This was originally written as a guest post for hyperlocalblogger.com, but I didn't get a response from them after sending it over.  So here goes… my contrarian take on what will happen with newspapers and big media over coming years.

It doesn’t take a lot of effort to find stories on the death of newspapers and the rise of citizen journalism and the hyperlocal movement. Certainly, we’re at a point in history where technology has adapted faster than incumbent media businesses. Setting up a blog took effort & expertise five years ago, but now it takes about 2 minutes on services like WordPress or Typepad. Anyone with time, ability, and commitment can create an effective hyperlocal blog. Meanwhile, almost all major newspapers are reeling – struggling financially and cutting costs where they can to survive.

So major media is done, right?

Nope. Not even close.

I know it isn’t chic to write about all the advantages of big media on a hyperlocal blog, but I’m also not out to sugarcoat anything for anyone. IMO the days are getting numbered for hyperlocal (at least in terms of new opportunity). Here are six reasons why:

1) Hyperlocal is getting too cool – Too many people are getting into the hyperlocal game for it to remain a novelty. Sure the first few local blogs to succeed in a city are generally interesting, but each new one is marginally more interesting than the last. At a certain point, you get too many entrants and the novelty is gone. Competition increases significantly for readership. Lesser known, high quality hyperlocal brands face the choice of toiling in anonymity or perhaps partnering with the local newspaper for eyeballs. Reputation begins to matter again, which is the turf of the established local newspaper + the top few new brands created in the hyperlocal craze. Everyone else loses. Then what? Will the long tail of hyperlocal blogs vanish because the effort expended outweighs the benefit of say 100 unique users a day?


2) Astute, empowered newspaper management – Management at major newspapers – at least the ones I speak with regularly – are very, very astute. They aren’t dumb fat cats who sit in their office & extol about the virtues of the print medium. They’re awake. They understand that some of their product is now “commodity” product that can be consumed hundreds of ways. They understand that their future is in hybrid print/online product offerings and business models. They understand that advertising is evolving along with the old ways of consuming media, and that effective ads for both advertisers and consumers will increasingly be in the form of hybrid offline/online formats. In other words, they get it a lot more than conventional wisdom would dictate, which means they are experimenting more and more in areas where only hyperlocal folks have roamed in recent years. And if you believe otherwise, you are in serious denial.


3) Distribution Advantages + New Hyperlocal Products from Big Media = uh oh – Sure, newspapers are struggling financially, but they are still powerful. Print publications, archaic as you may think they are, still have wide distribution. Even though we see a lot more available print ad inventory in newspapers today,  that space can be used to promote new online, hyperlocal ventures. This is a *huge* advantage for local newspapers. Add to that the fact that newspapers are often diversified beyond just print. Even the worst newspapers have an online presence (web site, e-mail lists, etc.) that they can use to promote new ventures. Take for example 29-95.com, a new hyperlocal site launched by the Houston Chronicle. Scan the site, and you won’t find much of anything identifying the site as being produced by the local newspaper. This, arguably, is the future of hyperlocal – *not* a network of new, largely unfunded web sites put together by anonymous members of the local community who actually have day jobs.


4) Advertising Sales Infrastructure – Sooner or later, all hyperlocal initiatives have to make money. Whether you like local newspapers or not, they still operate the most extensive local advertising infrastructure in almost every major metropolitan area in the United States. They offer a wide range of advertising options to local businesses, from print to online to search engine marketing. And guess what – local advertising, especially online, is a huge growth opportunity expected to achieve 18% CAGR (compounded annual growth) over the next 4 years according to the Kelsey Group. Because newspapers already have a decent (albeit poorly optimized) local advertising sales/service infrastructure, they have significant economic value – perhaps more than a lot of people credit them for today. On the basis of this economic value, I predict that newspapers will either recover or they will be bought by healthier technology companies like Google, Microsoft, and others who have a keen interest in local advertising. Don’t underestimate the value of local advertising sales infrastructure; it will matter more and more as time passes.


5) Only the strong will survive, but probably not on their own – Simple economics dictates that a few winners will emerge & generate enough economic value to continue developing/enhancing their content products. Others will be seriously marginalized, which kicks off a vicious cycle that makes it harder and harder for those hyperlocal blogs to get attention and readers.  Therefore, in each local market, only a few prominent hyperlocal blogs will win.  I suspect that five years from now, the top 4-5 hyperlocal blogs in each market will be integrated (through acquisition or partnership) into the next-generation online/offline newspaper with the major newspaper taking the lead. Newspapers will benefit by getting unique content produced at a lower cost. Editors will have the ability to republish content from hyperlocal sources that can afford to have “a voice”, while the paper can keep its traditional journalistic objectivity. Most importantly, perhaps, newspapers can rebrand themselves as being the definitive source of news and local information in their communities.


6) When in doubt, big media will throw money at the problem – We’ve seen this cycle before in other industries and we’ll see it again here. Large companies fail to react quickly enough to new technology, so they solve the problem with bags of cash. Take for example the Internet. I remember in 1996 – there were hundreds if not thousands of companies poised to be the next Microsoft or IBM. It was a fragmentation cycle where the economics & promise of starting a new tech company were attractive enough that a lot of folks jumped in. What happened? Well, that cycle gave us a few big winners (Yahoo, Google). It gave us some companies that did fairly well – a host of companies that were ultimately acquired by major tech companies with comparatively deep pockets. It gave us a ridiculous number of losers as well – companies that simply couldn’t survive. What didn’t occur was the destruction of the old business. It won’t happen here either. Major newspapers may never be as strong as they’ve been for many years, but they aren’t necessarily going to die either. The recent acquisition of @cnnbrk is, in my view, evidence that big media will correct the mistakes of ignoring new media by simply throwing money at the problems. This may very well happen on a smaller scale in/around the local newspaper ecosystem.