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Why online news sites keep failing

After staff cuts at regional newspapers reduced reporting in Davidson County, N.C., veteran journalist David Boraks in 2009 started an online site to fill the void. Last month, Boraks shut it down, telling his readers, "Alas, we haven't turned it into a sustainable business."

The demise of is far from unique. One of every four news start-ups has failed, according to a survey I conducted.

My methodology was simple. I looked up all 141 ventures listed in the Columbia Journalism Review's Guide to Online News Startups, which dates back to 2010. Then I counted the number that either were defunct or had not published any new content since 2014.

Because CJR depends on entrepreneurs to list their efforts, not all start-ups — or eventual crackups — are included. But the CJR sample is big and diverse enough to alarm anyone who cares about the future of news, and especially those who hope that grass-roots digital efforts eventually can replace traditional local news-gathering operations.

There is nothing less than a crisis in local reporting. Newspapers still employ more than half of the 70,000 journalists covering local affairs in the United States, according to the Pew Research Center. Yet, since 2000, the nation's newspapers have eliminated one-third of newsroom jobs, according to a survey by the American Society of News Editors. The cutbacks result from a dramatic and traumatic drop in newspaper advertising revenues, which have plunged by more than half since hitting an all-time high of $49 billion in 2005.

The absence of local coverage is evident in places like Davidson County. "At many town meetings, I am the only reporter (and sometimes the only citizen) in the room," Boraks said when he launched his site six years ago. Now, it's unlikely he will regularly attend those meetings. Who will keep tabs on public officials? joins such idled efforts as A2 Politico in Ann Arbor, Mich., which has not been updated since 2013, and Yadkin Valley Sports in North Carolina, whose Web address leads to a place-holder site with no content whatsoever.

The toll of the departed also includes such high-profile, well-funded and ill-managed ventures as the Chicago News Cooperative and the Bay Citizen in Northern California. A late-breaking addition is the Bold Italic, a recently discontinued effort in San Francisco that had been funded by Gannett as a digital innovation laboratory.

Although my survey did not delve into the circumstances contributing to the demise of each of the various news ventures, the cause of death in most cases likely was the one cited by Boraks in his farewell message:

"We've been unable to sell enough advertising to local businesses to sustain the sites, to pay me and, lately, to pay our staff. At the same time, voluntary support from readers — which has always been limited — has dropped off."

Of course, far more new businesses fail than succeed, including start-ups in such cash-rich fields as technology. But many news ventures are handicapped because they focus less on developing viable business models than on the cherished journalistic mission of afflicting the comfortable and comforting the afflicted.

The Pew Center found that nearly a third of news start-ups spend less than 10% of their staff time on business development, while more than half say such activities occupy between 10% and 24% of their time. By contrast, 85% of the ventures say editorial tasks consume at least half of their time.

Unless and until people running news sites take the business of their businesses as seriously as they take their journalism, the failures will continue.

Of course, the failures could continue anyway, because the most intractable problem for news ventures may be a hopeless reluctance in the marketplace to pay for what journalists do.

Although Boraks, for one, clearly was intent on building a sustainable business, he could not generate enough support among readers and advertisers. Even dedicated journalists can't afford to work for nothing. As rewarding as his start-up experience was, Borak signed off his news site by saying: "We're in debt, we're exhausted and it's time to go."

Alan D. Mutter is a former newspaper editor and Silicon Valley chief executive. In addition to teaching at UC Berkeley, he is a strategic consultant to global media companies.

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