Democrat-Gazette’s Walter Hussman Feels Burn on ‘Churn’

Minutes after gunfire took its toll at a Forrest City Walmart last week, the Arkansas Democrat-Gazette had a team speeding east on Interstate 40.

“Reporters with @ArkansasOnline including myself are working to put out a verified, credible account of what happened,” Nyssa Kruse posted last Monday on Twitter.

The gunman was killed and two police officers wounded, reported the newspaper, which has bet its future on a digital replica edition for subscribers on weekdays and a printed paper on just Sunday, its only profitable day for newsprint.

Kruse’s “verified and credible” language comes straight from the mind of publisher Walter Hussman Jr.

News reported firsthand by trained professionals sets the Democrat-Gazette apart from Facebook and all the aggregators, Hussman often says. His latest listener was Steve Barnes of “Arkansas Week,” AETN’s news and public affairs program.

Hussman told Barnes he’s encouraged by a 79% conversion rate in converting $35-a-month print subscribers to digital replica readers with access to a loaned iPad.

That’s above the rate his number-crunching had calculated as necessary to maintain a statewide newsgathering operation with 106 journalists in Little Rock and more than 60 at its sister paper, the Northwest Arkansas Democrat-Gazette. For now, the 12 Arkansas counties covered by the northwest paper are not part of the digital package.

While the acceptance rate looks great, Hussman said he’d overlooked subscriber attrition, known in the industry as “churn,” the normal loss of readers over time.

“You constantly have to be out selling new subscribers because people die, people move out of state,” Hussman said. “We really didn’t factor that in, so we’re a little below the total number of subscribers we projected.”

Industry observers, noting that churn at daily papers can run 70% and more, called the miscalculation strange for so adept a businessman. Hussman famously bested Gannett Co. and the venerated Arkansas Gazette with a flurry of innovations like free want ads through the 1980s newspaper war. After the birth of the hybrid Democrat-Gazette in 1991, he was one of the first newspaper leaders to wall off and monetize website content.

“Newspapers are partly at fault for the way news is consumed today,” for giving content away at the advent of web news, Hussman said. “The AP started selling content to Google and Yahoo, very young companies at the time, that gave news away free,” Hussman said. “We have a whole generation of young people who came up thinking, hey, news is supposed to be free. But serious news can’t be free because you’ve got to hire reporters and editors, people who are professionally trained to do fact-based reporting and keep bias out.”

Citizens in a democracy need facts, Hussman told Arkansas Business late last year. They need reporters who go to government meetings and serve as “a watchdog on what’s going on in government, in business and in society. You aren’t going to get a watchdog from people with just an ax to grind and want to tell just their side of the story.”