Is Local Journalism Really Set to Be a Non-Profit Exercise?

I've been working for the last two days with the Federal Trade Commission workshop on the future of journalism in the background. I could go on and on about what I've heard, but was intrigued by some of the remarks made yesterday by former Washington Post editor Leonard Downie Jr. concerning the future of local journalism, mostly because the private option -- i.e. is it possible to make money at this? -- wasn't addressed. Here are some of his suggestions about how to turn local journalism around:

• Create a fund for local news, coming out of money that the FTC already has.
• Re-orient the Corporation for Public Broadcasting, which currently focuses mostly on national and global news, around local.
• Involve, universities, and, yes, their students, in local news coverage. Downie, who is on the faculty of Arizona State's Walter Cronkite School of Journalism and Mass Communication, cited the example of that university's Cronkite News Service that creates local content that gets picked up by Arizona media, and a similar service at the Columbia Journalism School which covers some local New York City markets abandoned by The New York Times.

Some of those models are in the works. Missing from Downie's remarks -- and I think I heard all of them -- was discussions of initiatives such as MSNBC's EveryBlock and Aol's Patch, intriguing attempts at making hay out of the benefits of digitally-delivered news. EveryBlock is more city-oriented, covering neighborhoods within individual cities; Patch covers small towns that already have newspapers, but if my hometown is any guide, it does a more vibrant job of presenting news in a Web-friendly manner than the site of the main newspaper it competes with.

The key to these sites is advertising, and that is both the good news and the bad in making this model work. As one speaker said yesterday (sorry, I can't remember who), the bad is that having a good local advertising force is the hardest thing in online advertising. Not only are many small businesses still unsophisticated in the ways of the Web; so are the people who sell to them. In addition, it's a labor-intensive exercise, with little opportunity for scale.

But there's substantial good news too, if the education piece can fall into place. These hyperlocal sites may never be victimized by the outsized supply of online ad inventory in the same way that bigger content sites have. While those sites -- many of them run by big newspaper companies -- have seen their pricing devastated by online ad networks that buy demos across the entire long tail, the economics are different in hyperlocal. Theoretically, they should benefit by being at the long tail's end. The connection between local advertiser to local consumer is tighter, as is the inventory in which those advertisers might want to advertise. It's doubtful that a local car dealer is going to buy inventory on Yahoo! Autos, while the handful of hyperlocal sites catering to his community would qualify as a must-buy.

This is all theory, of course, but, to me, it sure beats Downie's suggestion that local journalism become an academic, or government-funded, exercise.

(Other good content from the FTC conference: Arianna Huffington's poke at Rupert Murdoch and traditional media.)