As newspapers retreat, small (and cheap) online operations are filling the vacuum.

By Paul Adams for iPolitics

Who launches a news outlet on eight days’ notice?

Jeff Elgie, that’s who.

In January of last year, the Guelph Mercury, which had been publishing since Confederation, was shut down by the company that also owns the Toronto Star. It left a metropolitan area of 150,000 without a daily newspaper and created an opportunity for Elgie. He jumped.

Elgie, a digital entrepreneur whose company, Village Media, is based in Sault Ste. Marie, already had a string of news websites across northern Ontario. His most established operation is, an online news website that boasts a news staff of 12 — more than its main competitor, the Sault Star, a daily newspaper owned by the teetering Postmedia chain.

Because his existing websites use a common structure and branding, when the shutdown of the Mercury was announced, all he needed to do was snap up two of the better-known journalist-refugees from the Mercury and add some freelancers.

Hey! Presto!

In a phone interview with me, Elgie said that GuelphToday — now in its second year of operation — costs about $300,000 a year to run and is taking in about $200,000 in revenue. He is happy with its progress towards profitability. Like all his news sites, it is supported 100 per cent by advertising.

The significance of GuelphToday from a public perspective is not that it was instantly a satisfactory replacement for the newspaper, which had eight editorial staff at the time of the shutdown. Its significance lies in how it shows that, as the old models of local news collapse, there may be opportunities for something new. That’s why Elgie’s operation was the subject of a passage in Shattered Mirror, the Public Policy Forum’s recent report on the state of the Canadian media.

Digital news startups have grabbed our attention because, with the exception of Toronto, the print dailies in most of our largest cities are run by Postmedia, which is unlikely to survive much longer in its current form.

If you look at GuelphToday, it relies heavily (too heavily, I am sure, for most reporters’ comfort) on unedited press releases from official sources, such as the police and Environment Canada. It’s obvious that, for now, it is building an audience in part by being a community bulletin board.

But it also offers traditional news, like this story about a town hall meeting the mayor held with local students. Within its limited resources, GuelphToday is trying to perform some of the civic functions of a traditional newspaper.

Elgie said that, as with all his outlets (he runs similar sites in Timmins, North Bay and Barrie), he will add editorial staff as his revenue permits.

Almost all the traffic to Elgie’s sites is for local news, notices of local events and obituaries of local people, proving there is an appetite for all things local even in the age of Facebook and Google. That’s the key to site’s advertising strategy, which is built heavily around local car dealers, real estate sales and classifieds.

How applicable is this model to the larger cities dominated by Postmedia? Elgie said he thinks about the potential collapse of Postmedia every day.

In 1971, when the Toronto Telegram shut down, a number of its former journalists marched down the street and managed to put out the new tabloid Toronto Sun within days. For decades it was a commercial success, spawning a national chain that was recently absorbed by Postmedia.

Elgie said that, in principle, if the Ottawa Citizen and Ottawa Sun (both now Postmedia papers, running out of a common newsroom) suddenly disappeared, he could have ‘Ottawa Today’ up and running inside 24 hours. Because the digital platform is standardized, and much of the copy-editing and ad sales are centralized in the Sault, all he needs is reporters to start reporting.

Still, he’s not entirely certain his model would transfer as well to a large city as it does to the relatively isolated communities in which he now works. Each of them has a strong sense of community and — crucially — lacks intense media competition. He says the CBC is not a significant player in most of his current markets. Nowadays, the CBC is one of the dominant local news entities in most large cities.

Among Elgie’s sites, the one that struggles the most is the one in Barrie, a town whose proximity to the GTA may mean that its community ties are not as deep. And there is more competition there from the Postmedia outlet, the Barrie Examiner, as well as strong radio and TV outlets.

In some cities, such as Sudbury and Thunder Bay, Elgie has partnered with existing news outlets to broaden their digital reach and leverage the technical and sales capacity of his shop in the Sault.

Roy Thomson, who became the 1st Baron of Fleet and one of the world’s greatest media moguls, got his start with the Timmins Daily Press, which he purchased for $200. He went on to own the Times of London and the Globe and Mail, among many other properties.

It would be crazy to suggest that the next media motherlode will also be found in Northern Ontario. But when I asked Elgie where he plans to go next, he had an audacious answer:

“Wherever the next daily fails.”

This story was originally published on iPolitics, and is republished here with the editor’s permission.