A roomful of Harrison Rotarians mingled amid conversation as they loaded plates with fried chicken, fish and salads during their regular weekly buffet luncheon at the city's Western Sizzlin'.
But there was nothing regular about the speaker on this day.
Walter E. Hussman Jr., publisher of this newspaper and chairman of WEHCO Media, accompanied by leading company executives, had come to the Ozarks to explain financial realities behind taking the state's only statewide daily paper to a digital format to keep it viable.
At least 60 business men and women listened intently as Hussman spent 20 minutes describing the reasons behind the Arkansas Democrat-Gazette's necessity to change the habits of subscribers who'd grown up reading the news on paper.
Using a PowerPoint presentation to clarify his message, Hussman said America's newspapers got about a third of all advertising revenue in 1980, but that had plummeted to less than 5 percent by 2019.
Hussman said the steep drop in such a relatively brief period "completely disrupted the business model for newspapers."
Nationwide, newspaper ad revenue fell from $47 billion in 2006 to under $12 billion by 2017--or a 75 percent decline. Those dollars were funneled instead into Internet behemoths such as Google and Facebook.
The Democrat-Gazette was not immune to those market forces, which prompted Hussman and his management team of innovative executives to develop an alternative approach to stay alive. He said the sharply diminished revenue model as it stood was neither profitable nor sustainable.
He talked about community daily papers such as Arkadelphia's Daily Siftings Herald and the Hope Star already having sadly surrendered to the market forces. He said one in every five U.S. papers, many in smaller and midsized communities, have closed their doors in the past 15 years. "This threat is real," he said.
After putting pencil to paper, Hussman determined the subscription cost of $34 a month would suffice to maintain the higher level of content when the number of subscribers was factored into the equation. Simply offering the paper on the ADG website wouldn't generate nearly enough to survive.
And so the idea of providing a free iPad with training for every subscriber at a cost to the company of over $12 million was deemed worth the risk. To break even, Hussman said the Democrat-Gazette needed 70 percent of paper-only subscribers to switch to the digital version.
After subscribers in 62 of Arkansas' 75 counties already have made the change, that figure hovers around 78 percent, which is encouraging. Yet to go are readers in the 12 counties served by the Northwest Arkansas Democrat-Gazette, including the Harrison test market with about 500 subscribers, Hussman said.
He cited other metropolitan newspapers that today have shriveled to mere shadows of the size and the circulation they once boasted. For instance, the Philadelphia Inquirer in Pennsylvania's largest city of 1.6 million population today charges $88 a month, and its Jan. 11 paper offered just 22 pages, compared with 36 for the Northwest Arkansas Democrat-Gazette that day.
The underlying objective of his vision is to eliminate most costs related to circulation, rather than cutting the quality and level of content. A recent national study showed the number of newsroom employees nationally had dropped 45 percent from 71,000 in 2008 to 39,000 by 2017.
In an effort to make the necessary $34 monthly subscription fee more subscriber-friendly, the Democrat-Gazette is gradually raising its cost for the Northwest edition by $1 a month until reaching that amount. "We are doing all we can not only to save our state newspaper but to make it easy and convenient for readers." Hussman said 80 percent of subscribers in Harrison have opted for the digital version.
Among many advantages of the digital paper, Hussman explained, is a replica of the daily paper on a screen that allows readers to easily enlarge the typeface. You're also able to read the day's paper wherever you are. There are videos attached to some features, vivid color photographs throughout, and the ability to easily forward any story via email. Back issues are available at a touch, and there is never a late, or wet, paper in the driveway. The paper reliably arrives by 4 a.m.
Hussman said he had not chosen to take such a major risk in order to make big profits but to "save the newspaper" he loves.
After concluding his talk that included a four-minute video segment recently aired on the NBC Today show featuring the Democrat-Gazette's nationally innovative approach to ensure survival, several Rotarians approached the paper's circulation manager, Larry Graham, to subscribe.
"This version of the paper really is so much better than I ever realized before today," said one man. "I want to do what I can to keep enjoying my state paper and help make sure it survives."
Now go into the world and treat everyone you meet exactly like you want them to treat you.
Mike Masterson is a longtime Arkansas journalist, was editor of three Arkansas dailies and headed the master's journalism program at Ohio State University. Email him at firstname.lastname@example.org.
Editorial on 01/19/2020