By paulgillin | July 8, 2008 - 8:10 am - Posted in Business News, BusinessModel, NewMedia, Newspapers


The Hindustan Times writes about a fledgling business in the booming Indian outsourcing economy: editorial services. The paper looks at Mindworks Global Media and Express KCS, two small companies that gained an early toehold in outsourced advertising production and that are now moving to the editorial side. Mindworks has tripled its staff to 100 in the last year, while Express KCS has grown an incredible 20-fold to 400 people in that time.

The COO of Express KCS is quoted saying the company is in talks with “seven or eight” interested papers. The editors are usually Indian journalists who are trained in the nuances of American editing. Most are young and they work dirt cheap compared to their US counterparts. The firm runs shifts around the clock. Poynter Institute’s Rick Edmonds is quoted estimating that “a copy editor at a medium-sized American newspaper makes between $30,000 to $60,000 per year, compared to between $4,800 and $14,480 at Express KCS.”

Is this the future of journalism? It’s unlikely that anyone will figure out how to cover a city council meeting from Bangalone any time soon. For office functions like copy editing, though, the economics of offshore outsourcing look pretty compelling. Although there’s evidence that quality can be a problem, the trend looks unstoppable. Forrester Research estimates that 3.3 million U.S. jobs and $136 billion in wages could migrate offshore by 2015. Indian firms have a lot of incentive to improve the quality of their services. The lousy quality of English taught in US public schools doesn’t help keep jobs on shore.


There’s lots more information online

Must Be a Slow News Week

  • The weeks surrounding Independence Day in the US are notoriously bereft of news, which leads to very long stories about topics that don’t seem to deserve very long stories. This is true even in the shrinking age of the newspaper.
  • Crain’s Detroit Business speculates about the future of the Detroit News, which is the weaker of the Motor City’s two dailies. The News and the Free Press coexist under a joint operating agreement that makes ownership of the News by MediaNews Group a no-lose proposition. It could become a loser for JOA partner Gannet, though, particularly as business deteriorates. In the end, nothing is likely to happen soon, Crain’s says, leading one to wonder why it needed a 1,200-word story to come to that conclusion.
  • The Maryland Daily Record devotes nearly 800 words to the news that the Baltimore Sun will cut its business section. This has become standard operating procedure for newspapers that are cutting back, since the business section generates little advertising and its the most vulnerable part of the paper to online competition. Papers have devoted less space to announcing layoffs of 10% of their staff.
  • The managing editor of the Bristol Herald Courier kicks in 700 words about the decision to make the paper one inch narrower and cut back a little on wire copy. Otherwise, no biggie.
  • Meanwhile, all’s well and good with the UK tabloids, thank goodness.

And Finally…

Comments

comments

This entry was posted on Tuesday, July 8th, 2008 at 8:10 am and is filed under Business News, BusinessModel, NewMedia, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments Off on Bangalore or Bust

Comments

  1. July 8, 2008 @ 12:36 pm



    If newspapers are so desperate to offshore editorial work to India, they might as well fold now.

    Posted by Newspaper Fan
  2. July 8, 2008 @ 6:21 pm



    I would not be so dismissive of the importance of business sections. They may get few ads, but they are traditionally read by local business leaders and would-be entrepreneusrs. These tend to be educated males, and more-prosperous-than-not readers who set budget levels for families, although have a minor role in what is spent on. The bottom line is that newspapers have turned their backs on Gen. X and Gen. Y, readers, and now are gutting what interests upper middle class males. So what audience will the newspapers of the future rely on, and what advertisers will want to appeal to that audience?

    Posted by ed
  3. July 8, 2008 @ 8:14 pm



    It’s a good argument, but those sections unfortunately don’t generate much ad revenue. In a decision over short- vs. long-term value, business sections unfortunately lose out.

    Posted by Paul Gillin
  4. July 9, 2008 @ 3:57 am



    You forgot the story about Murdoch’s descision to take the Ottaway Newspapers off the market. Why ?
    Because he could not get his price for “the silly little papers” he vowed to unload as soon as he got Dow
    Jones. He found out that he paid a huge premium for the dailies just as newspaper prices went into the toilet.

    Posted by Bill M