In Chicago, at least, much of the innovation in online local news is taking place at the neighborhood level.

That's the conclusion of a new study funded by The Chicago Community Trust and the John D. and Catherine T. MacArthur Foundation. "The New News 2012" ranks Chicago's top online news sites after reviewing their reach, engagement, and quality of content.

A key finding is that "The biggest diversity in sites, business models and news presentation is happening in neighborhood news, where online startups compete with weekly papers and efforts funded by foundations and nonprofits. Add to that innovation EveryBlock and the New Communities aggregator, and you see the most diversity in online news approaches in neighborhoods."

Emily Culbertson, who authored the Community Media Workshop report, added that the neighborhood sites also tended to have a greater diversity of news and information provided. 

"The neighborhood sites really experimented with old-fashioned news, aggregation, community-submitted items, video presentation and more. Unlike the metro sites, there wasn't a cookie cutter site in the bunch, in my opinion."

Culbertson said the neighborhood sites also tended to have higher quality community engagement, "with a particular emphasis on either publisher/reporter-to-reader engagement or at least reader-to-reader engagement, or on positively promoting user submissions.

"Though I cannot say that all of the sites we reviewed had high quality engagement, I somewhat subjectively feel like we saw better engagement on the community level across platforms, especially compared to the citywide sites, who tended to either neglect their readers or concentrate on promotion. EveryBlock has great community engagement at the neighborhood level, for example, and the local sites, while not uniformly featuring reader voices, do seem to care more about amplifying reader voices or listening to them."

Among the top-rated neighborhood sites were uptownupdate.com,  chicagojournal.com, and centersquarejournal.com.

Chicago Tribune was the top rated citywide news site, followed by Chicagoreader.com. But the report singled out #3 WBEZ as "as a site that follows its own news judgment in a civic minded way and uses the tools of the web well."

Among specialty news sites, the top-rated were catalyst-chicago.org, progressillinois.com, and chicagoreporter.com.

The report also found that the sites vary in their use of web and social media tools for storytelling, and, in general, online reader engagement was not of high quality.

This is the third extensive study of the Chicago news landscape by the Community Media Workshop. The work was launched by The Chicago Community Trust as a grantee of the Knight Community Information Challenge. (Disclosure: I have advised The Trust as a Knight Circuit Rider and was on the advisory committee for the 2012 report.)

The report hit an optimistic note about the emerging news landscape. 

"Today, alongside the prominent legacy sites on the web—testing the blend between hard news coverage, eye-attracting videos and photos, and celebrity-driven infotainment—are a feisty set of onlineonly sites attracting niche audiences at a growing pace. The communities served by these sites are getting more local coverage than ever before. There are still many coverage gaps, beyond the police blotter, among traditional under-covered neighborhoods beyond the police blotter, but the growth of smartphones and use of social media may be transforming even the way these neighbors now learn about what’s going on in their communities."

The report was released at a pre-conference in advance of Block by Block: Community News Summit 2012, Thursday-Saturday in Chicago.

The Community News 3.0 blog is made possible by a grant from the John S. and James L. Knight Foundation.