This is what happened when Craiglist and later Facebook cannibalized classified ads in the US; many local and hyperlocal newspapers disappeared because they were not big enough to attract major advertisers, but all the local ones left. Yet Craiglist provides no news at all and Facebook aggregates news but certainly doesn't produce any, and especially not at the local or hyperlocal level.
> Cities where newspapers closed up shop saw increases in government costs as a result of the lack of scrutiny over local deals, say researchers who tracked the decline of local news outlets between 1996 and 2015.
> Disruptions in local news coverage are soon followed by higher long-term borrowing costs for cities. Costs for bonds can rise as much as 11 basis points after the closure of a local newspaper—a finding that can’t be attributed to other underlying economic conditions, the authors say. Those civic watchdogs make a difference to the bottom line.
> https://www.bloomberg.com/news/articles/2018-05-30/when-loca...
That seems like a pretty big downside.
The issue is that the current players are unable to solve that part properly.
In my country, it was impossible to book a cab with an app before uber came.
Yesterday, I tried knowing if my insurance covered some dental cost, and I was unable to sign up or login on the website, I had to call a human to book an appointment to a brick and mortar store. This is the biggest insurance provider in a western european country. I'll take the new "startup" as soon as it comes, just because they make 80% of what I need convenient enough. They can deal with the remaining 20% later, currently my 80% needs are not served.