The Hyperlocal Economics Nobody Wants to Admit
New data shows Americans won’t pay for “news,” but they will pay for hyperlocal civic participation. The difference is 8x in conversion rates. That changes everything we’re building.
Hyperlocal is the only model. Between yesterday’s Pew Research survey data and last week’s newsroom revenue analysis from Justin Bank, journalism funders and support organizations have two sets of data they can no longer ignore. Together, they expose the fallacy of national and metro-centric economics and confirm what funders have long suspected: hyperlocal isn’t just possible. It’s necessary.
Pew found that only 8% of Americans believe people have a responsibility to pay for news. Only 17% have paid for any news product in the last year. When asked specifically about paywalls, only 1% of Americans say they’ve ever subscribed to one. The cultural perception is undeniable. Most Americans simply do not believe people should pay for news.
Bank’s data tells a different story when it comes to hyperlocal newsrooms like the Sebastopol Times. With 7,500 people in its service area, the Times converts 24.5% of readers into paying customers. Local sports blogs often see conversion rates between 15% and 28%. By any measure, these small-town publications are converting significantly more readers than metro or national publications.
But here’s the thing: they’re not contradicting each other. Taken together, these two pieces of research paint a perfectly clear picture of where our industry stands. Americans won’t subscribe to “news” in the abstract—which is what the Pew data outlines—but Bank’s data shows what Americans will actually pay for.
Hyperlocal news. Local sports blogs. Digital newspapers serving people at the city and town level convert significantly better than larger publications because they sell something people want: hyperlocal civic participation. The difference between these two things isn’t marginal. It’s existential.
What the Data Actually Shows
The conversion pattern is precise and consistent across Bank’s analysis:
Tiny towns (5K-15K residents): 15-25% conversion (Sebastopol Times: 24.5%)
Local sports beats: 15-28% conversion
Metro/regional: 3-5% conversion (Charlotte Ledger: 5.3%)
City guides and national: ~3% conversion
As geographic scope decreases, willingness to pay increases by a factor of 5 to 8. This isn’t “hyperlocal works better than metro”—it’s “only hyperlocal achieves conversion rates viable at small scale.”
I learned this the hard way. When I started a nightly newscast covering 10 counties in northeastern Pennsylvania and New Jersey—a whopping 5,600 square miles—we struggled to drive financial support. We looked at the coverage area as all being related. Advertisers, sponsors, and donors saw it as a set of disparate communities. The geographic ambition that seemed like our strength was actually killing our ability to generate support.
Bank’s analysis reveals this same pattern in the revenue numbers. The Sebastopol Times serves 7,500 people with two staffers and generates ~$100K annually. Charlotte Ledger—which does excellent work—serves a 900K metro with larger capacity and generates roughly $210K.
That’s 120x the population for only 2x the revenue. This isn’t just a minor gap; it’s a demonstration of revenue density. Hyperlocal newsrooms aren’t just “small”—they are more efficient at extracting support from their specific footprint than a metro paper can ever be at scale. The specific dollar amounts matter less than the order of magnitude. We’re not talking about $100K versus $150K. We’re talking about operations that work at tens of thousands annually versus those that require hundreds of thousands or millions. That’s the structural difference the data reveals.
The economics don’t just favor hyperlocal. For local news serving a specific community, they only work at hyperlocal scale.
What “Civic Participation” Means
To say that Americans pay for civic participation and not news is to say that they care about paying for membership in a community, not digital content. American Press Institute’s reporting on live journalism events puts some meat on these bones. During their Live Events Sprint, participating newsrooms swapped lectures for living rooms. Instead of expecting members of the community to come to them, they brought journalism to the people.
One great example was Enlace Latino NC hosting community forums where residents got to confront city council members in attendance. Vermont Public took advantage of community picnics by setting up listening stations where reporters became moderators. And Blue Ridge Public Radio took their journalism right into trivia night.
That’s hyperlocal civic participation. The Sebastopol Times hits a 24.5% conversion rate because their readers aren’t just buying a website to consume—they’re paying the community’s salary so it continues to function.
Why this Changes Everything About How We Fund News
On Tuesday, I argued for a coordination infrastructure that connects newsrooms to shared support at $3,750 per newsroom annually, rather than allocating $600K in grants to 5% of operations. The argument then was about efficiency and reach. The Pew/Substack data suggests it was actually about recognizing the only economically viable model.
If hyperlocal newsrooms are the only ones generating these sorts of conversion rates, we aren’t choosing between supporting metro versus small-market newsrooms when we fund journalism. We’re choosing between supporting what works and subsidizing failure. The question shouldn’t be how we help newsrooms grow to some unsustainable level. It should be how we help them succeed on the only scale where the math works.
Islands of Information
Here’s the part where donor friends get uncomfortable. Newsrooms with annual budgets of $100,000 can’t do investigative reporting that takes multiple months. They can’t afford to have a daily presence at the state capital. In isolation, hyperlocal isn’t just a small newsroom. It’s an island of information unable to connect with others.
Two towns over from the Sebastopol Times there may be a similar story about a weird zoning variance. With no coordination layer, two separate newsrooms will never know those stories are related and band together to hold corrupt officials accountable. Without coordination, hyperlocal newsrooms are islands of information who just happen to cover the same state.
If hyperlocal is the only sustainable business model, then systemic problems like corruption just won’t get covered at the state and regional level unless philanthropy is willing to pay for it as a different form of journalism. This isn’t temporary bridge funding. This is a forever subsidy for a critical type of reporting that can’t pay for itself.
The 160x Efficiency Play
If we accept that newsrooms of tomorrow will largely be hyperlocal, we’re basically doing funding backward. Today, journalism support provides roughly $300 million per year of service to around 500 newsrooms. For around $30 million per year, we could connect 8,000 hyperlocal newsrooms to those shared services.
I didn’t pull that number out of thin air. That 8,000 represents the other 95% of newsrooms out there that aren’t on anyone’s philanthropic radar. Many of them interact with their state’s press association on a weekly basis. But if you’re a national grant program, they just aren’t easy to find or serve.
Providing coordination at a small enough scale to reach 8,000 individual newsrooms is literally 160x more efficient as a funding strategy than our current grant-making model. We aren’t just talking about better conversion at the newsroom level anymore; we’re talking about distribution leverage for the entire sector. Newsrooms can’t afford the infrastructure to talk to each other on their own.
That doesn’t mean we should leave them unable to talk.
Coordination is the only way small newsrooms get access to the tools and resources they can no longer afford to pay for individually. Philanthropy needs to focus on how we can enable 8,000 newsrooms to thrive with budgets of around $100,000, not how we can help 500 newsrooms scale to $500,000 budgets.
That’s not pessimism. That’s looking at the data and updating your stance accordingly.
And it changes everything.
What do you think?
Which side does your newsroom or organization fall on? Are we building “islands of information” or the connective tissue that makes the efficient model work? I’d love to hear your thoughts in the comments.
P.S. — Did this analysis provide you with a breakthrough strategy?
If so, please consider making a one-time tip to support the deep research and analysis that goes into every Backstory & Strategy post.
Additionally, if you found this post helpful, please restack it and share it with your audience. This spreads the word and keeps me writing the types of content you enjoy.
This is a very thought-provoking piece. Thanks, Yoni.