Florida-based Out2 publishes 13,400 hyper-local online newspapers across the US combining professional reports with content submitted by users. Citizen reporters are paid $5 for each report and sites are supported by local advertising which, Out2 believes, is a market that still has potential for significant growth.
Each site combines national stories with local relevance - a hybrid content model that is essential for community news sites, according to Out2 CEO Bob Leonard.
"Newspapers can't do this because it doesn't make financial sense to let the public talk to the public - if they do that on their site they have a product that competes with the newspaper," he said.
"But conversation is what it's all about and by 2020 this will be the way people get their news. The community has the ability to talk back to the newspaper."
City areas are divided into smaller villages and each Out2 territory is marked out so that franchises can work with, rather than compete with, neighbouring Out2 sites. New York City has around 30 different editions and although Out2's newspapers are virtual, a physical presence in the community is important.
Paid citizen reporters
The $5 incentive for citizen reporters was launched last week.
"No-one will make a living from it, but people want to be recognised and rewarded for their work," he said.
Contributors who can write about their experience being caught up in a big news event would be paid substantially more. The quality between professionals and "the second tier" is negligible, he said. The move towards more conversational news and a more inclusive industry meant that professional journalists have been "pushed off the pedestal".
Covering a local children's football game, for example, could be done well by parents of children of both teams.
"How do you know that that mom doesn't have a college degree in English?" he said.
"Journalists are often very defensive when they feel like their jobs are being threatened - it eliminates their own objectivity."
Registered citizen reporters post material straight to the site without editing, and the site does not label user-generated content.
"If people do question me on terrible writing, I say: 'this is what citizen journalism looks like'.
"If we allow someone to publish something in the opinion area of the newspaper and want to make it true to freedom of speech, we have to publish as it is. But just because you don't have great spelling doesn't mean you don't have an opinion."
Newspaper revenue is increasingly threatened by the growth of local online classified advertising services such as Google Base and Craigslist that allow nearly all browsers and advertisers to post for free.
"Google and Craigslist are helping to tear down some trees in front of us," he told journalism.co.uk.
"The classified business has already gone for newspapers and may well already be gone for us too, but the future will be in new models like Craigslist.
"It won't come from newspapers developing a new classified business."
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