TBD.png TBD.com went out with a whimper, not a bang. In February 2011, just six months after going live, the Washington, D.C., area’s high-profile experiment in local online journalism announced that it would lay off half of its editorial staff, detach its site from its TV-station partner, and reinvent itself as a culture-and-lifestyle site. Many of those who did stay on looked for the exit as soon as they could line up another job.

The reshuffling—which followed the departure of Jim Brady, the former Washington Post online executive brought in to launch the site—marked the meaningful end of one of the best-funded and best-pedigreed efforts to make professional journalism work online. The site, whose name stands for To Be Determined, had drawn a great deal of attention for the quality of its editorial staff and for its use of social media. Clearly there was an important lesson here for other news sites, especially those plying the local or “hyperlocal” trade.

Just what that lesson was, though, is in dispute. Does TBD’s failure prove that “hyperlocal journalism is more hype than hope,” as media analyst Alan Mutter put it? Or did it mainly signal a failure of nerve on the part of corporate parent Allbritton Communications, whose CEO, Robert Allbritton, had pledged to provide a three- to five-year runway to profitability?

It is clear that the site was, as expected, losing money, despite impressive traffic growth. According to coverage in The Washington Post, unique visitors to TBD.com had risen from 715,000 in November 2010 to 838,000 in December and 1.5 million in January 2011. But, as the incoming head of the site told the paper, “It was still not generating enough [income] to offset the hefty costs.” Two insiders interviewed for this report said the January traffic spike was not as striking as it looks, because much of it consisted of people looking for information on the region’s heavy snowstorms that month.

Nobody involved has revealed the precise size of TBD’s losses. Saul Carlin, an Allbritton executive involved with TBD from the start, would say only that “traffic and revenue were being closely monitored. As a result, a change in management was necessary.”

Brady says the picture was not that grim. The site had been budgeted to earn revenue “in the low millions” in year one; he argues it was on track to reach perhaps 75 percent of that goal. “The situation wasn’t great when I left, but it wasn’t catastrophic either,” he says.

Mutter, a former journalist and media executive, took the shortfall as a demonstration of a fundamental misalignment between the expense of producing local reporting and the potential online revenue from it, because of the built-in constraints of small audiences and puny ad rates. Various hyperlocal flameouts support this thesis: among others, Backfence.com; The Washington Post’s Loudoun Extra; and the shuttered New York Times site for suburban New Jersey, whose audience was handed off to local startup Baristanet.

Still, mistakes were made. Brady has said repeatedly that resistance from the site’s broadcast partner WJLA, the Allbritton-owned ABC affiliate in Washington, proved a major hurdle. Both Brady and Steve Buttry, TBD’s director of community engagement, said the TV staff was unhappy to see its website rolled into TBD.com—which linked out heavily to other media outlets—and that the station failed to promote TBD wholeheartedly on the air.

“The first time we linked out to another TV site, that was a major collision,” says Buttry. He adds that TBD linked out more moderately after that and gave the TV news staff a “heads-up” when it planned to point to a story that WJLA had missed. “The lesson from our experience is that the legacy culture is powerful and ingrained,” he says. “Whenever its revenue stream might be endangered or disrupted, it’s going to have a big influence on decisions.”

The most important example of that influence was the decision to fold TBD’s ad sales staff into WJLA’s, which led to the departure of the small digital sales team that Brady had assembled. “Selling digital is hard. I was adamant that the only way to be successful was to keep the sales force separate,” he says. The tension was visible from the start, Brady adds; an example is an ambitious launch sponsorship of more than $75,000 that his sales team planned to pitch to a local car dealership. WJLA intervened, arguing that it would damage a valuable relationship between the dealer and the TV station, Brady says.

“When I was at the Post, we were routinely doing six-figure online deals,” Brady says. “If the sales force itself doesn’t believe digital is worth it, how are they going to sell it? To just assume nobody would ever spend that much online is insecurity with your own inventory.”

Bill Grueskin, Ava Seave, and Lucas Graves are the co-authors of "The Story so Far: What We Know About the Business of Digital Journalism." Grueskin is dean of academic affairs at the Columbia University Graduate School of Journalism. Seave is a principal of Quantum Media, a NYC-based consulting firm. Graves is a PhD candidate in communications at Columbia University. For further biographical details, click here.