The sad-spin headline might be this: “Dreams of 2,000 journalists crushed.” But when you have nearly 2,500 applications for what at most will become a few dozen Knight News Challenge grants, there’s necessarily plenty of disappointment to spread around.

I talked with Jose Zamora, who works on journalism programs for Knight, recently to get an update on the most high-profile competition in the future-of-news space, which is in its cutdown stage. This year, Knight received 2,489 applications, roughly 35 percent of which were in the open category. (This year, Knight gave aspirants the choice to keep their applications private during the judging process or to make them open and readable to the public.)

Zamora said that number is now down to around 500, after the first round of winnowing. (There are 222 left in open, with the remainder in closed.) Each of the surviving applicants was asked to submit a full application — more than just the precis they submitted initially — and a panel of judges is currently reviewing those full apps. “Our goal is to review all of them by the end of the month,” Zamora told me, at which point the field will be narrowed again to “50 or 60 projects.”

Those will be put before a new panel (“with fresh eyes”), which will do another round of narrowing on March 31. After conversations with the applicants still standing, a final group will be recommended to Knight’s board in June. The winners will be announced at an event at MIT shortly thereafter.

Trends among the applications

Zamora said that even after three rounds of the News Challenge, some applicants were still not understanding the basic requirements of the contest. One area that sparked lots of applications, as always, was community news sites — small news outlets that aim to do some of the work traditionally done by local newspapers in covering a community. “Those are really worthy projects, and there’s definitely a need for them,” Zamora said. But the News Challenge is designed to fund innovation, and many of those applicants weren’t proposing anything innovative — important, yes, but not innovative.

(Zamora recommends those disappointed applicants consider entering the Knight Community Information Challenge, a separate contest with a March 8 deadline. It funds those sorts of community-news projects, but requires a partnership with a local foundation to be considered. “The idea there is that local news should be locally supported,” Zamora said.)

Other hot topics among the applications: mobile, data visualization, and augmented reality projects.

Reaching out to a broader audience

Late in the process, Knight pushed back the deadline for this year’s challenge from October to December — a move that led some to wonder if the applications received weren’t up to snuff. Zamora repeated that the switch was aimed at taking time to reach out to a broader pool of potential applicants, beyond the sort of wired journalists who, say, read this site. “We’re very good at reaching journalists and media organizations,” he told me. “But we learned that we could have more outreach to social entrepreneurs, to developers, to urban planners, to people outside our natural and known networks.” Without quantifying it, he said the outreach had proved a success and created a more diverse applicant pool than in past years.

The decision was made as part of a consultation with Arabella, a philanthropy services firm that Knight retained to help improve the contest. The firm examined 29 different innovation contests like the News Challenge and tried to suss out the different models each use. The report doesn’t pick winners and say which models are best, but it does provide a useful sweep of the field and illustrate how various competitions try to generate the best results. You can download the Arabella report yourself.

Knight News Testing Labs

Perhaps the most interesting thing Zamora told me was that Knight is in the process of developing what he called Knight News Testing Labs, although it’s unclear if that’s a final title. “It’s a project where universities and media organizations will get to play and use all the technology and projects the News Challenge has been creating and see what works best, how it works best,” he told me. In other words, a chance to put News Challenge projects — which are required to have an open-source component — through their paces as replicable, spreadable ideas. “We want to make them really plug-and-play” for news organizations, Zamora said.

Knight foundation head Alberto Ibargüen mentioned the same idea last June 17, at the unveiling of last year’s News Challenge winners at MIT. (I know the date because I made sure we tweeted it at the time.)

Zamora said the testing labs are very much still in development, although he said Knight hoped to have something ready to move forward with in the second half of the year. It sounds to me like a great chance for some News Challenge greatest hits — like EveryBlock, Spot.us, and Printcasting — to find their way into traditional newsrooms.

[Disclosure: The Knight Foundation is a financial supporter of the Nieman Journalism Lab.]