Hyperlocal Revenues, Yes, They're High

Posted on 18. Aug, 2009 by in Hyperlocal, News Ecosystem, Revenue

The figures we used for our Hyperlocal model were based on three market sizes — small (20K), medium (35K), and large (60K) — supported by a broader Framework of local businesses and ad networks.

Yes, our work assumes that “in a metro market of 5 million people, the hyperlocal network will be able to get 1.75 million readers (35 percent penetration) in Year 1, growing to 3 million readers (60 percent penetration) in Year 3,” as TechCrunch points out.

That would allow a large blog to increase its gross revenue from $126,976 in the first year to $331,640 in the third, while growing its net income from $42,277 to $148,269 in the same period — assuming that staffing costs will also increase. Some sites are already coming close to those figures without optimization and efficiencies we believe ad networks and the framework would provide. Click here to view the Hyperlocal & Framework models as a Google Document. Be sure to click on the Revenues for Blogs and the Income Statement for Blogs tabs at the bottom of the spreadsheet to view all figures related to this post.)

We’ve compiled our numbers for each market size based on several revenue opportunities, including advertising, business-to-business services and e-commerce. While not all of these opportunities would work for all sites, our team found enough revenue models to support our assumptions.

And from what we’ve been reading, there is certainly strong interest in hyperlocal news these days. See the PBS Engage/Knight Commission online survey about community information needs published in April, as well as our post on ESPN going local. As a final note: to cover the largest targeted readerships we extended the taxonomy of hyperlocal to include vertical sites such as music, food, sports and mom blogs.

Again, we welcome readers to play with these numbers and see what they can come up with. (The New Business Models for News Project has been funded by the Knight Foundation.)

Download the Hyperlocal/Framework Excel file here.

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