HARRISON -- Five days a week, Rick Milburn's dog Mollie fetches two morning newspapers down his 300-foot driveway -- the Northwest Arkansas Democrat-Gazette and the Harrison Daily Times.
"She always picks up your paper first," Milburn told Walter Hussman, publisher of the Democrat-Gazette, during a meeting of the Harrison Rotary Club on Thursday at a Western Sizzlin' restaurant.
"I'm not going to comment on that," said Hussman, as the crowd laughed.
Hussman was in Harrison to talk about the conversion of area print subscribers -- about 500 of them -- to a digital replica of the newspaper. That conversion will be complete at the end of this week, he said.
At that time, the Democrat-Gazette will stop circulating printed newspapers in the Harrison area, except for Sundays. The Sunday paper also will be available for single-copy sale around Harrison.
Milburn, 57, said he's going to miss getting a print edition of the paper every day.
"There's something about holding it and getting that slobbery paper from my dog," he said.
But Milburn said he's sold on the digital replica, which he reads on his Apple iPad.
"I've taken the paper for 30 years and still love it," he said. "It's hard for me to change, but I'm going to embrace it and change with the times."
Harrison has been a test market for digital conversion of the Northwest Arkansas Democrat-Gazette, which is circulated in 12 counties.
The newspaper will provide subscribers in Harrison with Apple iPads, if they want them, so they can read the digital replica of the newspaper. The iPads also can be used to watch movies and surf the internet, Hussman said.
Hussman, who is also chairman of WEHCO Media, Inc., the parent company of the Democrat-Gazette, has been working for two years to convert subscribers in the 63 counties outside Northwest Arkansas to the digital edition, plus Sunday print edition.
Digital conversion of the 63 counties is almost complete, with the Little Rock area being last. Hussman said the Little Rock conversion will be complete next week.
He said he got an 80% conversion rate in Harrison, which is better than the 78% statewide average. The conversion rate in the Little Rock area has been more than 90%.
After the meeting Thursday, Hussman said that about 36,500 subscribers have been converted to digital statewide, and he's spent about $11 million on iPads (at a cost of about $350 each) to distribute to subscribers. Some subscribers didn't want a Democrat-Gazette iPad because they already had a device -- such as an iPad or computer -- that they could use to read the replica edition of the paper.
Hussman said he needs to get $34 per month from subscribers to make the newspaper profitable. Some subscribers in Northwest Arkansas were paying considerably less than that because of a heated newspaper competition in that part of the state. Hussman said the rate for those subscribers is being raised by $1 a month until they get to $34.
At the Harrison meeting, Hussman said newspaper advertising revenue peaked in 2006 and has declined every year since.
"Newspapers in 1980 got almost a third of all the ad revenues in America, and as recently as 2000 got a little less than a quarter of all ad revenues in America," Hussman said. "Last year, they got less than 5% of all the ad revenues in America."
"This completely disrupted the business model for newspapers," he said. "Newspapers historically got about 80% of their revenue from advertising."
Newspapers nationwide took in about $47 billion in advertising revenue in 2006, Hussman said. By 2017, that number had dropped to less than $12 billion.
Newspaper digital advertising increased about $1 billion during that time, he said.
Hussman said targeted advertising has replaced newspaper advertising to a large degree. He said Google went to Orvis, the fly fishing company, and asked why it was advertising in The New York Times.
"Half of the people that read The New York Times will never buy anything from Orvis," said Hussman, paraphrasing what Google told Orvis. "You're wasting at least half of your money."
Google explained that it could target Orvis ads to fly fishermen.
"Anybody who's going to go fly fishing is going to Google -- places to go fly fishing, fly fishing equipment, fly fishing guides, etc.," Hussman said. "Basically, that's what happened: digital advertising took over. Advertisers today don't want to reach large numbers of people. They want to reach specific people."
Newspapers have responded to this advertising disruption by raising subscription prices and cutting expenses, he said.
According to the Pew Research Center, there were 71,000 people working at U.S. newspapers in 2008 and only 39,000 nine years later, Hussman said.
He said the Democrat-Gazette had to make a decision: Was it going to cut the size of the newsrooms, the amount of space for news published in the paper, or cut unprofitable circulation?
The decision was made to cut unprofitable circulation and shift to the digital replica, he said. The Sunday paper will still be printed because many businesses advertise in that edition of the paper, and many people want the print edition on Sundays.
WEHCO Media schedules training sessions to help readers who need tutorials on iPad operation. Hussman said reading the replica version of the newspaper on an iPad is a vast improvement when compared with reading a newspaper on its website.
He said the next test for digital conversion of the newspaper's subscribers will be in the Fort Smith area.
The Northwest Arkansas Democrat-Gazette is distributed in Benton, Boone, Carroll, Crawford, Franklin, Johnson, Logan, Madison, Newton, Sebastian, Scott and Washington counties.
Metro on 01/20/2020