You can't cover Wall Street from Bangalore!

Editor's note: This blog is keen to spot and report new trends in the media. Indian journalists are becoming an attraction for news organisations in the West.
Read this story that appeared in IHT.

By Doreen Carvajal / InternationalHerald Tribune
Published: November 20, 2006
PARIS: The rush of job recruiting ads on MonsterIndia.com tells the story of the latest class of workers to watch their trade start migrating to another continent. "Urgent requirement for business writers," reads one ad looking for journalists to locate in Mumbai. "Should be willing to work in night shifts (UK shift)."
Another casts for English-speaking journalists in Bangalore with "experience in editing and writing for US/International Media. "Remote-control journalism is the scornful term that unions use for the shift of newspaper jobs to low-cost countries like India or Singapore with fiber-optic connections transmitting information all around the world. But the momentum for "offshoring" to other countries or outsourcing locally is accelerating as newspapers small and large seek ways to reduce costs in the face of severe stresses, from sagging circulation and advertising revenue to shareholder pressure.
"Outsourcing plays a major part in the newspaper industry of today," the World Association of Newspapers concludedin a study released in July. WAN, a Paris-based organization representing 72 national newspaper associations, conducted a global survey of about 350 newspapers in Europe, Asia and the United States, and company executives reported that they expected the outsourcing to increase, although few were willing to farm out all of their editorial functions.
Since then, the memos have been churning: The Columbus Dispatch in Ohio announced its intentions toshed 90 graphic design jobs and ship out the work to Affinity Express in Pune, India.
The Contra Costa Times, a California newspaper newly acquired by Media News Group in the breakup of Knight Ridder, revealed plans to shift ad production positions to Express KCS in India, which bills itself as the "world's media back office.
"In Britain, the tabloid Daily Express sparked an uproar in the newsroom when it chose to outsource its entire city business section to a local press association. According to the newspaper's union, the executives chose this alternative only after touring potential companies in India that offered writing and copy editing services.
"It's a very depressing time to be working for newspapers," said one of the union representatives at The Daily Express, who declined to be identified because of concerns about job security. "The underlying theme is about the quality of what we're putting on the pages. The kind of a product that The Daily Express is going to have is a total disservice. If I was a reader, I would vote with my feet and stop buying it."
Paul Ashford, the group editorial director of The Daily Express who is negotiating with the union over the changes, declined to comment, saying that it would be inappropriate to discuss the issue while talks were continuing.
But there are a number of news organizations that have emerged as case studies for media companies weighing the benefits of reduced costs versus potential disadvantages like loss of control, company resistance and political backlash.
More than two years ago, Reuters, the financial news service, opened a new center in Bangalore. The 340 employees, including an editorial team of 13 local journalists, was deployed to write about corporate earnings and broker research on U.S. companies. Since then, the Reuters staff at the center has grown to about 1,600, with 100 journalists working on U.S. stories.
The company has also moved photo editing work from Canada and Washington, D.C., to Singapore. More expansion is planned in India, according to David Schlesinger, Reuters global managing editor, who said that costs were significantly lower in India, although the competition to recruit financial journalists there was increasing.
The system has "allowed us to really increase the breadth of companies that we cover," Schlesinger said. "One of the problems with the U.S. equities universe is that there are so many companies, and this has allowed us to cover so many more than we could before. And it's allowed us to increase our depth because it's freed up reporters in New York to do more."
He pointed out that the staff count in New York had actually increased since the Bangalore office opened. But that is small comfort to the Newspaper Guild of New York, which has engaged in a series of skirmishes with Reuters' management over the issue.
Guild members picketed the Reuters office on Times Square last year, waged a byline strike over off-shoring and spoofed the potential for error in Bangalore with a paid advertisement in the Wall Street Journal. The ad pictured the businessman Warren Buffett with a caption clearly intended for the singer Jimmy Buffett: "Buffett, known for such hits as 'Margaritaville'and 'Cheeseburger in Paradise,' promotes his upcoming tour."
But the more vociferous challenges subsided after a U.S. arbitrator ruled against a guild challenge that off-shoring jobs violated the guild's contract with Reuters. The guild still maintains that "you can't cover Wall Street from Bangalore, India," said John Phillips, a guild representative and a former Reuters employee, who said that the system was a "recipe for disaster," with Bangalore employees making judgment calls about the importance of news stories from an office 9,000 miles, or 14,400 kilometers, away.
But guild reporters in New York cannot match the price differential in Bangalore, where wages and rents are less than one-fifth those of Western capitals. In Amhmedabad, 300 miles, or 480 kilometers, north of Mumbai, Hi-Tech Export offers a discounted rate for 40 hours of editing services starting at EUR280, or $359.
Since 2000, when it started targeting the outsourcing market in the United States, Europe, Canada and Australia, Hi-Tech Export's staff has grown to 700, serving more than 300 clients, according to Gaurang Kajtavkar, a spokesman for the company.
"We're a full-fledged service company," he said, noting that they offered proofreading, copy-editing and writing services to companies in the United States, France and Britain. The service, though, is offered only in English, leaving some newspapers at a disadvantage if they want to join trend toward job migration.
The Vorarlberger Nachrichten in Vienna is one such paper. It is on the list of outsourcing case studies compiled by the World Association of Newpapers, which cited it for its citizen "burgerforum," which provides the newspaper with the fodder for stories from some "2,500 freelancers who are working for us for free," said Eugen Russ, managing director of Vorarlberger Medienhaus, the paper's parent company.
He does not consider the interactive forum a form of outsourcing, although his newspaper has moved the development of Web sitesoftware to lower cost Romania. Russ said he would be willing to move some jobs to India, but there's a hitch: "It's more problematic with the German language."