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June 7, 2012, 2:43 p.m.
Reporting & Production

In the Netherlands, a Patch-like hyperlocal network is making money and nearing profit

With a mix of aggregation and original content, Dichtbij is trying to build a sustainable business — and they’re getting close.

In the United States, there are any number of individual hyperlocal sites that are proving sustainable — Berkeleyside, West Seattle Blog, and the like. What’s proved more elusive is a way to take those individual successes and systemize them — to make them replicable across a larger scale. The best known effort to do so, AOL’s Patch, has had a rough go thus far: An activist shareholder estimates that in 2011, Patch’s 800-plus sites generated just $13 million in revenue against $160 million in expenses, and AOL is cutting costs.

But across the Atlantic, there’s a more optimistic example. The Netherlands’ Dichtbij — “close to me” in Dutch — is a hyperlocal news platform that’s generating real revenue despite operating on a much smaller scale. Across its 80 sites, Dichtbij is on pace for revenue of €10 million (about $12.5 million) in 2012, according to Het Financieele Dagblad, the Netherlands’ leading financial newspaper. And its founder, Bart Brouwers, says he expects the two-year-old operation will be profitable by year’s end. “The income is higher every week,” he said.

Brouwers came up in newspapers, starting as a reporter, then becoming editor-in-chief of a regional daily and a free tabloid. He decided to launch Dichtbij in 2010. From a small start, today the site has 140 employees, 70 dedicated to sales.

Like Patch, Dichtbij is backed by a large media company: Telegraaf Media Groep, publisher of the Netherlands’ largest newspaper and a number of other print, radio, and online brands. That backing’s helped as it’s expanded from a few pilot sites to a large network today — one that’s going to increase in size again in the near future.

“Many hyperlocal networks (around the world) have had a really hard time making money,” he said. “There were not enough examples of success, so I had to invent most of the things myself, which was fun, of course.”

The first step was a choosing three cities for start in. To maximize learning, each one was planned to test a different set of questions, with the hopes that a model might become clearer in the mix.

  • In Woerden, the focus was on identifying and activating a community, with social media playing a key role.
  • In Zwolle, the model was built around aggregation.
  • In Eindhoven, there was a bigger investment in original content, plus what Brouwers called “commercial writing,” which consists of writing stories about events sponsored by the site’s advertisers (a model not everyone likes).

“We are trying to make a good business,” Brouwers told me. “I made a lot of mistakes; that’s the good part of doing a pilot. They were crucial in finding the formula for our platform.”

The platform is still young and it is work in progress, but Brouwers can share a few lessons he believes have helped Dichtbij succeed:

Think community managers, not just reporters

Journalists that work for Dichtbij have to see themselves as “community organizers.” For Brouwers, part of the success of a hyperlocal site is to develop a symbiotic relationship with the audience. “You have to activate your community. It is difficult and it differs from one place to another, so you have to be really involved with it.” That’s why the community managers are expected to spend half of their time reaching out to citizens (mostly through social media) and being out and about in their cities. The other 50 percent, Brouwers explained, is for traditional journalism (writing stories, shooting video, editing). A few sites in the largest cities are big enough to have two community managers each; others are small enough that two sites have to share one.

Dichtbij invites their users to visit their offices and have a beer (or coffee). “The reporter gives the audience reporting…and the public gives the reporter the knowledge of what’s happening in their communities,” Brouwers said.

What kind of content mix does this model produce? Here’s a sampling of what Dichtbij’s site in the town of Eindhoven offered yesterday: a story on two girls that were found after being missing 2 days, a sponsored piece about a new cycling tour in town, a daily “good morning” picture, an article describing how students are using Twitter to cheat, a photo gallery of how the city is welcoming soccer’s Euro 2012 championship, details on a decision to newly allow marriages on Sundays, and some breaking news (a fatal car accident.)

Allies, not foes

The Dichtbij model relies on close(r) relationships between journalists and sales people — something that raises the hackles of traditional journalists. A team of four “entrepreneurial journalists” collaborates with the advertising side across all the sites on generating commercially driven content. The result is stories like this one on Silly Bandz, which was paid by the local shop that introduced them to the Netherlands, or this one, a first-person piece from a student giving advice on how to cut expenses and paid for by a bank. (The sponsorship is disclosed in the last paragraph of the story.)

As you might imagine, and as Brouwers acknowledges, ethical issues come up. Businesses rarely pitch specific story ideas, he said, but they do get to see the story before it’s published and can suggest changes. And they often do. Brouwers says they tell clients that “they cannot dictate what we write.”

According to Brouwers, this kind of “commercial writing” makes up less than 10 percent of the site’s content, although in specific sections (like Shopping and Housing), the percentage can go up to 50 percent. Those stories are also not normally posted on the sites’ homepages or in hard-news sections. “I found it is possible to please an advertiser and still write stories that your audience finds interesting,” he said. Your mileage may vary.

Centralization doesn’t work

Stories and ads have to be tailored for each community; overcentralization makes it hard to truly connect with a community. The sales person and the community manager have to be from the region they are working with, Brouwers stressed: “Holland is a very small country, but we have small differences in the language, so if you speak with the wrong language, things can go wrong.”

Aggregation isn’t enough

From the pilot site and later experience, Brouwers said you can’t rely too heavily on aggregation to build a successful hyperlocal network. It helps — but he says it would be very difficult to make it without original content as a selling point. Today, as Dichtbij grows, more than half of its sites are what Brouwers calls “light sites,” which only do aggregation and have no sales teams, but the number of sites staffed for original content is growing..

To move beyond aggregation, Dichtbij just launched Android and iPhone apps aimed at generating more user content. Brouwers hopes the app will also help boost the site’s audience, which he said currently stands at 4.2 million unique visitors per month (in a nation of about 17 million). The site covers now 80 regions (418 municipalities), but that’s just half the country.

If you build it, you can sell it

On the business side, Dichtbij is now trying to franchise its model. Currently, three sites have been launched by entrepreneurs with Dichtbij’s framework; the sites’ owners pay three types of fees, one fixed, one based on a percentage of the site’s income, and one tied to the site’s size and potential growth.

POSTED     June 7, 2012, 2:43 p.m.
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