Online Startups Seek To Satisfy Local News Needs

As major newspapers watch subscriptions shrink by the day and television stations struggle to retain advertisers, no one seems to have the perfect recipe to remain profitable in the mainstream news business.

But others are finding opportunity during this industry turmoil.

Now entering the fray: LocalOnlineNews.tv, a West Hartford-based Web site producing online video stories that are typical of what would likely be found in your community newspaper.

The startup comes along as hyper-local news Web sites devoted to a specific town or region, often backed by veteran journalists, begin to pop up around the country. Their emergence is based on the recognition that major newspapers no longer have the staffing to cover small towns like they once had.

Less than a month old, LocalOnlineNews, under the editorial direction of former WTNH reporter Anna Sava, has attracted more than 4,000 unique visitors and is generating buzz around local media circles.

Though many believe there’s a healthy market for hyper local news, what industry observers want to know is whether this new venture could turn a profit.

Even without previous models to base this experiment on, co-founders Lon Seidman and Steven Kapisnow believe the operation can be in the black by the end of the year.

“We’re not over-leveraged, and there’s no venture capital money,” said Seidman, a former political campaign manager. “Our burn rate is at a point where we can stick with this for a while.”

Without a formal office space, start-up costs have been minimal. Expenses are limited to video and editing equipment, Web site space and a reporter’s salary. LocalOnlineNews is just now starting to make an advertising push, selling spots of five seconds before a story plays and up to four minutes at the end of the video.

As of last week, only a local real estate agent had purchased advertising time.

Still, Seidman likes his revenue model. Unlike other news organizations that depend on site traffic for greater advertising revenue, LocalOnlineNews doesn’t have that concern because ads are embedded into the stories. So even if a story is posted elsewhere, Seidman can count that traffic for advertisers.

“We don’t care where people see us,” said Seidman, who estimated 25 percent of viewers come from other Web sites, like Yahoo and YouTube.

Seidman first dreamed up the idea for the news operation a couple of years ago, but plans started to gain steam in January as major Connecticut news operations started to scale back staff and local coverage.

Seidman, an Essex resident, was particularly alarmed by the loss of several local news outlets in his community. But with other towns experiencing similar losses, he thinks there is opportunity.

“There’s no lack of demand for information,” he said.

LocalOnlineNews hosts two-to-three minute news packages focusing on West Hartford, a town of 65,000. Within the first couple of weeks, stories have included a “celebrity breakfast” of town politicians and business leaders, a new prosthetics program at the University of Hartford and the town’s swine flu preparedness.

The operation’s sole reporter, Anna Stonestreet — who said she’s starting to get recognized more and more around West Hartford, even gaining a following of fans on her Facebook page — said the swine flu story was particularly important.

“For me, it’s about what’s happening in this town,” she said recently at the Bishops Corner Starbucks, the site’s typical meeting spot.

In Connecticut, the New Haven Independent was one of the first to recognize the demand for local news.

A completely online venture launched in 2005, the news site is backed by about a dozen major sponsors and provides in-depth coverage of New Haven.

Another entirely online news site, North Haven News, airs a bi-weekly video blog. Founder Chris Kirby, who works full-time as a WTNH graphic designer, said he’s losing money on the venture because he rents a small studio and hasn’t tried to attract advertisers.

“I’m not going to say I can get rich off of it,” Kirby said. “If I got more people watching it, then I can approach businesses in North Haven and tell them you have a chance to directly target the people of North Haven with a quick video ad before each episode. I think someone might bite.”

Seidman said his site plans to bring on a former NBC 30 reporter this month and will look at other possibilities to expand. Should the advertising dollars start to roll in, the founders want to expand coverage into other communities, with plans to add a new reporter for each new town.

The big question in the industry will be whether these hyper local Web sites can generate profits and provide quality content. By touting themselves as hyper local, they naturally limit their revenue model, said Bob Papper, professor of journalism, media studies and public relations at Hofstra University.

“The notion of hyper local is to get people in very defined and comparatively small areas engaged, but it means fewer businesses are going to find that attractive or reasonable,” Papper said.

“We’re going to see a lot of experiments with hyper local, redefining community and coverage,” he continued. “The solution isn’t easy.”