Traditional Local Journalism Online – The Economics

The Seattle Times looks at the economic viability of launching a local news site from scratch as David Brewster, founder of The Seattle Weekly, attempts to launch an online newspaper for Seattle. The outlook is not good.
Brewster is aiming to fill what he says are gaps in local journalism, but is having a predictably hard time getting funding for the new site as well as facing competition from Google and from existing Seattle media. Google is planning to distribute online coupons from local retailers and there’s also a possible threat from local online journalism site network Backfence, which may expand to Seattle soon. That’s a citizen journalism model that isn’t profitable, but is starting to benefit from the boom in online ads – described by CEO Susan DeFife as “outstanding to astonishing”. Put in these terms, it almost sounds like citizen journalism is just a cheap business model though (I hope) that really hasn’t been the motivation for the models we’ve seen so far which have been more philanthropic, for the most part.
But the economics of a traditional news model just don’t work online, said Nick Hanauer at venture firm Second Avenue Partners. He said news aggregators like Newsvine (which is superb, and one of my top three websites ever) and Digg are hot and are getting funding, but it’s not viable to create a local newspaper with original online journalism. “I can’t think of a reason to invest in a company that wanted to be a local, sort of traditionally structured news organization but with online content. There’s almost no way to build enough revenue to cover the expenses.”
Update: We have changed the headline to make it less speculative. Thanks Mike.
Related: German Pure-Web Newspaper In Line For $10 Million Revenues
Keeping An Eye on The Citizen Journalism Business Model

This article originally appeared in MediaGuardian.

loading

Comments have been disabled for this post