The Evolving Newsroom

Interesting to see that US blogsite Huffington Post is branching out into local news (via ReadWriteWeb).

Initially, the site will launch an edited news aggregation site (similar to the main Huffington Post web site) localized for the US metro area around Chicago, Illinois. The site will be managed by a single editor to start. "We are aspiring to be a newspaper in that we want to covering all news [sic], not just the political blogging the way we began," Arianna Huffington said to [Guardian News & Media's internal Future of Journalism] conference attendees.

Launched three years ago in May of 2005 as a politics-focused celebrity group blog, the Huffington Post has since grown up -- a lot. It added original reporting in November 2006, has taken $10 million in venture financing over 2 rounds, has expanded beyond politics to cover media, business, the environment, and other hot button issues, and is the most linked to blog on the web according to Technorati. Now HuffPo wants to taken on local newspapers.

That makes sense given that analysts have predicted that local ad spending will jump 48% this year to $12.6 billion. The majority of those ads will be search advertising, but clearly, local information is hot with consumers. We've written about the rise of hyperlocal information on ReadWriteWeb before -- Huffington and company are seeking to take advantage of this trend. They want to turn the Huffington Post into a national, virtual newspaper group -- think Gannett or McClatchy but completely online.

And that makes sense, too. A comScore study that we reported on in March revealed that 38% of those between the ages of 18 and 24 are unlikely to read a physical newspaper during a typical week, but non-news readers are still voracious consumers of news. They just get their news online.

I read this story, headlined Small Towns, Big Profits, on Editor & Publisher a while back. It finds that small papers in the US are ticking along very nicely compared to their big-city counterparts. Some are even enjoying record profits and most report their margins remain intact.

The article goes on to explore what big papers could learn from the things that small papers do well - diversfied ad revenue, the personal touch, deep roots in the community, and discipline - and I think it's worth a read.

It's always nice to hear something positive from newspaper-land given the amount of ink currently dedicated to talk of its slow-but-steady demise.

The question, though, is how long rural and small-town newspapers will remain unaffected by the market changes that are eating into big-city newspaper circulation and margins.

As Bob Scaife, a Newspaper Association of America vice president of marketing who is quoted in the article, says: competing media and broadband penetration will eventually reach markets that are now sitting comfortably. "They have to keep an eye over their shoulder with what is going on out there."

I agree. There's no question that ink on paper remains strong in rural and small-town New Zealand. But most of those newspaper readers either don't have internet connections or have dial-up or low-speed broadband. Eventually that will change, and people's reading habits will change along with it - with a clear impact on local papers. Unless, of course, those local papers start working towards developing useful websites. Not much sign of that yet.

Meanwhile, a Marketing Week report on UK regional newspapers makes for grimmer reading. It says regional papers there are struggling and undergoing long-term falls in both circulation and advertising. The article quotes people on the positive side of the spectrum as well as those who say the sector is going through an identity crisis as it transitions from print to online.

It notes a flurry of website start-ups among regional papers - particularly recruitment sites and others aimed at re-capturing lost classified ads - but questions how well they'll be able to compete in the long term. David Newton, a media buyer quoted in the piece, says regional publishers have been "behind the pace in terms of the growth of online and embracing its opportunities."

The article notes that a recent Newspaper Society Annual Regional Press survey found that online makes up only 2.5% of ad revenue for the UK regional press - a very long way to go, then.

US newspapers are losing the battle for local online advertising to web-only players like Google, according to the Wall Street Journal.

Internet companies had a 43.7% share of the $8.5 billion local online-ad market in 2007, while newspaper companies had a 33.4% share, writes Emily Steel. Three years ago, newspapers had 44.1% of the local online-ad market.

"Local media companies, because they are based in the communities they serve, would seem to have an edge over internet sellers when it comes to persuading the diner or corner hardware store to take out an ad. But they have largely failed to convert that advantage into sales. Instead of tailoring their sales to local businesses, many newspaper companies initially focused on selling ads to bigger advertisers who were already buying space in their print products.

"While this strategy allowed them to quickly and cheaply create a customer base for their online ventures, it also limited their growth, because they weren't expanding their customer base.

"Many newspapers also hurt themselves by simply plopping their papers online instead of creating new websites that offered advertisers something they couldn't get in print. Meanwhile, Web companies such as Google and Local.com are growing rapidly because they have made it cheap and easy for local companies to take out ads."

Then there's New Zealand's papers, many of which don't run online ads at all. In fact, do a quick search of APN titles, say Hawke's Bay today and the Bay of Plenty Times - and there are no ads. None. And the 'advertise with us' link is all about advertising in the newspapers.

Flip over to Fairfax, say the Manawatu Evening Standard and the Timaru Herald, and you will see some ads, albeit national ads for airlines and online clothing stores.

These, I think, are a new addition and a good sign. It shows Fairfax is starting to take notice of its regional websites which have for a long time looked rather unloved. APN's still do. Both, however, have a long way to go.