Writing in the American Journalism Review, Barb Palser argues that the new breed of hyperlocal news sites may fall short of expectations because there just isn’t enough demand:

According to a survey by the Pew Research Center for the People & the Press, only 20 percent of American adults reported using digital tools to communicate with their neighbors or stay informed about community issues at least once in the past year. Only one in 10 reported reading a community blog at least once in the past year.

Palser’s pessimism intersects nicely with an observation I (and others) have been making for some time: that disengagement from civic life is among the most persistent problems plaguing the news business. It doesn’t matter how good a job your local weekly newspaper or website does of covering your community if you fundamentally don’t care about what’s going on in your community. Thus, in order to succeed, a news organization must foster civic engagement in a way that actually builds an audience for its coverage of governmental meetings, neighborhood events and routine police-blotter news.

Palser is right that community journalism is not a big-money business. It never has been. Two or three generations ago, local newspapers were marginal businesses owned and operated by people who were rooted in the community. We see the same phenomenon today with grassroots news sites, whether they are for-profit, like Baristanet and the Batavian, or non-profit, like the New Haven Independent.

In Eastern Massachusetts, we have an interesting battle under way involving hyperlocal sites operated by the the New York Times Co. ( the Boston Globe’s Your Town), GateHouse Media (Wicked Local) and AOL’s Patch.com. The competition is good for readers and good for job-seeking journalists. Yet I suspect that the ones who are in it for the long haul are those who are passionate about their communities, and are trying to figure out how to transform that passion into a business. A good example of this is the network of sites operated at CentralMassNews.com, which aren’t beautiful, but which are chock full of news and advertising.

Palser’s argument, essentially, is that hyperlocal is not a promising strategy for large media corporations to return to the glory days of yesteryear. I agree. But that’s not what hyperlocal is or should be about. It should be about finding news ways of doing community journalism and making a living.

And though local ownership is not necessarily the key ingredient, I think it’s much more likely that grassroots sites will foster the civic engagement they need to build readership than those operated by large, out-of-state media companies.

Further thoughts from Steve Safran at Lost Remote.