Backfence Backpedals: Lessons Learned

(NOTE: I originally published this article on Poynter's E-Media Tidbits blog. I'm republishing it here, slightly re-edited.)

Last week, Backfence (which runs a high-profile family of hyperlocal citizen-media sites) announced a substantial retrenchment. CEO and co-founder Susan DeFife resigned, citing differences with the company's board of directors. Also, 12 of 18 employees were laid off.

Ouch! This news has spawned much thoughtful discussion and interpretation. For instance, see the comment thread from this Local Onliner post.

Search Engine Watch noted: "This is an unfortunate setback, given the company's growth over the last 18 months from its original D.C. area community sites, to its west coast expansion and many Bay Area site launches (it now totals 13 sites in D.C., Chicago and Bay Area). ...Its apparent cash flow problems and layoffs could be telling, and a more sustainable hyperlocal strategy could be in an aggregation model like that of the newly launched Placeblogger. Time will tell if this is the case."

Yes indeed -- finding a sustainable way to financially support local news content is a thorny issue. Personally, I don't think conventional advertising can continue to shoulder most of that burden, in any media.

So how can you build a sustainable business based on local content, including citizen journalism?...

On that front, I agree with what Tish Grier wrote on Jan. 7: "Perhaps some of Backfence's revenue trouble could be attributed to the reliance on a single, spotty advertising revenue stream rather than developing multiple revenue streams. ...One small bit of Internet hubris that I'm learning much about is [the assumption] that sufficient income for a project can be generated simply from advertising."

In my experience, community-based online media thrives when there's strong participation and collaboration. It's not enough just to read the news there, or even to publish your own stories there.

Sadly, Backfence never really got the participation/engagement part down well, as far as I could tell. Matthew Ingram's recent scathing headline nailed the experience of most Backfence community sites, I think: A back fence around a ghost town.

Engagement and participation opportunities are fundamental and crucial to community sites, whether the community is defined geographically or otherwise. I think this applies to any local news organization, as well as to independent gate-crashers to the news biz.

Pramit Singh noted that to increase revenue, "...you will need more participation. Topix has built a great Forum service. Perhaps, local news sites may also try serving as an aggregator of local news and a host for topic forums. Even a Link aggregator such as Digg has great comment section."

Need some specific how-to steps for supporting and growing local news operations, especially online? Tidbits contributor Steve Outing recently published in Editor & Publisher a great list of 10 action steps for publishers and editors of small newspapers. Several of these also could apply to citizen journalism sites -- even independent ones.

...And I've got one tip to add to Steve's list: Offer mobile-friendly content (including custom feeds from forums and search queries) and combine that with pay-per-call advertising. That's a sleeping giant for the local news/content market, I think. Give it a try -- especially if your local mainstream news organization isn't doing that yet. You might get the jump on them.

Comments

[G. P. Hughes]

How to make hyperlocal media pay is the question posed here and everyone seems to be depressed because of some notably well funded failures.

I'm of the opinion the idea that an advertising model can work ought not be counted out for some very good reasons; primary among them that new media forms make advertisers look good on the cheap.

The key to it all though is audience. You've got to have an audience before you even try selling the first ad.

I know that the first person to advertise on my site literally forced a check into my hand because I had, at that point, only a desire to build audience. At the time I was doing a 'daily' news page. I'm back to weekly now; wore myself out and I do have to take care of advertisers now.

Today, the hyperlocal site I run has an audience. Further, because we literally have thousands of contributors, we get not only local news no one else has but many members search the web for snippets of national news and post comments and links.

With few virus worries (I worry enough about them) and not only the camaraderie of neighbors talking ... and fighting ... the site is the only place on the net some people come.

The main advantage we have over our print brethren is that we can grow and grow and grow well beyond our 2,000,000 pages of web content monthly while we hold the line on distribution costs at $430.00/mo. Even if I add four more server "U's" to the six I use, my monthly cost won't increase more than the lease on the machines and $10 for more amps of power.

What this means is that we can document and deliver ads profitably at under $2.00/M ... and because we have color and motion ... and even rich media ads - video with sound ... we can do it at prices no other media can touch.

But all that is possible because we took the time to build an audience. Think of it this way, you have to build the franchise before you can sell it.

Just because Dan Gilmore or the folks at Backfence were unable to bring those competitive advantages to bear is no reason others can't.

Bottom line, as a content creator, the Net has it all from interactivity to video to text conversation to motion to color ... although I will draw the line at smells - the humor would get too rough :)

Oh well. That is what I think. Not much time to hob-nob with the elites 'cause I've got site to run.

GP Hughes

[Rick Ricardo]

Mr Hughes,

What is your web site? I'm dying to see it. You have some great thoughts. Since I do not check this site often, please EM me at usmodels123@yahoo.com. I'm a venture capitalist who is advising people on citizen journalism projects. Rick