http://timesofindia.indiatimes.com/business/india-business/US-newspapers-may-opt-for-outsourcing/articleshow/3515456.cms
'US newspapers may opt for outsourcing'
Sujata Dutta Sachdeva | TNN | Sep 23, 2008, 02.04 AM IST
NEW DELHI: Not just the economy even the US newspaper industry is going through tough times these days. Shrinking circulation, dwindling advertising revenues, growth of the internet edition and rising newsprint prices have together put pressure on their margins. Even the best and most established US newspapers are feeling the heat.
To cope with the pressure, most newspapers have adopted various cost cutting measures. From reducing global coverage, cutting down the number of pages, streamlining resources and cutting excess jobs, they are trying out all kind of combinations to stay ahead. Now, the industry is also contemplating outsourcing some work outside the country to reduce costs.
The trend started a few years ago, as some US-based newspapers offshored their editorial work to India. In the next five years, offshoring is expected to gain traction.
According to a study done by Pune-based research firm ValueNotes, the offshore opportunity from newspaper publishers (including both the US and UK) is estimated to be around $3.5 billion.
It's expected to reach $12 billion by 2012. The number of people employed in this industry is also likely to cross 5,500. Interestingly, the overall publishing outsourcing industry too has been growing fast in India for some years now.
There are over 100 vendors in this space. What's more, revenues from Indian publishing offshoring is slated to grow from $444 million in 2006 to reach $1.46 billion in 2010. An estimated 26,000 people work in this space and the number is likely to grow to 74,000 by 2010. Most (96%) of the India-based vendors have capabilities to service the academic publishing segment. But newspaper outsourcing is different. And its this space that's gaining ground now. As of now, only the top Tier 1 newspapers from the US are offshoring. Their work is largely limited to ad production services.
However, as the space matures, Tier 2 and Tier 3 publishers too are expected send a wide range of work to India. Since its still in the early stages, only a few service providers are active in India. According to ValueNotes research, the total number of people employed in the newspaper outsourcing industry is around 2,300, as of July 2008. However, there is a scarcity of 'end-to-end' service providers. And as the space grows vendors are expected to build complementary capabilities to achieve this objective.
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