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Saturday, February 21, 2009

Outsourcing Journalism: Pasadena Now Goes "Glocal"

The local online-only newspaper, Pasadena Now, created an uproar when it revealed that a preponderance of its content is created not in sunny Pasadena, but over 8,000 miles away in Mumbai, India.  Protectionists and traditional journalists were aghast at the revelation of outsourced journalism.  Pasadena Now, which covers local news and politics, human interest stories, and community events, is written by a team of writers who don’t even consider themselves to be journalists, a fact made obvious their prose.  James MacPherson, the editor in chief and owner of the website, considers himself a pioneer in a low cost content sourcing model that he calls “glocal.”  Indian reporters source stories from local websites, event calendars, and city council minutes, creating what amounts to surprisingly comprehensive coverage.  Pulitzers are certainly not in the offing for these reporters, but for a local daily, the content is concise and relevant to city happenings.  

A competing newspaper’s editor, Larry Wilson of the Pasadena Star News volunteered some disparaging comments about Pasadena Now’s “glocal” outsourcing journalism model: “To pretend you can get the feel and the culture of a town as complicated and interesting as Pasadena by e-mailing and doing things over the Internet is nutty.”  Mr. Wilson has a right to be livid.  While the quality of content on Pasadena Now is undoubtedly lower than that of his paper and other locally written dailies, the average "Joe-Six-Pack" (if he reads at all) can’t tell the difference.  Journalism outsourcing is here to stay, especially as consumer demands force content online, where advertising rates are far lower than print.

Outsourcing journalism is nothing new--Bloomberg and Reuters have been taking advantage of the labor arbitrage opportunity for years with their financial reporting.  MacPherson’s “glocal” model is new and important for the publishing industry, however, because it represents such an aggressive move to lower costs as content moves online.  Many papers have pursued an online strategy to maintain solvency and adapt with the times, but the shift to the web and lowering labor costs is no panacea.  

Publishers must compete for users’ attention to justify current advertising rates.  The shift online is just one step toward a viable strategy that papers such as the New York Times have fully embraced.  What papers should be worried about, however, isn’t whether or not they can transition their businesses to the web--this is a prerequisite for their coming challenge.  The paramount concern of publishers should be the obvious growing user preference for a product that is cheaper to produce and that many users find more engaging: social media.  The graph below shows the percentage of time U.S. internet users spent on the Wall Street Journal online, New York Times online, and Facebook.  

The Wall Street Journal and the New York Times together make up only 0.2% of the average users’ time online, while Facebook accounts for a staggering 5% (Source: compete.com).  With content produced for free by social networking users and users spending more time on those sites, the traditional online business model for newspapers is seriously at risk.  Expect more citizen journalism and for successful papers to transform themselves into social contribution systems rather than uni-directional news sources.  

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