The hyperlocal sector has merited more than just a brief mention in OFCOM’s annual communications market report which some are interpreting as a coming-of-age for the industry. Unfortunately the new data published makes very painful reading for the sector.
The important new stuff in the report is the market research about local media usage patterns. The headline figure here is that of all people who use local media only 1% see their local community web site as the most important source of local news. Even if you narrow down the responses to people who actually do use a local community web site the number rises to only 6%. This is the same proportion as for the the web sites of local newspapers and joint lowest in terms of importance and collectively less than the total for using the internet in general as a source of local news.
OFCOM, to their credit, do their best to cheerlead for this industry sector, but there is no getting around that the numbers are dire. They demonstrate comprehensively that the problem for local community web sites is primarily audience. They may cost next to nothing to set up but very few people read them, generally because the standard and regularity of reporting is quite low, but sometimes even when a decent effort is being made in news coverage.
The results are similar to those of research done in the States which showed that the ‘hyperlocal’ web site sector was grabbing a very small proportion of audience time. The conclusion was that the sector didn’t have a revenue problem it had an audience problem. The OFCOM report shows that the reason so few sites have made any money at all is because hardly anyone visits them. Site owners get very excited about hits and visits from over-generous stats packages but as soon as usage patterns are subject to the same rigorous enquiry that other media are, the true picture becomes clear.
The low audience penetration of the sector wouldn’t matter so much if there was gangbusters growth. Figures from Birmingham City University are used to show a 46% increase in the number of web sites over two years. This is hardly the kind of growth needed for the sector to become a serious player in the local media industry and even this number is probably seriously overstated. It is based on the Openly Local database of sites which though, a laudable effort, is not complete and contains a significant number of moribund sites. There is a substantial amount of wastage in the sector with the shelf life of a site seeming to average about 2-3 years. Growth overall is probably taking place but only because packages like WordPress have made it easy to set something up with minimal effort. This reduction in the initial capital needed to set up a site has increased numbers but diluted quality.
The failure of hyperlocal to make an impact is disappointing and slightly mystifying in a way in that there are a small number of sites that do appear to have worked out how to do it. NESTA seems to have recognised the failure by chosing to leapfrog the current generation of web based sites in the hope that hyperlocal will have more impact in the mobile sphere. That still leaves us with a fundamental problem with local media: local newspapers are in chronic decline; hyperlocal sites are not filling the gap and the Government’s Local TV project is an ill-conceived idea which nobody believes will work. I’m not sure OFCOM is doing anyone any favours by pretending things are rosy in the hyperlocal garden. The precipitous decline of local media is already having an impact and there are bound to be unanticipated consequences that will make us regret complacency on this issue. The first step to solving a problem is recognising you have one.
The full text of the report can be found on the link below: