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Like ice cream, holidays, and babies everyone loves the concept of local control and dotNeighborhoods. But finding a sustainable business model will determine if they are a civic dream or a force that moves residents to a more livable and prosperous city. Here we present a model for their operation, beginning with a look at potential revenue streams.

Revenue

Making dotNeighborhood domain names a success requires a business model with predictable revenue sources. dotNeighborhood operations have several potential sources.

Domain Name Revenue

An obvious sources of revenue arrives from the sale of domain names. To realize this revenue, dotNeighborhood operators will need to establish a relationship with a registrar. Name sales provide revenue from the initial sale and an annual revenue stream from renewals. Second level domain names can be sold to every business.nyc, idea.nyc, cause.nyc, and person.nyc in the neighborhood.

Another source of domain name revenue can be realized from “third level” name sales, e.g., Restaurants.JacksonHeights.nyc. Here’s how that works.

On the south east corner of 74th Street and 37th Avenue in Jackson Heights, there’s a small pizza parlor named Pizza Boy. It’s open daily from 10 AM to 11 PM, has two full time employees, with deliveries available. Here’s a look at PizzaBoy through the lens of fully developed  JacksonHeights.nyc dotNeighborhood. Pizza Boy would be listed in six locations on the .nyc TLD.

  • PizzaBoy.nyc – Its initial domain name purchase would be the second level name, PizzaBoy.nyc. This would cost the proprietor about $40 per year.
  • The Pizza.nyc Portal – Purchasing PizzaBoy.nyc would entitle the restaurant to three listings in the the Pizza.nyc second level domain name – in the alpha, neighborhood, and map directories.
  • PizzaBoy.JacksonHeights.nyc – This third level domain name would be made available of the operator of JacksonHeights.nyc. Price to the parlor’s proprietor $20 per year.
  • Pizza.JacksonHeights.nyc – Purchasing the third level domain name PizzaBoy.JacksonHeights.nyc would entitle the restaurant to listings in the alpha, neighborhood, and map directory of the Pizza.JacksonHeights.nyc site, for an additional $10 fee of  per year.
  • The Restaurants.nyc Portal – By virtue of PizzaBoy purchasing either name it would be entitled to being listed in the Restaurants.nyc portal, in the alpha, neighborhood, and map directories.

Note: The above presumes that the premium domain names pizza.nyc and restaurants.nyc are sold with Public Interest Commitments (PIC) that require arrangements as described above, and the the PIC requirement has not yet been accepted by the city administration. (See more on PICs here.)

Adverting Revenue

A 2009 article Can Anyone Tap the $100 Billion Potential of Hyperlocal News? detailed plans AOL and the New York Times had to capture local advertising revenue in Maplewood, New Jersey. While these efforts did not succeeded as expected (see this NYT article), the potential remains for revenue to be generated by neighborhood sites. It’s hoped that keeping that revenue local will benefit mom and pop stores and provide sustaining revenue for the dotNeighborhoods.

In the below we’ve taken a snapshot of one city neighborhood’s economy (Connecting.nyc Inc.’s home, JacksonHeights) to see how a dotNeighborhoods built-out might provide advertising revenue. Here’s a sampling using third level domain names.

  • Arts.JacksonHeights.nyc – This intuitive domain name would provide an arts directory and calendar of local activities. It will not be a big money maker, but the Jackson Heights Art Club, local movie theaters(?), film festivals, restaurants with entertainment or art exhibitions will be better able to reach local residents. In addition to the venues, art instruction and supply providers might find it profitable to pay for prominent links.
  • Gov.JacksonHeights.nyc – Go here to connect with local civic organizations, elected representatives, the community board, and how to fit in with city processes. This will be maintained by the operator and residents, wiki-style, with donations sought.
  • Schools.JacksonHeights.nyc – This site will be frequently viewed by parents and adults needing training or education. Teachers offering their private tutoring services, those with products to sell, and schools will pay to have links on this page.
  • Restaurants.JacksonHeights.nyc, Bars.JacksonHeights.nyc – These pages will be frequented by those looking for local restaurants and bars. With a neighborhood map and an alpha and cuisine search capacity, theses pages will benefit both residents and visitors. Think of it as a sales channel that keeps ad revenue in the neighborhood rather than sending it to Yelp, Facebook….
  • Pizza.JacksonHeights.nyc – Hunger for a slice? Say “Pizza in Jackson Heights” to your phone and see a map with rated pizza parlors. Residents will learn to look for links to parlors offering specials. Every pizza parlor will pay for a link on this page. Restaurants which purchase a third level domain, e.g., PizzaBoy.JacksonHeights.nyc, will be listed in the restaurants.JacksonHeights.nyc and Pizza.JacksonHeights.nyc pages and listed – on the maps, and in the alpha and cuisine lists.
  • RealEstate.JacksonHeights.nyc – Local agents and residents can create a trusted space for locating real estate, reducing the fears of dealing with an unmoderated entities like Craigslist.com..
  • Furniture.JacksonHeights.nyc, Hardware.Jackson Heights.nyc, Psychiatrists.JacksonHeights.nyc, Optometrists.JacksonHeights.nyc, Doctors and Dentists.JacksonHeights.nyc, Drugstores.JacksonHeights.nyc and dozens more trusted sites guided by local moderation can be a godsend for residents and visitors alike.

Additionally, “meta” domain names would be provided such as index.JacksonHeights.nyc and retail.JacksonHeights.nyc.

Notes:

  • While the general model imagines a sales person per neighborhood, there will be instances where smaller and lightly retailed neighborhoods are unable to sustain one. In such instances an adjacent neighborhood agent or a city-wide agent would address the local needs. (See Revenue Balancing below.)
  • Domain Name clouds will be issues to guide those entering Eyegalsses.JacksonHeights.nyc and Optometrists.JacksonHeights.nyc to land on the same page.
  • The stewards for the neighborhood site, e.g. JacksonHeights.nyc, will decide if a third level domain name is to be assigned to a local or a city-wide agent. Additionally, they will decide the if and how national product advertising contributes to the local revenue pool, with sales to these entities facilitated by third parties. We advise accepting such non-local ads but always giving presentation prominence to the local.

A successful local advertising campaign would provide two key advantages:

  • It would provide revenue to sustain the operation of the dotNeighborhood.
  • It would keep local ad revenue in the neighborhood, a fundamental economic development practice.

Other Revenue

Early support should be provided by donations, government and foundations grants, and good old fashioned bake sales.

Revenue Balancing

SoHo.nyc, GreenwichVillage.nyc, TimesSquare.nyc – these dotNeighborhood names provide the potential for significant revenue. Others such as Longwood.nyc have little local retail and little apparent likelihood of economic viability.

If we look for a parallel situations we might find one in the world of baseball. There the leading team in terms of value is the Yankees, valued at $1,700 million, and the least valuable the Pittsburgh Pirates at $304 million. As per Forbes: “Thanks to more than $400 million sent from high-revenue to low-revenue teams, several teams with low attendance were able to post operating profits of at least $10 million.”

And we might add, the revenue balancing provided the Yankees with teams to play in a competitive environment, making baseball worth watching.

We need a similar revenue balancing plan for the dotNeighborhoods, a way to move adverting revenue from UpperWestSide.nyc to Longwood.nyc.

Operating Costs

Expenses associated with operating a dotNeighborhood can vary widely. A volunteer supported with a simple WordPress host system can be offered for under $1,000 per year. A far more sophisticated one capable of connecting the world to SoHo.nyc or TimesSquare.nyc could require several hundred thousand to develop and maintain.

 
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