The news business is probably holding “a one-way ticket to Bangalore.”(nytimes.com)
nytimes.com
The news business is probably holding “a one-way ticket to Bangalore.”
http://www.nytimes.com/2008/11/30/opinion/30dowd.html?_r=1&partner=permalink&exprod=permalink
10 comments
Understatement of the decade: "it’s going to get to the point where saving the industry may require some people losing their jobs"
I gave a lightning talk at the Great Lakes Software Excellence Conference http://www.glsec.org/ with the premise that in-house, outsourcing, and off-shoring development can be modeled in systems engineering terms of bandwidth and latency. I posted the talk on my blog http://jerryjousting.blogspot.com/.
My conclusion from observing over the years is that companies with failed business models go offshore to die. Not all businesses that go off-shore die, but the ones that have business models that require close interaction with their suppliers and customers, that require quick reaction, or that require unique (domain) knowledge won't be successful with a move off-shore. The businesses that survive, even thrive, off-shore are ones that are or can become commodity suppliers (e.g. low bandwidth is sufficient for control and they can tolerate high latency on their product).
Sometimes the business model can be changed to adapt but a business is too ossified to adapt. Sometimes the whole business is no longer viable and the end is inevitable. Either way, historically, trying to maintain a failed business model simply by cutting labor costs fails.
Local news is not something you can off-shore successfully. It requires high bandwidth, local knowledge, and low latency. From the article: "Macpherson admits you can lose something in the translation — the Pasadena City Council Webcast that the Indian reporters now watch once missed two African-American lawmakers walking out in protest — but says the question is, how significant is it?" Ummm... like, everything?
My conclusion from observing over the years is that companies with failed business models go offshore to die. Not all businesses that go off-shore die, but the ones that have business models that require close interaction with their suppliers and customers, that require quick reaction, or that require unique (domain) knowledge won't be successful with a move off-shore. The businesses that survive, even thrive, off-shore are ones that are or can become commodity suppliers (e.g. low bandwidth is sufficient for control and they can tolerate high latency on their product).
Sometimes the business model can be changed to adapt but a business is too ossified to adapt. Sometimes the whole business is no longer viable and the end is inevitable. Either way, historically, trying to maintain a failed business model simply by cutting labor costs fails.
Local news is not something you can off-shore successfully. It requires high bandwidth, local knowledge, and low latency. From the article: "Macpherson admits you can lose something in the translation — the Pasadena City Council Webcast that the Indian reporters now watch once missed two African-American lawmakers walking out in protest — but says the question is, how significant is it?" Ummm... like, everything?
>My conclusion from observing over the years is that companies with failed business models go offshore to die.
I'm consulting for a Fortune 500 that has used a particular 3rd party system for a significant business function for the past decade. Since the vendor seems incapable of debugging its own system, I ended up reverse engineering parts of it to identify the bug. Then, a call was scheduled between me, the Fortune 500's application support folks, and the vendor's application support folks. The vendor's customer service supervisor and I were the only two people on the call who were not located in India.
An analysis of the application's architecture is a data point in support of your claim. The oldest pieces of the application seem to have some thought behind them although the implementation is significantly outdated. However, the vendor's off-shored web-ification of the application is a cut & paste spaghetti disaster (as easily observed in nearly 4K JSPs, each with one-off authentication code). This company was recently sold to another software vendor that seems to collect has-been cash cows, so it's clearly a couple steps from the graveyard.
I'm consulting for a Fortune 500 that has used a particular 3rd party system for a significant business function for the past decade. Since the vendor seems incapable of debugging its own system, I ended up reverse engineering parts of it to identify the bug. Then, a call was scheduled between me, the Fortune 500's application support folks, and the vendor's application support folks. The vendor's customer service supervisor and I were the only two people on the call who were not located in India.
An analysis of the application's architecture is a data point in support of your claim. The oldest pieces of the application seem to have some thought behind them although the implementation is significantly outdated. However, the vendor's off-shored web-ification of the application is a cut & paste spaghetti disaster (as easily observed in nearly 4K JSPs, each with one-off authentication code). This company was recently sold to another software vendor that seems to collect has-been cash cows, so it's clearly a couple steps from the graveyard.
So wrong I barely know where to start.
Why are drugs expensive when manufacturing them is cheap? Because discovering them is expensive. Why are games and movies expensive when burning a DVD is cheap? Because producing them is expensive. Why is news expensive when you can just publish it on the web? Because gathering interesting news is expensive and that's not changing anytime soon. People don't read a broadsheet to find out what's playing at their local cinema. They read stuff written by people who've been working on the story for 6 months, or 30 years building their list of contacts and their knowledge of a field.
The Times and the Encyclopedia Britannica, or some guy's blog and Wikipedia, world's gotta choose.
Why are drugs expensive when manufacturing them is cheap? Because discovering them is expensive. Why are games and movies expensive when burning a DVD is cheap? Because producing them is expensive. Why is news expensive when you can just publish it on the web? Because gathering interesting news is expensive and that's not changing anytime soon. People don't read a broadsheet to find out what's playing at their local cinema. They read stuff written by people who've been working on the story for 6 months, or 30 years building their list of contacts and their knowledge of a field.
The Times and the Encyclopedia Britannica, or some guy's blog and Wikipedia, world's gotta choose.
Some guy's blog and Wikipedia have been more accurate and interesting than news outlets for years now.
Most news outlets are just mills for regurgitating press releases wired over AP and Reuters. There's little actual reporting going on. It's much cheaper to run a paper this way -- fewer people working on the content itself allows you to print lots of paper with ads on it. Much of it is automated.
It's not like this is either some conspiracy or something unique to news. It's cheaper to run a restaurant by getting more of your stuff from Sysco. It's cheaper to build car lineups by basing more of them off of the same model and rebranding them. It's cheaper to print papers with ad space on them by automating the news portions as much as possible.
There's little reporting or fact checking going on. Only a few of the better papers aren't just regurgitation machines at this point, and even then, you're less likely to find hard-line reporting than years ago.
Most news outlets are just mills for regurgitating press releases wired over AP and Reuters. There's little actual reporting going on. It's much cheaper to run a paper this way -- fewer people working on the content itself allows you to print lots of paper with ads on it. Much of it is automated.
It's not like this is either some conspiracy or something unique to news. It's cheaper to run a restaurant by getting more of your stuff from Sysco. It's cheaper to build car lineups by basing more of them off of the same model and rebranding them. It's cheaper to print papers with ad space on them by automating the news portions as much as possible.
There's little reporting or fact checking going on. Only a few of the better papers aren't just regurgitation machines at this point, and even then, you're less likely to find hard-line reporting than years ago.
This is why I feel so little sympathy for the newspaper industry's problems.
If every paper started charging for access to their website tomorrow, the only ones worth bothering with would be AP/Reuters, NYT, WaPo, the Economist, and WSJ. A handful of papers produce 90% of the worthwhile, original content. The hundreds of other papers published today add little to nothing of their own.
If every paper started charging for access to their website tomorrow, the only ones worth bothering with would be AP/Reuters, NYT, WaPo, the Economist, and WSJ. A handful of papers produce 90% of the worthwhile, original content. The hundreds of other papers published today add little to nothing of their own.
Well, I'm starting to lose respect for The Economist. There were few articles from area that I'm involved in and the articles were just one sides' arguments, without contacting the other side. The article author just met with someone in nice restaurant, listened to them and then run with the info. There was no effort for digging deeper, it is cheaper after all and fills pages too.
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They read stuff written by people who've been working on the story for 6 months, or 30 years building their list of contacts and their knowledge of a field.
I read a lot and 99% is not what you describe.
Also, the difference between drugs and well-researched news stories is their perceived value. People perceive drugs to be of a high price and don't mind paying that price--especially when the drug has a patent. The same is not true for well-researched news stories: while there may be a niche customer segment that will pay for it, most folks that read news do not perceive the well-researched news stories to be of significant monetary value. The choice for newspapers then is to keep sinking money on expensive researched studies or adjust to a model which better addresses the needs of their customers, even if it means letting go folks.
I read a lot and 99% is not what you describe.
Also, the difference between drugs and well-researched news stories is their perceived value. People perceive drugs to be of a high price and don't mind paying that price--especially when the drug has a patent. The same is not true for well-researched news stories: while there may be a niche customer segment that will pay for it, most folks that read news do not perceive the well-researched news stories to be of significant monetary value. The choice for newspapers then is to keep sinking money on expensive researched studies or adjust to a model which better addresses the needs of their customers, even if it means letting go folks.
world's gotta choose
And has. A few will pay (to produce or to consume) better content. Some will lament.
Some vendors and some consumers will have better content and will find (some?) readers will pay. Most readers will be entertained by whatever manufactured news or whatever minimally-engineered product is presented. Those that are not sufficiently entertained can and will look elsewhere.
Having been subjected to watching the local "news" (and once you remove the shiny production sets and the perfect hair and computer graphics and event-specific theme music) and various of the mass-market low-cost products, there's "no there there." For me.
This is a fundamental feature of modern business; a business is led to monitor and to maintain or reduce expenses and overhead (long-experienced employees are expensive, long-term research is expensive) to stay competitive; it's effectively a slow race to the bottom. To how little news you can have (or software engineering skills, or new pharmaceuticals, or whatever the product...) to fill the allotted product slots and to meet your cost and revenue goals.
The world has chosen; both the producers and the consumers.
But around the edges of Big Pharma or Big Media? That's where all this consolidation and this business process optimization gets very interesting. Where you get bloggers that post (good) news. Where you get Dr Horrible's Sing-Along Blog, games, tools, or other productions. Where you get hundreds or thousands of musicians offering up music you'd never hear in mass-market media. Where you find the folks that'll buy. Same thing Big Pharma or Big Media are looking for. Except you don't have the overhead.
And has. A few will pay (to produce or to consume) better content. Some will lament.
Some vendors and some consumers will have better content and will find (some?) readers will pay. Most readers will be entertained by whatever manufactured news or whatever minimally-engineered product is presented. Those that are not sufficiently entertained can and will look elsewhere.
Having been subjected to watching the local "news" (and once you remove the shiny production sets and the perfect hair and computer graphics and event-specific theme music) and various of the mass-market low-cost products, there's "no there there." For me.
This is a fundamental feature of modern business; a business is led to monitor and to maintain or reduce expenses and overhead (long-experienced employees are expensive, long-term research is expensive) to stay competitive; it's effectively a slow race to the bottom. To how little news you can have (or software engineering skills, or new pharmaceuticals, or whatever the product...) to fill the allotted product slots and to meet your cost and revenue goals.
The world has chosen; both the producers and the consumers.
But around the edges of Big Pharma or Big Media? That's where all this consolidation and this business process optimization gets very interesting. Where you get bloggers that post (good) news. Where you get Dr Horrible's Sing-Along Blog, games, tools, or other productions. Where you get hundreds or thousands of musicians offering up music you'd never hear in mass-market media. Where you find the folks that'll buy. Same thing Big Pharma or Big Media are looking for. Except you don't have the overhead.
Your points are well taken, but many of us get information from trusted blog sources and Wikipedia, and hopefully we are discerning enough to be able to look at multiple sources, sometimes to engage in discussion, etc.
Now I like reading good news sources as much as the other person (the Britannica I will probably never read again unless a search takes me there), but the way to consume and find information has fundamentally changed for a large portion of the populace. Not sure if it necessarily means that news necessarily gets outsourced, but definitely gets fragmented and distributed. The key for news organizations (as opposed to a newspaper which is a medium) is to figure out how to stay relevant in that environment.
Now I like reading good news sources as much as the other person (the Britannica I will probably never read again unless a search takes me there), but the way to consume and find information has fundamentally changed for a large portion of the populace. Not sure if it necessarily means that news necessarily gets outsourced, but definitely gets fragmented and distributed. The key for news organizations (as opposed to a newspaper which is a medium) is to figure out how to stay relevant in that environment.
"Gathering interesting news is expensive and that's not changing anytime soon."
The rate of social change in America is so slow that even if you don't really understand what's going on, you aren't going to miss all that much. It's not like there exists this layer of dynamism, intellectually honest debate, and emotional nuance that we're suddenly going to start missing out on. If newspaper writing is formulaic then that's not a flaw in the writing, it's just an accurate reflection of American politics, life, and culture.
The rate of social change in America is so slow that even if you don't really understand what's going on, you aren't going to miss all that much. It's not like there exists this layer of dynamism, intellectually honest debate, and emotional nuance that we're suddenly going to start missing out on. If newspaper writing is formulaic then that's not a flaw in the writing, it's just an accurate reflection of American politics, life, and culture.
Your points are well taken, but many of us get information from trusted blog sources and Wikipedia, and hopefully we are discerning enough to be able to look at multiple sources, sometimes to engage in discussion, etc.
Now I like reading good news sources as much as the other person (the Britannica I will probably never read again unless a search takes me there), but the way to consume and find information has fundamentally changed for a large portion of the populace. Not sure if it necessarily means that news necessarily gets outsourced, but definitely gets fragmented and distributed. The key for news organizations (as opposed to a newspaper which is a medium) is to figure out how to stay relevant in that environment.
Now I like reading good news sources as much as the other person (the Britannica I will probably never read again unless a search takes me there), but the way to consume and find information has fundamentally changed for a large portion of the populace. Not sure if it necessarily means that news necessarily gets outsourced, but definitely gets fragmented and distributed. The key for news organizations (as opposed to a newspaper which is a medium) is to figure out how to stay relevant in that environment.
I don't agree when it comes to a movie review as I'd be more likely to consult the blog of an "amateur" who has similar tastes to my own.
W.R.T. hard core investigative journalism, I think the traditional pubs still win. The Cleveland Plain Dealer just spent the past year or so investigating Cuyahoga County (within which lies Cleveland) government corruption. As a somewhat direct result, a ballot initiative passed to significantly change the form of county government. I bet the paper invested well over $1M in reporting. Did it pay off? No clue, but I sure hope so.
W.R.T. hard core investigative journalism, I think the traditional pubs still win. The Cleveland Plain Dealer just spent the past year or so investigating Cuyahoga County (within which lies Cleveland) government corruption. As a somewhat direct result, a ballot initiative passed to significantly change the form of county government. I bet the paper invested well over $1M in reporting. Did it pay off? No clue, but I sure hope so.
I think your analogy with games and movies (and to a lesser extent drugs) is quite apt, but I'd say that the major reason why those things are expensive is that there are specific, government-enforced limitations on supply.
Perhaps we can expect more of this in the future:
"We didn't know the Onion was not a real news site."
My first reaction on reading this article was wondering whether it came from The Onion...
This has been tried with tech support. A lot of companies that did this have since moved call centres back to North America. Why? Because the customers revolted.
So the only thing this will achieve is to speed the death of the newspaper. Instead of differentiating themselves from all the spamblogs out there they seek to join them. They seem to not understand that the only purpose of those is to game Google rankings, which don't exist on paper.
So the only thing this will achieve is to speed the death of the newspaper. Instead of differentiating themselves from all the spamblogs out there they seek to join them. They seem to not understand that the only purpose of those is to game Google rankings, which don't exist on paper.
The likelihood of news jobs going overseas aside, I would enjoy a more global flavor to news in the United States. I often find the BBC's take on current events illuminating, and I'd be interested in quality coverage from other parts of the globe.
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Here's other links to his work: http://mugshots.tampabay.com/ http://hometeam.tampabay.com/ http://watch.tampabay.com/homes/
Journalists have a lot of training at tracking down public data sources, be it local home sales, sports scores or crime statistics. Those data sources things are just crying out for web applications. Matt's taken that idea and run with it. I hope other newspapers follow his lead, rather than simply outsourcing all their local coverage to Mumbai.