Mike Orren launched Pegasus News in 2006 with the idea that local neighborhood news is more important “than things happening on the other side of town.” Now the site covers what appears to be every neighborhood in the Dallas Fort-Worth area. Although Pegasus has gone through some corporate turnover, it is now owned by Gap Broadcasting, which runs 116 radio stations in 24 markets. That alliance has Pegasus poised for an expansion. We spoke with Orren late last month.
Pegasus News was founded around local news, but you don’t like the hyperlocal tag. Can you tell us why?
We launched at the time when hyperlocal was at the peak of being a big buzzword and we were sort of lumped in with that movement. But, I actually don’t believe there is a business model with hyperlocal. What we went after is what I call pan local.
You’ve got to have the hyperlocal neighborhood information in the context of what’s going on in the larger market. There is such a finite universe of people in a specific neighborhood that care enough to go out of their way to look for information and news about where they live, that universe is not enough to sell advertisers. But if you can put that in the context of ‘where am I going to go eat tonight, what’s going on locally in niche areas of interest that I have,’ that’s an opportunity to bring a lot more people into the fold. Then when you put neighborhood information in front of them they’re more likely to engage with it.
We cover all of Dallas-Fort Worth, but then we slice it up for the user geographically and behaviorally based on information that we gather from your clicks around our site.
We are not covering any one neighborhood at near the level of specificity that say a West Seattle Blog is. Though, there are some niches in those areas that we probably cover in that depth.
Still, local news is key to your editorial model. What is the plan for Pegasus News if the daily newspaper goes away?
A database of local political campaign contributions maintained by Pegasus News staff.
Even though The Dallas Morning News isn’t going away tomorrow, we think they’re going behind a paywall soon. On the one hand, it’s a great opportunity for us to fill a void, because I don’t believe a substantial number of people are going to pay for that content. The flip side is it’s very expensive content to produce.
My view is that ten years from now you’re going to see more good real useful local news coverage than at any time in our history. But, between now and then there is going to be something of a dark age. Say the Morning News quits covering city hall. We haven’t yet grown enough to have people covering city hall. I believe there comes a point where the models cross and Pegasus or a network of blogs become sustainable to fill that void and even surpass it.
The question becomes what happens during that interim period. I tell people all the time, if I were a small local government person who wanted to pull some shenanigans I would do it in the next three years. Seriously.
When we launched I set out to truly be a replacement for the daily newspaper but the revenues aren’t there to sustain that. I would rather live and get our shots in and grow into that over a long period of time than kill ourselves and try to do something beyond our grasp.
What obstacles on the revenue side prevent you from taking that bigger role now?
The biggest obstacle for us on revenue has been brand awareness in the local marketplace. We’re pushing 500,000 monthly unique visitors. That is enough to sustain a business. The problem is we’re just now getting over the hump where we know when we go to talk to someone about advertising that they’re going to have even heard of us. That’s starting to change but it’s taken a long time.
We’re getting ready to launch sites in some of Gap Media’s markets. They own a bunch of the old ClearChannel staions, all in markets smaller than Dallas-Fort Worth. So, we will launch in Shreveport, Tyler and Yakima this year. We’ll have them on air constantly promoting us and their experienced sales staff out selling us.
First we’re doing a redesign, relaunch of Pegasus that will serve as the template for all of the sites to come. The database stuff is going to be done here in Dallas and we’ll have one person on the ground creating content in those markets.
Where do your revenues come from?
It’s all advertising, a combination of display, sponsorships, and direct marketing. A big part of our model is the ability to customize behaviorally and geographically. We’re able to sell ad campaigns that are very targeted. So even though it looks and feels like a display ad, there’s a lot more going on behind it.
We do some direct e-mail; some of our email blasts are ridiculously small. For instance, say you are FC Dallas and you want to push a ticket special for the game this weekend. We’ll send an email only to the 220 people who’ve shown an interest in FC Dallas based on their clicking patterns on our site.
We also have geo-located mobile ads on our iPhone app. Our app is much more transactional than news, so it lists garage sales, restaurants, concerts, gyms. We’ll show a sponsored listings based on where the user is.
How much did the app cost to develop?
It’s hard to say because we developed it internally. It took two developers three weeks. It’s a very simple app. We’re starting to look at some of the iPhone 3.0 possibilities and that will cost us some money if we go forward.
How well has the iPhone app gone over with advertisers?
Really, really well. They’re very excited about it. I don’t think we have anybody running who’s just running mobile. Generally they’re doing it as an add-on. But when we tell them we’re going to reach out to everyone in a 3-mile radius of your business, they’re like ‘that’s awesome.’