of dollars. And EveryBlock isn't even trying to make money.

No matter how compelling the news next door is, readers don't want to pay for it and local businesses—the universally hoped-for sponsors of local content—can't afford to advertise, or they pay so little that sales reps can't earn a living. As a result, when the starry-eyed backers of hyperlocal ventures get a grip on the mounting labor and overhead expenses, the experiments often end badly.

“There's a lot of hunger for it, but finding enough consumer eyes and ears to pay for it is still a challenge,” says Thom Clark, who until recently led the Community Media Workshop in Chicago, a nonprofit affiliated with Columbia College Chicago.

AOL Inc. made the biggest bet on hyperlocal news, investing more than $100 million to build its Patch network; some 65 of its 200-plus reporters and editors covered suburban Chicago. The thinking went that their reports on village board meetings, high school sports and local crime would draw readers, who, in turn, would attract restaurants and shops too small to advertise in a metro newspaper. Today Patch is down to a dozen employees in suburban Chicago under its new owner, turnaround shop Hale Global of New York.

“The problem of hyperlocal always gets back to the cost-of-sale for local advertising,” Hale Global CEO Charles Hale told online magazine Street Fight last month. “It just costs a lot more to go door-to-door selling ads to small businesses than it does to sell regionally or nationally.”

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