The publisher of the Arkansas Democrat-Gazette is investing millions of dollars in a plan to convert the newspaper's print subscribers to digital by the end of 2019.
Walter E. Hussman, Jr., who is also chairman of WEHCO Media, Inc. and publisher of the Chattanooga Times Free Press, has been travelling to towns across Arkansas explaining his plan to readers of the Democrat-Gazette.
He promised that if they keep paying their current rate of $36 a month for a subscription to the Democrat-Gazette, even though it will no longer be printed daily or delivered to their door, they'll get a free iPad to view a digital version.
The daily digital replica of the state's largest newspaper will be accessed with an easy-to-use app they can download on the tablet that the newspaper is distributing to subscribers.
Hussman said last week that by the end of the year, only the Sunday edition of the Democrat-Gazette will be printed.
Jeff DeLoach, president of the Times Free Press, said there are no plans to change the Times Free Press' distribution method in the near future.
"We are pleased to be part of a company that is planning for the future and aggressively embracing the digital transition as readers naturally migrate that way," DeLoach said. "In Chattanooga, we will continue to focus on local journalism that serves our readers and clients. We are fortunate to serve a community that values strong local news and be part of a company that has the same focus. Our newsroom staffing levels are strong today and that remains a priority for the future, regardless of the delivery platform."
DeLoach said quality local journalism is a valuable asset requiring continued investment in both newsroom resources and distribution platforms.
The digital conversion in Arkansas is a gamble Hussman feels compelled to take to sustain his newsroom of 106 employees and turn a profit, which the paper hasn't done since 2017. The Times Free Press remains profitable.
"Sometimes you've got to risk your business in order to save it," Hussman said. "That's what we're doing. And that's kind of familiar territory. We did the same thing with the Arkansas Gazette."
Hussman was referring to the newspaper war from which the Arkansas Democrat-Gazette emerged in 1991. He shifted the afternoon Arkansas Democrat to morning and invested in the newsroom, eventually winning the war over Gannett, which owned the Gazette at the time.
In March 2018, the paper began the experiment in Blytheville, a town of about 14,000 in the northeast corner of the state 155 miles from Little Rock, where the paper publishes. Each of the paper's 200 subscribers was offered the iPad at the current print delivery rate, plus a personal training session to explain how to use the tablet, and print delivery stopped about two months later.
More than 70% of the Blytheville subscribers converted to the digital version, a figure that, if replicated statewide, is enough for the paper to turn a profit, which Hussman expects will be in 2020.
Hussman has said he's willing to spend $12 million on the tablets, or about 36,400 iPads, which retail for $329. At the current lowest subscription rate of $34 a month, that would generate about $14.8 million in revenue per year, which Hussman said would turn a profit after expenses.
Rick Edmonds, media business analyst at the Poynter Institute for Media Studies, said two publications have tried similar experiments. In 2011, the Philadelphia Inquirer sold Android tablets for $100 if users signed up for a two-year, $9.99 monthly subscription, a program which Edmonds said was "very unsuccessful." In 2013, the Montreal-based La Presse launched a free tablet app and discontinued daily printed editions three years later, though they've since become a non-profit.
The Canadian newspaper said its plan was pretty successful, according to Edmonds.
But there has not yet been industrywide interest in distributing tablets, he said.
"But sometimes there are ideas that don't get widespread adoption and then as time goes on there comes a better time to introduce them," Edmonds said.
To sell the Democrat-Gazette's plan, Hussman is traveling the state speaking to civic clubs. He explains how revenue for newspapers has dropped since its peak in 2006, and how digital advertising isn't as profitable as media outlets originally predicted.
After the Rotary meeting, 65-year-old Steve Harris, a subscriber since the early 1980s, said he's been using his iPad for about a month. There are "pros and cons" to the iPad, but he likes the photo galleries available on the digital replica, as well as its ease of access when he's traveling.
But Bill Loe, 87, said he doesn't know if he'll keep subscribing.
"I'm not sure. If I can run that gadget, I will," he said.
In Hussman's experience, skepticism is the initial reaction from subscribers of the newspaper, who tend to skew older, but eventually, most tell him they prefer it to print.
The digital replica looks just like the printed paper and is intuitive to navigate within the app. Clicking on the jump takes the user to the continuing story. The text can be enlarged. All pictures are in color; some also reveal videos.
This isn't Hussman's first controversial move to keep his newspaper profitable. In the mid-2000s, he thought papers publishing online content for free was short-sighted and the Democrat-Gazette's website established a paywall earlier than most media organizations. Most newspapers now have paywalls.
The tablets are essentially a long-term loan and subscribers keep them for as long as they pay for the paper. They're also responsible for repairing or replacing the tablets, which come with Apple's one-year warranty. Hussman said the newspaper doesn't monitor usage or track users in any way. When it's returned, it's wiped clean and can be re-distributed.
Hussman isn't sure whether the digital replica will appeal to younger generations, but enough people are converting for now.
Penny Muse Abernathy, who teaches digital media economics and behavior at the University of North Carolina at Chapel Hill, said whether people will continue to pay depends on what the reader experience is like and if the news is still vital to readers.
"I think it's a very smart move. It's a very farsighted one," she said.
Kenco Logistics adds test warehouse at Riverside Drive headquarters to try out new robots, technologies