Another reason community papers hold up fairly well is that they’ve historically been able to pay lower salaries for editors and reporters. Many hire entry-level staff, but Olsen said The Times/Review Newspapers has recently been able to attract a number of seasoned journalists laid off by larger dailies who were willing to accept less than “top dollar.”

Olsen’s papers are subscription-based, but some community newspapers are free and rely mainly on advertising revenue, such as the San Diego Community News Group, which publishes separate papers for five San Diego neighborhoods.

The group’s publisher, Julie Hoisington, said that her papers generally have no problem attracting targeted ad buys for tony neighborhoods—particularly from real estate brokers selling expensive beachfront property or high-rise condominiums in San Diego’s downtown. Even with the hit businesses took because of the housing bust, her company was able to break even because the papers cut their pages from 40 to 24 to match falling ad buys. Readers, who get the paper for free, didn't complain.

“When the going gets tough, we always fare better than the bigger papers because we have more flexibility within our model to cut expenses,” Hoisington said.

Scott Hettrick in Arcadia, California, is trying a newer model: an online-only publication, with video content that he produces himself. Hettrick started ArcadiasBest.com in 2007, and has recently posted videos featuring local figure skater Mirai Nagasu, who is competing in the Winter Olympics, and actor Henry Winkler, discussing his Hank Zipzer children's book series. “Judging from Google Analytics, the videos are probably the most looked-at things on the site,” Hettrick said.

Hettrick, who sends out 3,500 email newsletters each week promoting new content, expects to post a profit this year and by next year fully recoup the roughly $25,000 in startup costs for the site and his video equipment.

Michael Ray Smith, a professor of communication studies at Campbell University in Buies Creek, North Carolina, said that the local connection remains the principal selling point for community papers, because it's something that can’t easily be replicated by larger competitors. Smith lives in Dunn and holds up The Daily Record as a prime example.

“There is a real sense of community with this paper—it’s very grassroots and a lot of people’s voices are heard,” Smith said. “The bigger papers are going to hyperlocal, but this kind of paper pioneered it, and people here feel like it’s really their paper.”