American Journalism Review takes a hard look in its June/July issue at whether hyperlocal journalism is a financially sustainable practice. Paul Farhi writes:
Is there a real business in this kind of business? So far–and admittedly it’s still very early –the answer is no. A few of the estimated 500 or so “local-local” news sites claim to show a profit, but the overwhelming majority lose money, according to the first comprehensive survey of the field. The survey, conducted by J-Lab: The Institute for Interactive Journalism (affiliated with the University of Maryland’s Philip Merrill College of Journalism, as is AJR), documents a journalism movement that is simultaneously thriving and highly tenuous.
While national sites will have a difficult time pursuing a Backfence-style model, I still believe newspapers should be aggressively catering their content to smaller geographic niches. By categorizing your content into narrowly tailored categories, you’re going to be better serving a greater number of people by making your site’s content more relevant to them. Whether this will translate into big ad dollars is anybody’s guess. But can you afford to ignore catering to your local audience, where many of your advertisers reside?