Community or locally focused websites are just another kind of digital content niche -- and there are many ways for niche sites to earn revenue. In a new e-book, longtime niche news publisher Robert Niles explains how to make money from niche news. In a recent interview he explained how his advice can apply to local news and information.

In addition to being the founding editor of Online Journalism Review, Robert Niles also is the creator of Theme Park Insider which features consumer-oriented news and information about the world's top theme and amusement parks. He also created Violinist.com, a popular community site for violinists. Both of these projects are money-makers.

Most recently, Niles shared tips on how he earns money from these niche community sites (as well as how other successful niche sites make money) in a new e-book, How to Make Money Publishing Community News Online.

Here's what he had to say:

What can locally-focused community news/info sites learn from other kinds of niche sites?

Niles: All of principles covered in my book apply to local sites as well as any other kind of niche. Initially I tried to figure out principles that would be unique to hyperlocals, but community organizing is really the same whether your community is geographically or topically defined.

It all comes down to identifying a community need, then finding people who will pay you to meet that need.

The trick is, you need to find an ongoing community need or pain that you can help alleviate -- but not too completely or quickly! If you fix their problem completely, there goes your audience!

Once you identify the community need, then you can start courting potential funders. That's anybody who will write a check to underwrite the cost of your niche site: advertisers, foundations, perhaps even community members themselves.

This kind of strategy is important even if your site is not a for-profit operation. Nonprofit is not a business model; it's a tax status.

How can you identify community needs that will support a viable project?

Niles: The big mistake that a lot of people from journalism backgrounds make is that they frame stories in terms of issues (like the environment or education), not needs. When you catch yourself thinking in terms of issues, flip it around. Ask: What is the community need around this issue? What's the crisis or problem, and how will this affect people? Start your thinking with how people will use your information. Put your readers first in the process, not last.

For instance, if a local landfill wants to expand, don't just think about how to report the facts. Pose the relevant questions to spur community engagement. How could this expansion affect the community -- and might some parts of the community be more affected than others? Might environmental impacts from the expansion affect the health of some people or some parts of the local ecosystem more than others?

And balance it all by asking: Why are we doing this? Communities have to get rid of garbage somehow -- is expanding the landfill the best option? That's engaging, and that's important.

Stay on target. Niche sites need to be very vigilant that their filtering and reporting is helping to meet the community needs you identified. If you're just putting more information out there, you're part of problem, not part of solution.

Your site can't just be about presenting news, information, and facts. Today, nobody has a need for information -- we're drowning in the stuff! We need someone to filter that information, tell us what's important, and lead the conversation. Community members want to participate in the creation of the news and information they consume. Getting conversations moving is as important as publishing news and information.

How does focusing on community needs and conversations influence how a community site looks and works?

Niles: It can change your structure of beats or topics from what you initially envisioned -- and often that needs to happen. It also can affect the formats in which you present content. Does your community really want the web equivalent of 12-column-inch stories, or some other format?

Whatever the format, your stories should try less to tell all the information and serve more as a jumping-off point for conversations that move toward people's need for resolution. Think of yourself as a host of a conversation. Work with your audience to use your skills to elicit real stories, not just semi-informed opinions.

People care about facts and real world experiences. So when you pose questions, don't ask what your readers think -- ask what they've seen and heard. Keep your conversations grounded in reality. That's when your community will see your site as a real and vital resource. And that's what you need to have a viable business model.

This strategy led to the popular Accident Watch crowdsourced feature on Theme Park Insider. It also yielded commercial ad products on Violinist.com.

How can community sites connect better with advertisers and other funders?

Niles: Realize that it doesn't matter to advertisers how they access new audiences. But they like to know who they're reaching. When advertisers don't know who they're reaching, or funders don't know who they're supporting, they don't get excited.

Focus is crucial. Make sure you've sharply defined the community you want to serve. Don't just be a local general interest site. The more you can segment your community into neighborhoods or other relevant sub-niches, the more you'll find yourself in far better shape for attracting revenue.

People -- including advertisers and funders -- want to connect with passionate people. So really focus on building a passionate audience.

Quantify everything. If you're asking somebody to decide to cut you a check, you'll have to quantify an argument for doing that. Show them what specific benefit they'd be getting for spending $X on your site. Get your metrics tools in place, and understand what they are. My book includes a glossary that defines many key metrics terms.

I have some background in math and statistics, that helps. I've done random sample surveys, so I understand that process. That helps with audience research, defining your demographics and identify commercial activity in the topics you cover. We do readership surveys every couple of years, and that's incredibly valuable. We can tell funders and advertisers: "85% of people in this community consult our website before buying a product." That helps a lot.

Pay attention to when others are referencing you or talking about the things that your site has done. That will help you make a case to advertisers and funders that you're doing work that affects the community in a positive way.

How can you get started on a budget?

Niles: Do whatever is cheapest and gets you online quickest, even just a blog. Don't spend a lot of money on technology development. My son started his first blog when he was eight!

Once you get comfortable with the simplest blog format and engaging people online, then you can break out into other formats. Discussion forums are useful, there are lots of good tools to create them, and they're generally less intimidating in terms of participation than a blog. Just ask a question, and let people respond, and ask more questions. Create a ladder of engagement: specific steps to make it easier for readers to become participants.

If you hope to build a sustainable business model for your community site, you absolutely must engage your readers as creators and participants -- that's the only way to achieve the size and scale to make it commercially viable (even for nonprofit sites).

You want to meet the readers where they are. My wife teaches violin, and one of her favorite phrases is that you need to meet students where they are and guide them in a direction where you want them to go. So if people in your target community are on Facebook, your site needs a Facebook page where you engage under your brand name.

You can use your website to aggregate conversations across social media; that guides people to your site. But don't try to force people to go to your site! That's a common big mistake of mainstream media. If a reader wants to stay my Facebook page and never visit my site, fine, I'll take that. I'll still get some benefit from that. For instance, social media evangelists are part of your ladder of engagement. Invite people to share things that they find on the site. If people aren't excited enough to share things, you're not doing your job.

What kinds of people should you recruit for your core team?

Niles: I have section in my book on building an action team. That's a very early step, even before you plan for the site itself. Put people before the plan. Not just journalists -- include on your action team anyone you think can help build your community.

Expand beyond your own skill set, don't just duplicate effort. It's better to try to recruit people with a variety of skills that you don't have: technical, statistics, reaching out to related communities, etc.

You won't get the market penetration you need if you're not always reaching out to new segments of your community. To cover a community, you must be able to network with it. So build your social connections before thinking about revenue.

What gets in the way of community sites becoming financially sustainable?

Niles: Many community news/info sites are run by journalists, and journalists tend to have a lot of fear about money, and about soliciting people for revenue. That's a big theme in my book. It's important to keep in mind that you're not selling your editorial integrity or your worth as a journalist. You're selling your ability to connect with new potential customers or supporters.

Be clear about the role of editorial and revenue efforts in your site, how they can complement each other.

Advertisers want to know this is a business, not just a hobby for you. They don't want you do do anything that might jeopardize you ability to serve and reach they audience they value. They want to make sure your audience doesn't go away, because it's important to them.

The good advertisers and foundations, they usually care more about who you're reaching than what you're saying. Journalism ethics are critical, but you don't need to implement them in a way that prevents you from being a good publisher and running a good business.

Journalists also should embrace analysis, not just see their field as stenography. Data literacy is a huge theme in my book. Knowing how to work with data an analytics will make your site more useful to your readers. That's what will keep them engaged and passionate. If you can't unlock the passion, the money won't follow.

This blog is made possible by a grant from the John S. and James L. Knight Foundation.