Hyper Local Purists Steamrolled by Patch?

Last week, Chicago’s Loyola University hosted Block by Block 2010; an invitation-only gathering of indie website owners, bloggers and online news hounds. They came to talk hyper-local, how to save community news and possibly make a buck doing it. Following along via video stream and tweets, I had to double check the date on my calendar.

Unless I’m imagining things, the topics and concerns being discussed seemed to be essentially the same as they were in 2007. Geez. Anybody wonder why the hyper-local revenue needle has barely moved over the past 3 years? This uncomfortable issue is the 800 lb gorilla in the room and is why every local, online news site is vulnerable to getting steamrolled.

The summit was hosted by a bevy of smart editorial & academic folk. Yet, if cracking the business model code is challenge #1, we wondered why a new biz-dev exec with local sales chops wasn’t on the steering committee. Maybe a sales pro to moderate the sales-focused panel? A critical error of many online news conferences is assuming this problem can be solved from the newsroom. It can’t. This begs the question: is the phrase entrepreneurial journalism an oxymoron?

Early during the panel session devoted to sales, attendees enjoyed a pop quiz. “Who are your customers?” Many squirmed hearing the correct answer of ‘advertisers, not readers’. Funny how some of those audience members forget how Newspapers are actually run, and how their journalism has always been subsidized by advertising and other non-news monetization.

Pegasus News pioneer Mike Orren was a wise choice as a sales session panelist, and has the scars to prove it. The Dallas based hyper-local platform & strategy he developed then sold, is always one to watch.

Unfortunately we had to witness business savvy publishers like Sacramento Press‘ Ben Ilfeld, and Howard Owens of TheBatavian being relegated to audience status during the ‘sales’ session. That little oversight did make me throw up in my mouth a little. Those two could have shared reams of real world examples & and sales case-studies all day long.

Special shout-out to those who graciously shared: “advertising is evil” and my personal favorite: “I’d rather chew on broken glass than sell an ad”. What nice, encouraging words to say in front of financially strapped bloggers. Not like they need more, but this kind of public airing of blogosphere dirty laundry only provides additional confidence to the new local competitors of Patch, Reach Local, DataSphere and Groupon.

Pure-plays like Patch love to see paralysis and the regular pissing and moaning from local news orgs. Intellectual theorizing and to-do list creation from the incumbents only provides Patch more time to marshal small armies of sellers to get in front of every mom and pop business in sight. Since small business owners are the financial life-blood of local news orgs, close relationships with them should be viewed as the ultimate end game for all for-profit news efforts.

It did occur to me, that if Patch execs were watching, they could be thinking: ‘sweet, these poor souls have no idea we could steamroll them if we wanted’. Surprisingly, Patch was rarely brought up and when it was, summarily dismissed. Instead of trying to understanding the Patch business strategy and how to compete, they were immediately described as a drive-thru experience with little chance of being a dominant news org.

Dismissing Patch is death defying puffery from those who can’t imagine losing control of local info & advertiser streams. Imagine a professional business not wanting to understand a fast moving, well funded competitor? Indeed, it speaks volumes to the ‘smarter than thou’ and academic ‘class project’ vibe of some hyper-local efforts.

Love em or hate em, Patch is one of the more potent threats to local media to date. Will they succeed? Who knows? But the one thing they will certainly do is inflict pain on the local media incumbents, forcing some to eventually throw in the towel. Patch could easily play a waiting game similar to when a Wal-Mart sells items at a loss in order to vaporize the small shop owner.

AOL /Patch’s; Tim Armstrong, recently made a TV appearance on CNBC. Tim touched on his general strategy with Patch. On the Business Insider site, reader comments slammed Tim. “Armstrong has no clue” on Aug 17, 1:24 PM said:  “do you really think local media outlets are going to let you come to their town where they employ professional journalists and let your rag tag bloggers take-over?”

We think that answer is yes if revenue doesn’t become job #1 with local website operators. As the ancient warrior; Sun Szu, explains in the ‘Art of War’: know thy enemy…

…and as I say: Your cool site sucks cuz it can’t make money, and it scales like shit. Now take control of that steamroller before you get flattened.


6 thoughts on “Hyper Local Purists Steamrolled by Patch?”

  1. Wow. Was I at a different conference? Howard Owens and Ben Ilfeld both led breakouts. Ben’s break out was about Patch. Patch was a frequent topic of lively conversation from the first hour of the conference and people were anything but dismissive.
    I agree the journalists alone aren’t going to solve the revenue problem, btw Here’s one post about that:
    http://www.knightdigitalmediacenter.org/leadership_blog/comments/20100922_audience_engagement_and_business_sense_are_essential_to_success_of/

  2. Hear hear Paul!

    We’ve been focused on Revenue *and* Reporting since about two years ago, and we now have over 50 Advertisers on our six local blogs in the Southwest King County (WA) area. We generate enough revenue to support several freelancers and 2-3 commissioned Sales Reps. And occasionally, I even pay myself.

    Patch isn’t here yet, but I’m sure they’re coming soon. A local TV broadcaster (Fisher/KOMO) has been trying to hone in on our turf, and quite frankly in what I consider to be highly unethical ways (read more here: http://www.b-townblog.com/2009/09/18/an-open-letter-to-komo-and-fisher-broadcasting/). We’re not the only local blog in the Seattle area to be on the receiving end of this (perhaps it’s good practice for what might come w/Patch?), and we certainly aren’t going to back down.

    This is an exciting time, and the fact that we’re actually embedded in our communities (we live, work & shop here) is something we’ll continue to emphasize with both our Advertisers and our Readers. Seems to be working too – at a recent Chamber of Commerce meeting, an Editor from the above-mentioned unethical local broadcaster showed up, and I overheard the reactions as she introduced herself to businesspeople. Most said things like “Oh…do you know Scott from The B-Town Blog? We Advertise with them…” which was nice to hear. I spoke with her directly and let her know that not only do we welcome competition, but until she too lives, works and shops here (she doesn’t – they report from a building in downtown Seattle some 13+ miles away), then we will continue to focus hard on the truly local angle, and yes, even work harder to differentiate ourselves from their RSS/Police Scanner-fed news stories. Since we’re here, with our feet on the ground, we get story tips personally from our friends and neighbors…which is making all the difference for us as we’re averaging around 50,000 uniques per month.

    cheers,
    scott schaefer
    publisher/editor
    http://www.b-townblog.com

  3. hi michelle,

    thx for feedback.

    post was only referring to live stream and tweets we were following.

    specifically, the sales session stream that was made public.

    from our vantage point, it really did look like patch was poo-poo’d, and the sales discussion left us frustrated.

    we want these types of events to succeed in helping monetize sites. we support your efforts.

    we just think the wrong types of backgrounds are chosen to lead the discussion, and spearhead the challenge.

    anyway, i really think you and jay did a great job with the gathering, and sharing the collective data.

    from a revenue perspective, our post was written with only good intentions in mind.

    mel

  4. agreed. hallways and bars probably had excellent ideas shared. yet the public video-cast of that one ‘sales’ session was high profile.

  5. ben,

    to clarify, i believe bxb2010 and others like it, are incredibly valuable gatherings.

    tho, as an outsider who could only follow tweets and video streams, it looked & sounded alot different from our perch. specifically the sales session.

    without revenue and profit, great journalism will suffer. thus, i am hyper-focused on that dealing with that critical issue.

    when i see or hear something that seems odd, i like to share those thoughts with those who could benefit.

    i know i can rattle some cages on occasion. but there’s no malice intended.

    while patch is only ONE of the competitors that could affect local web operators, they do seem to have some key ducks in order.

    wait til you see what reach local, yellowbook360, cable, broadcasters and others have in store for local market competition in the coming months

    in short, my respectful recommendation is that all local, indie site owners should understand that there’s a big local ‘land grab’ going on now. local advertisers are getting bombarded by more than just patch sellers.

    while a friendly embrace of new competitors would be preferred, I would have a big stick ready..just in case.

    i appreciate you allowing me to share my alternative views on this issue.

    an informed person, knowing both sides…….always makes better decisions.

    🙂

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