For papers, local is the new global Media Man Australia

For papers, local is the new global - 15th March 2009
(Credit: The Sunday Business Post Online)

Two news stories in recent weeks were interesting when related to the future of the newspaper industry. The first was the announcement by Eamon Ryan, Minister for Communications, Energy and Natural Resources, of an incentive scheme for the ‘microgeneration’ of energy that offers householders and landowners the opportunity to create and sell energy back to the national grid.

The second was the announcement by the New York Times that it was launching ‘hyper-local’ news websites for communities in the New York and New Jersey areas. Under the micro-generation scheme, individuals can sell surplus energy back to the system at a tariff of up to 19 cent per kilowatt.

Incentives are also available to help people offset some of their set-up costs. Eligible microgenerators include renewable energy systems, such as small-scale wind turbines, photovoltaic, hydro and combined heat and power systems. It also provides an opportunity for local communities to form energy cooperatives.

The electricity network, much like traditional news organisations, w as designed to accommodate the flow of electricity from large centralised plants to customers throughout the country. Under the new scheme, energy can be generated at local level and become part of a two-way flow of electricity.

‘‘Before, you received your power from a central source and paid for it,” Ryan said. ‘‘Now you can generate for yourself and be paid for the excess you don’t use. All our farms and houses can be micro generators.”

The second story involves the New York Times entering the local news market via a network of local journalists and bloggers. Classified and local advertising revenue have been migrating from print to online since 2000.

Faced with the resulting fall in circulation and advertising. the New York Times has launched a website called the Local. It will feature posts by New York Times journalists and community members about everyday life in the New York neighbourhoods of Clinton Hill, Fort Greene, Maplewood, Millburn and South Orange.

Among other things, it will include news of what’s on locally, listings for jobs, homes and cars, reviews of local restaurants and bars, and discussion forums for local people.

This hyper-local model, which employs one paid reporter per community, is expected to provide better coverage for local issues than the larger daily titles, and take a share of local advertising spend. Like the micro-generation energy scheme, it empowers individuals in communities and means that a newspaper moves from being a product to being a networked platform that is powered by - and, at the same time, serves - its target audience.

The Times is working with the New York Graduate School of Journalism, which will collaborate with the Local in Clinton Hill and Fort Greene to teach residents about reporting and the use of interactive media.

Journalism students will contribute to the Local and help residents to contribute. Residents will also have chances to complete summer internships.

Through this initiative, the Times will source local news at minimum cost and provide it to its audience free in the expectation that advertisers will pay.

If the Times succeeds, it could provide the paper with a scalable and sustainable model for local news.

A similar system could work for reviews, recipes, travel and sport. We will no doubt, in time, see an Irish example of the Local covering local issues across the country. I can’t help but feel that, following the separation of Irish Times.

com and Ireland.com, this could have been an effective route for Ireland.com to have taken. However, quality investigative journalism, business news and national news are less likely to fit this localised, amateur system. Therefore, it would need something other than a free, ad-funded model to support it. These areas will either need to be on a subscription basis or they will be accepted as loss-makers supported by other paid services.

There are cases for and against charging for certain content that newspapers publish online.

It would result in a drop in overall website traffic but, as it appears that less than 50 per cent of online newspaper ad inventory is currently being sold and that this oversupply is causing downward pressure on display advertising rates,t his may not be a negative effect.

The main case against a partial subscription model is that this content effectively becomes invisible online behind the subscription wall. Google does not return it in related searches, and bloggers and other online commentators will not link to it.

Managed effectively, third party paid services that are integrated with the newspaper website and operate on a revenue sharing basis can deliver meaningful extra revenues at minimum cost. Examples include wine clubs, dating, fantasy football and online bingo, depending on your reader demographic. It is reported that, in Britain, the Sun earned stg£10 million profit from its online bingo in 2007.

These cost-effective partnership initiatives will be of most interest to newspaper companies, as ‘return on investment’ becomes the all-important phrase for new media.

Media outlets have always been evolving. In the 1920s,US daily newspapers achieved market penetration of 130 per cent. Due to factors such as the growth of radio and TV, this dropped to 53 per cent by 2000.

Since 2000,newspapers have been faced with rapid evolution due to the erosive effect of the internet and now the crippling effect of the current financial crisis.

Newspapers have the audiences, t he brand loyalty, the journalistic values and the content management expertise, but they urgently need to find a more sustainable business model based on localisation and more diverse revenues.

Cillian Barry is a digital media and marketing consultant with Feep Marketing. He can be contacted at cillian. barry@gmail.com

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