Lessons from a .com, geo domain, hyperlocal meltdown

Me covering the Olympic torch relay for Kelowna.com (Photo by Sean Connor)

By Adrian Nieoczym
adrian@nieoview.com

After 10 months, millions of dollars in losses and a bundle of crushed dreams later, an audacious experiment in online journalism is coming to a close. Last Friday, the five remaining editorial staff at Kelowna.com got their one week layoff notices and while a skeleton crew may keep the site going after this week, it will quite different from the product launched last June.

Even though it has been obvious for some time that this day was coming and I was already on the outside looking in, having been laid off from Kelowna.com almost two months ago, I was sad to hear about its demise.

It was a bold venture at a time when the vast majority of media companies were taking a timid approach and it held out the hope that it might actually be possible to do good journalism and make money doing it. Its failure makes that dream seem just a little farther away.

However, for all its shortcomings, I still think Kelowna.com was a valiant –though ultimately misguided– effort and lessons from its rise and fall can help contribute to the development of a much needed new business model for delivering online news.

So with apologies to former colleagues who might see this quickie post mortem as the rubbing salt into still fresh wounds, I offer a few, somewhat jaded, insights from my time at Kelowna.com.

In the beginning

The first half of 2009 was a bleak time in the North American news business. A flood of bankruptcies, downsizing and job losses inundated the industry as the recession and an inability to make money from the web pushed many traditional media outlets out of business and others onto life support.

Kelowna was no different. Local businesses reacted to the recession by cutting back on advertising and the local television station (CHBC), daily newspaper (Daily Courier) and tri-weekly community newspaper (Capital News) reacted to the loss of revenue by cutting staff and diluting their content.

At the time I was a reporter at the Capital News and while I survived the initial cuts in late March, it was made clear that my seniority put me next in line should the axe be yielded again.

Then suddenly, out of the gloomy fog, stepped an apparent saviour. Word quickly spread. A couple of businessmen flush with cash made from the buying and selling of Internet domain names, were launching a brand new news website. They hired a local freelance journalist, Marshall Jones, as their managing editor and let him go out and hire seven reporters.

It seemed too good to be true. I applied to Kelowna.com and was offered 10 per cent more than I’d been making at the Cap News. I made the jump and suddenly I was part of one of the largest and most creative newsrooms in town. All the reporters were equipped with MacBook Pros, iPhones and Nikon D5000 SLR cameras capable of shooting high-definition video, giving us the ultimate in mobile reporting technology. And then as if that wasn’t enough, a couple months after we launched, ownership leased us a fleet of Smart Cars.

And while we had a lot of growing pains on the editorial side, my (admittedly biased) opinion is that we largely delivered great content and raised the standards for news in this town. We routinely broke stories and provided some of the best, most comprehensive coverage of what was happening in the community.

Our competitors certainly noticed what we were doing and I think what they saw compelled them to up their games as well and produce better work in their effort to beat us.

But unfortunately, despite what we produced, we never attracted the hoped for readership while the company burned through its cash at far faster a rate than was expected. I’m not sure exactly how much money was sunk into Kelowna.com but I know it was at least a couple of million dollars and in the end the owners couldn’t sustain the losses.

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