Walter Hussman's Brave iPad Strategy

After spending $11 million on iPads to give away to facilitate conversion from print to digital editions, the Arkansas Democrat-Gazette says the initiative is working. 

After starting the initiative in mid-2019, the newspaper converted 79% of its readers in all 63 southern counties to digital subscriptions, according to Walter Hussman, Jr, publisher, speaking at the 2020 Mega Conference. 

Hussman was clearly the hero of the conference. He won the Innovation Award, and a round-table session was packed with fellow publishers in concentric circles around his table, leaning in to hear how he did it. 

There’s a lot at stake for the industry. Hussman has the first newspaper to pull off an all-digital conversion after the Philadelphia Media Network and Tribune Co.’s initiatives petered out. 

It was a last-ditch effort, he said, to ward off “slow death,” and a journey that was also high risk and fraught with peril - from finding a sustainable pricing formula to locating WiFi signals in remote rural areas. 

The company first tinkered with digital conversion “roll-out” models in a tiny rural town of Blytheville. A great story by Marc Jacobs for the Local News Initiative  portrays the drama: 

Hussman’s team tried persuasion first (“Please switch to the iPad), then offering a new phone, discounted iPad and a check. Only 4 of 200 people signed up. Their last-ditch effort was an outright giveaway of an $800 iPad. It worked. Here he is below with cases of iPads ready for launch.

Then the team moved carefully from town to town, completing one 70% conversion at a time, while fielding calls from people in other towns who wanted an iPad “right now.” 

Another ingredient in the secret sauce is providing training on the device - which means sending people into small towns to meet with often older subscribers and walk them through how to use an iPad at a cost of about $90 per subscription. At one point Hussman had 70 trainers in the field but says he could not have obtained the take rates without them. 

Asked about the math, he explained to the group of publishers how the model works: You can buy iPads in bulk for about $350 each, plus the $90 in training, so the first year subscription at $34 a month is close to break-even. 

But that does not take into account huge savings from dropping 6 days of paper, printing, production and distribution, especially highly subsidized rural areas where drivers can traverse long distances for a single drop-off.  

The profits are even higher in year two. Hussman told the group that the newspaper will start making money again in 2021. 

Subscribers can keep the iPad as long as they continue their subscription; otherwise, they have to give it back. 

No, he says, the newspaper will not repair or replace the iPads if they break or wear out.

“You have to be responsible for it,” he tells subscribers who ask. Not to mention, they come with a branded case.

The Sunday paper with its inserts and weekend sales is still printed and delivered, although Hussman noted some subscribers have noticed themselves reading it on the iPad, leaving the paper at the door, still rolled up in its rubber band. If you only want Sunday, it’s still $34 a month. 

Even people who wanted to keep their print paper, change their minds after a few weeks, “They tell me, I can’t believe I like it better. “ 

What makes the iPad experience so great is the digital replica (see the 11 reasons Hussman’ s readers say the iPad is better than print). 

The CMS from Press Reader puts the edition across the top of the iPad, with the “scrolling version” of stories only available underneath. Most newspapers place an e-edition thumbnail on the right-hand corner of the browser, so this placement encourages readers to use the newspaper in its original form. 

The e-edition also increases time on the site, about 20 minutes compared to 2.5 minutes for the browser, Hussman said. And readers even feel the experience is more “complete” than scrolling through articles in which you never feel you have finished or seen everything, adding a sense of free-floating anxiety and doubt about what you have purchased. (Read more about the case for the e-edition here.) 

“When you move from print to digital you are asking [people] to make a pretty big change,” Hussman said. 

“There are two changes, actually, from print to online and from print format to a scrolling website format. All we are asking people to do is just make one change. You don’t have to change the format. It is going to stay exactly the same.” 

The math will be harder in the northern part of the state where a now-defunct competitor sold subscriptions for $5, depressing the rates. Subscription prices moved to $19, but need to move up to $34 for the model to work. 

To roll-out the iPad initiative, Hussman starts with a letter to subscribers explaining that there is no other option. Even if they take the lower rate, Hussman doesn’t mind. 

“Would you rather have 75% of the number of print subscribers pay $34 a month or 100% paying $5 a month? At $5 a month, we can’t get enough revenue to be sustainable.” 

The iPad also allows publication of more news - including 24 pages of stocks and numerous crossword puzzles, because, why not? 

His newsroom has also been able to maintain its 106 writers and editors, compared to 34 in a similar-sized news market in a neighboring state. 

In addition to 2000 news deserts created when one in five newspapers closed over the last 15 years, there are even more “ghost newspapers” whose newsrooms have been hollowed out after each cycle of the downward spiral. 

Walter Hussman, “I didn’t want to do that. I don’t think there is a future in that. I don’t think (those papers) are going to be around, and sometimes I think they don’t think they are going to be around either. And it’s not good for society. There is a lot riding on this. 

One publisher approached him at the end of the presentation and said, “I just wanted to shake your hand.”