Will Fortune Favor the Future of News?


Will Fortune Favor the Future of News?
The daily “paper” now arrives at Arkansas Business mainly on an iPad. (Kyle Massey)

“The future of news has arrived,” right here at Arkansas Business.

It came in the form of a handsome 9.7-inch iPad wired to provide digital replica versions of Monday-through-Saturday editions of the Arkansas Democrat-Gazette, which has been spotlighting its read-us-on-iPad program on local billboards for the past month.

As subscribers, Arkansas Business Publishing Group still gets a printed Sunday paper, but the daily routine has shifted from handing off the print product to passing the iPad back and forth.

Democrat-Gazette Publisher Walter Hussman has staked his paper’s future on readers taking the iPad path to daily news. The print paper’s footprint, once statewide, had shrunk for well over a year when Hussman announced in May that the flagship paper of Wehco Media Inc. would halt weekday printing, perhaps by the end of the year.

The Democrat-Gazette is keeping its profitable Sunday print edition while shifting $35-a-month subscribers over to the iPads, in which the publisher has invested $12 million.

The gadget does neat tricks, we’re discovering in the newsroom. All photos can be in color; ads are interactive, videos run at a tap, and a decent-sounding electronic voice can read you the news.

Hussman hopes Sundays will be sufficient for print fans, that enough of the paper’s 100,000 or so subscribers stay on, letting the paper continue covering the state without cutting journalism jobs.

Production and distribution jobs are a different story, though Hussman hopes to pick up job printing work to keep some pressmen busy.

The change in our reading habits coincided with another sign of the apocalypse for daily papers, the $1.4 billion merger of America’s two largest newspaper chains, Gannett and GateHouse, which each have properties in Arkansas.

Gannett is the traditional biggie, owner of Mountain Home’s Baxter Bulletin. GateHouse, a a chain in the profit-squeezing mold, has more than a dozen dailies and weeklies in Arkansas, including the Southwest Times Record of Fort Smith and the Pine Bluff Commercial.

The Bulletin may find itself back in play if it doesn’t fit well with the merged company. Suitors might include Phillips Media Group LLC of Harrison, which has the Harrison Daily Times and the Newton County Times as well as seven Missouri properties, or Paxton Media Group, which recently bought GateHouse newspapers in Conway, Clinton and Heber Springs.

Little Rock recalls Gannett from its $51 million (plus $9 million in debt) purchase of the Arkansas Gazette from the Hugh B. Patterson family in 1986. Five years later, beaten by Hussman’s doggedness and ingenuity, Gannett surrendered. The biggest news chain in the nation shut down the Gazette and sold its assets to Hussman for $68.5 million.

Now papers sell for a fraction of that.

The Washington Post and New York TImes have built revenue streams from digital subscriptions, but smaller papers lack the scale to follow. Hundreds of papers have closed, and jobs have been slashed in virtually every newsroom.

Carrick Patterson, whose father sold the Gazette to Gannett, predicted years ago that papers would disappear. “The old model was essentially building a very expensive factory to process expensive newsprint paper and sending tons of it out daily by an expensive transportation system only to be looked at once and thrown away.”

The merged company, called Gannett, may reap $300 million a year in savings to invest in “digital transformation.” But as business and journalism leaders said, consolidation won’t solve the business-model problem.

A Pew Research report last month found U.S. daily newspaper circulation at its lowest level since 1940. Both print and digital subscribers were estimated at 29 million on weekdays and 31 million on Sundays, down 8% and 9% respectively. In the mid-1970s, circulation reached 65 million, even though the population was only two-thirds what it is today.

We’re not sure Hussman’s digital path will lead to profits, but we cheer his foresight in at least having a plan.