Declining newspaper advertising revenue has forced WEHCO Media to discontinue distribution of the print edition of the Arkansas Democrat-Gazette outside Central Arkansas.
Walter Hussman Jr., president and CEO of WEHCO Media, spoke Thursday to the Rotary Club of Magnolia. He described how remote subscribers will receive iPads loaded with an app for the Democrat-Gazette.
A date will be announced in February when Democrat-Gazette subscribers in the Magnolia area will be given iPads and instructions on how to use them to read the Little Rock-based newspaper.
WEHCO Media will own the iPads, and subscribers will be expected to return them to the newspaper company should they discontinue receiving the Democrat-Gazette.
WEHCO Media also owns the Banner-News of Magnolia. The iPads will also come installed with an app for the Banner-News. Banner-News subscribers will be able to use the iPads to read the Magnolia newspaper if they are paid subscribers.
magnoliareporter.com is NOT affiliated with WEHCO Media. It is totally supported by advertising and remains available, without charge, on personal computers, tablets and smartphones. CLICK HERE to see the locally-owned and operated news website.
Hussman said that subscribers will still receive print editions of the Sunday edition of the Democrat-Gazette. Hussman didn’t say it, but Sunday newspapers are typically the delivery vehicle for many special sections, advertising supplements and coupons.
“As recently as 1980, newspapers took in 31 percent of all (United States) advertising revenue,” Hussman said. By 2000, newspapers had 22 percent of the ad market.
“They still had enough revenues to have a good, robust news staff to report news and provide lots of opinions, to serve a watchdog function over government and business and labor, and also enough money to provide a profit and return for the owners,” Hussman said.
Revenues began collapsing when the Associated Press, the world’s leading news-gathering and distribution cooperative, started to sell content to Yahoo, Google and other Internet services, Hussman said. Those services began providing news to their users without charge. Many newspapers followed, he said.
“Despite all of these changes, newspapers continued to increase their revenues – not quite as much as other mediums did, but still increasing. All of that happened until 2006. That was the first year in the United States when newspapers’ total ad revenue declined for the first time in a non-recession year,” Hussman said.
Newspaper revenues have fallen annually every year since 2006. Nationally, newspapers now receive less than 5 percent of all advertising revenues.
Newspapers have responded to the newspaper revenue decline in several ways, Hussman said. The first has been to raise subscription prices. An Arkansas Democrat-Gazette subscription is $432 a year. The Banner-News is $180 a year. (magnoliareporter.com, which is NOT affiliated with either newspaper, offers free access to its exclusively online platform).
“But that’s not been enough,” Hussman said.
Newspapers have had to reduce staff. WEHCO Media has done so, but not to the extent of other newspaper companies, he said.
Newspapers have also closed printing plants, Hussman said.
Earlier this year, WEHCO Media shut down its press in El Dorado, where the Banner-News, the El Dorado News-Times and the Camden News were published. At the same time, WEHCO also shut down its print operation at the Texarkana Gazette. All four newspapers are now printed in Little Rock and trucked back to those cities for distribution.
Lastly, larger newspapers have reduced expenses by cutting outlying circulation.
WEHCO Media’s venture into iPad distribution began in Blytheville, Arkansas – 186 miles from Little Rock where the Democrat-Gazette had 200 subscribers. The company’s initial model for iPad distribution was not successful, but WEHCO Media has since refined its method, Hussman said.
The Democrat-Gazette still prides itself on being a “statewide” newspaper, and Hussman sees digital distribution as the means for being able to retain that description into the future.
“We believe there is a great commonality of interest among the people in this state. They want to know what’s going on with state government, with the businesses, and with statewide sports like the Razorbacks. We have tried to maintain being a statewide newspaper and it has been increasingly difficult to do,” Hussman said.
WEHCO Media has been reducing its profits to have the cash available to produce a statewide newspaper, Hussman said. The newspaper hasn’t made a profit through the first 10 months of 2018.
“It’s a sad commentary but that’s the situation. Obviously we can’t continue to do this unless we find some other solution, and that’s what we’ve tried to do,” Hussman said.
While taking questions, Hussman acknowledged that many subscribers in rural areas of the state have no reliable Internet service.