The latest in journalism seeking viable revenue models in the digital age: Village Voice versus Yelp

By Richard Nieva , written on February 25, 2013

From The News Desk

If the Voice Media Group (VMG) has its way, the next time you're out in, say, New York and looking for a good restaurant nearby, you'll pull out your phone, swipe right past Yelp, and tap on the Village Voice's app.

VMG, which owns the Village Voice and 10 other alternative weeklies including the LA Weekly and Miami New Times, today announced the re-launch of each of the 11 papers’ main apps. They have a new user interface and emphasize finding local content, like restaurants, bars and clubs. The ability to find nearby listings was available in the previous versions of the apps, but the filtering options in this version bring them to the forefront. For instance, you can now filter by neighborhood.

VMG also introduced a tablet-only app called Pictureshow, which organizes all of the slideshows from Voice Media papers and puts them all in one place. For example, if the Voice covered a concert in New York, the photos from the story can be viewed on Pictureshow in high-res.

But the more interesting announcement is the apps relaunch and the implications it has as a revenue source for VMG. The relaunch essentially puts the company in more direct competition with Yelp. (Last month, I wrote about how VMG had already drawn the battle lines with the local listings company over use of the “Best of” label.)

It’s an audacious fight to pick, as Yelp is far more the incumbent on local search that VMG, despite the Village Voice’s storied history. VMG's local content, for now, is also only in its 11 coverage cities, while Yelp is international. But CEO Scott Tobias says he thinks readers will come to the VMG apps based on the reputation of its professionally curated content and expertise on the local scene, written by the papers' staff.

While that may attract some Voice devotees, it’s unclear if it will attract the casual user. Tobias says VMG has been doing campaigns with street teams and guerilla marketing to hook those who don’t have an attachment to the Voice cache. In the end, though, it will come down to utility, and it’s hard to bet against Yelp there. Even if, on its best days, the Voice has its pulse on the zeitgeist, and nails it in terms of recommendations, is that really more convincing than a network of millions of Yelpers distilling a choice down to one to five stars?

Of course, if VMG conceives of a business model that rakes in cash, the conversation about Yelp would be moot. Stacy Volhein, VMG’s director of digital operations, explained some of the mechanics of the apps’ economics. Aside from the standard banner ads, local businesses or event promoters can also buy space for sponsored content and have their results pushed to the top of a results list, says, of nearby restaurants. The company would not go into specifics beyond that.

One edge that Tobias points to is the fact that VMG has been doing local listings for longer than most, which he thinks separates his company from those littering the path to hyperlocal success, like Patch. “We’re not trying hyperlocal,” says Tobias. “We are hyperlocal.”

Of course, being there before a competitor is no sure thing. Just ask Yahoo and MySpace. But I did meet with another company recently that could give cause for cautious optimism: YP Holdings, which stand for Yellow Pages. (It took me embarrassingly long to notice what the initials stood for, but that is partially by design. It rebranded.)

The two companies, in a broad sense, have a lot in common: two beloved brands highly regarded in local content forced to navigate the digital straits. YP released some impressive data today, boasting $350 million in annual ad revenue attributed to mobile. That makes the company number two behind Google, according to IDC.

The comparison is not completely parallel. YP, as a company, has been through a number of iterations before it took the form it has today. In fact, it actually considers its founding date as April 2012, because that’s when the holding group was formed to take over the tanking print phonebook business from AT&T. Still, CEO David Krantz says the success of the digital operation stems directly from the old school print business, and its 600,000 customer relationships.

Of course, VMG has the added weight of having to subsidize a journalistic business, which makes it all the more treacherous. But in the age of print dinosaurs keeling over, it’s good to see one like YP that has evolved. Even if its success is only tangentially applicable to media outlets and their woes, it’s certainly something to try and emulate.

If a journalism company like VMG can become as effective a mobile advertiser as a company like YP, it could do a great deal of work in finding a sustainable revenue model. But user acquisition is a tall order, especially when Yelp has become the go-to for many people when it comes to local search. The Voice will need to prove that its "Best of" is really the best of.

[Image courtesy: stan]