As reported in The Week, an online magazine called Pasadena Now has “hired two reporters to cover local government who have never set foot in Pasadena, and may never.” The reporters, who work from Mumbai and Bangalore, cover the beat by participating in webcasts of City Council meetings (open to all) and sorting through publically available archives on the web. In an era of email and Skype, it’s not hard to imagine sprinkling a story with quotes here and there from local politicians and stakeholders. The publisher describes these resources as “efficient” which “means he can pay his new hires $10,000 a year to generate 15 local news stories a week.”

Here’s an example of labor arbitrage impacting the frontline of journalism albeit on a small scale. The natural question is whether this is a one-off or a broader trend. What exactly is the latent arbitrage opportunity amongst other media jobs, especially those in the upper-echelons of journalism?  The Week seems to be fairly resigned about the matter: “if you think you’re job is safe, ask yourself if somebody in India, Pakistan or Indonesia could do it for less.”

To understand the future consequences, it’s useful to consider broader and mainstream applications of the same practice.

First, though labor arbitrage is a powerful force, the Pasadena Now example needs to be understand for what it is. This resource decision has very little trade-offs in terms quality vs. cost. That’s because the role doesn’t require specialized knowledge. In this case, by specialized we mean knowing the local scene. Covering small town government is a well-defined, process oriented task because readers don’t have interest beyond the basic facts. There may not be much local context required to churn out content about the who, what, where and how of a local assembly meeting. Reporting basic facts is something that can be outsourced across the board, not just applied to the hyper-local scene. Reuters and other newswires have low-cost resources abroad to generate basic news stories. You can imagine that tabulating financial market or sporting event news is something that almost anyone with a style sheet can handle.

On the other end of the spectrum are those forms of journalism requiring lots of context to produce in ways that engage readers. In its most advance form, the writer is a walking manifestation of that context (I’ll give an example of this later on).

Context includes domain expertise. Some of that stems from professional experience and some of it is just a function of the writer’s identity. For example, to effectively cover the White House requires particular professional experience. By contrast, the primary qualification required to write about culture (for an audience from that culture) is the accumulated experience of living within it. Equipped with context, writers are able to sift through the possibilities and identify what to author and how to make it meaningful.

Context is aided by relationships. In the White House coverage example, relationships can help situate information fed to the press corp. In some cases, relationships, not expertise, drive context entirely. If you’ve got the exclusive scoop on breaking news, that usually happens because of special relationships.

Beyond context, we need to consider specialized creative skills. Some types of writing involve presence and editorial voice, which are styles of expression. Good voice on copy stimulates the reader. Features, columns and opinion-page writing are reliant on habituating the reader to voice in order to drive recurring consumption. Some columns are like a daily cup of Starbucks?

Taking this into account, the beat writer for the NY Yankees or Boston Red Sox at a city newspaper is unlikely to get outsourced any time soon. These roles require expertise, relationships and voice. No amount of cost savings would offset the impact of jeopardized readership in this case. By contrast, a piece of content on the same sports pages, like a three paragraph story tabulating the results of a minor sports event might have totally different economics to it.

Now, don’t get me wrong. I think a lot of upheaval is coming in these fields. In a globalized world with integrated cultures, it would seem context will also become less geographically concentrated. So there’s a lot more people who will be able to comment on things at a certain quality level than ever before.

To get a sense of this, check out a story in last Sunday’s NY Times Sports section about the emergence of football in Turkey. Yes, American football is taking root in the form of high school teams and leagues in a region where soccer rules. What’s to say that one of these high school aged football fans won’t grow into a very qualified beat writer covering an NFL team? On top of this, it’s understood that creative talent in the form of self-expression is distributed across the world. Now that sourcing barriers are eradicated, publishers have access to a global talent pool (as if the rise of domestic bloggers and citizen journalists weren’t disruptive enough). That fact has re-shaped the IT sector but has also impacted others, like Major League Baseball, where the # 1 regional contributor to the talent pool is Latin America. That example is a no brainer because you get just as good quality while paying very little for it initially.

It wouldn’t surprise me if publishers begin to run an economic-value-add analysis at the level of each organizational role and at some point, at the individual level too. Doing this requires parsing through layers of interconnected factors. It will not be easy.

In any event, while Pasadena Now demonstrates change on the more mechanical and straightforward end of the media spectrum, more seismic activity can certainly be heard in the distance.

• Exporting and Re-Importing The News
• Outsourcing Journalism?
• Reporting from Afar Might Work
• Good Capitalism/Bad Capitalism

Filed under: Management, Traditional Media

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Tags: Outsourcing, Journalism, Local News, Globalization,