Little Rock When you think of innovation, you might think of California and Silicon Valley, but you’re not likely to think, hey, Arkansas! Well, who knows if this will work, but the statewide newspaper, the Arkansas Democrat-Gazette, has announced that, lo and behold, it is going 100% digital by next year, yes, 2020! You want to read the paper, well, sure, says Walter E. Hussman, the publisher, we can do that, but it’s not going to be a paper, you know, like on real newsprint paper kinda deal, it’s all going to be on an iPad. Yep, an iPad.
In a mid-May letter to subscribers, Hussman lengthily described his thinking which, front to back, can easily be boiled down to his reveal early in the missive: they lost money for the first time in 2018! They didn’t like it, and they could see it getting worse, and that’s not how they saw their business. Their business sold news for money, and if it was not making money, then that was very bad business. He detailed an experiment that they had tried in Bentonville, where they had 200 subscribers who were expensive to service. They gave them all iPads. They had sessions in the local Holiday Inn to train them on how to use the iPads. Those that didn’t show up, got home visits and personal tutorials about how to make this work, keep them juiced, and learn to read with their fingers doing the walking. 70% liked it and kept their subscriptions, and that was good enough for Hussman. On to El Dorado and beyond.
Reading the letter, it looked like their strategy was to encircle the fortress of their subscribers in Little Rock and Central Arkansas by lopping off all the pockets of fans they had here and there. Hussman’s letter claims this cuts costs drastically, more than offsetting the expense of providing the iPads and will return them to profitability. The point of the letter, now that he has made the whole deal public in what was left of his paper, was to ask subscribers to pay the same, they were paying – which is a crucial part of his business plan — and get in touch with them so they can iPad them up as well and bring all of Arkansas news readers into Apple-valley.
Will this work? I’m not sure. In New Orleans, the Times-Picayune just gave up the ghost after a failed experiment of moving to three days per week and were acquired by The Advocate that came into town and continued to deliver seven days a week. I failed on their website or on Google to find out the cost for a full-year’s subscription, but if Walmart will let you buy an iPad for $250, I assume Hussman was able to make a deal for less than $200 and assumes by reducing costs of production and delivery, that he will still make money on a one-year subscription. A local businesswoman told me that Hussman has said that this is costing them $12 million to make the changeover. Not sure what happens when the iPad dies, and whether he will replace them or not? For those willing to read on an iPad, why would they not just pay for the paper digitally as opposed to paying full boat for the paper on an iPad with a print Sunday edition?
I’m fighting hard to keep an open mind, since I have spent some years working in Arkansas, and am still scarred by the antics of the Democrat and the Hussman family during their wars with the Gazette and its questionable ownership. Maybe he’s right that people will like an iPad better than a paper. That’s never been my experience, and reading papers digitally as well as by hand, I know for a certainty that I miss some articles online, that I find in print. Maybe an iPad is different and more of a facsimile. The only thing that I’m sure of right now after reading Hussman’s letter is that he is right about one thing for sure: for him, it’s about the money, not the news. It might work out for the business, but we’ll have to see how it works out for the rest of us.