The US Newspaper industry has been battling growing margin pressures since the last few years. Dwindling circulation, drop in advertising revenues, growth of the internet and rising newsprint prices have contributed to the downward trend in margins. Amongst measures like reducing global coverage, cutting edition sizes, streamlining resources and cutting excess jobs, several leading newspaper companies are evaluating offshoring. Over the last couple of years, there has been an increasing trend of US-based newspaper publishers offshoring to India. This trend is set to gain traction in the next few years. The offshore opportunity from newspaper publishers (including the US and UK) is estimated to be approximately $3.5 b.

Services Offshored
The services currently offshored by the newspaper companies can be classified into three major groups - Production, Sales & Marketing and Archival. While Production and Sales and Marketing are cost heads for a publisher, Archival is an investment in creation of a revenue stream.

Source: ValueNotes' Report - "Offshoring by US Newspaper Publishers"

Amongst all cost heads of a newspaper publisher, almost all services are outsourceable; however, offshoring provides maximum leverage for ad production services since this is easier to provide from India. Currently offshoring has been initiated by the Tier 1 newspaper publishers in the US, and is largely limited to ad production services. However, as offshoring matures, the Tier 2 and Tier 3 publishers will offshore a wider range of services to India.

The Offshore Scenario
Currently, the offshore service provider landscape is at a nascent stage with only a handful of vendors in India actively focusing on the newspaper segment. The total offshore manpower employed in the newspaper outsourcing industry was approximately 2,300, as of July 2008. The overall revenues of the industry offering services to the newspaper segment (including to the US and the UK) are estimated at $35 m in 2008. Affinity Express, Express KCS, 2AdPro and Mindworks Global are the industry frontrunners. Given the current lacuna of 'end-to-end' service capability amongst vendors, we expect the early entrants to grab this slot. Vendors are likely to build complementary capabilities to achieve this objective.

Going Forward
We expect Indian offshore revenues from the newspaper segment to reach $120 m by 2012. The offshore manpower is likely to cross 5,500 by 2012. Due to low offshore penetration in the global newspaper market, significant opportunity exists across the service chain for existing vendors as well as new entrants. Traditional publishing BPOs, Indian graphic design firms and Indian newspaper publishers are well poised to grab the opportunity; however they will need to tool themselves with new skill sets to service the global newspaper publishers.

 The latest ValueNotes report, "Offshoring by US Newspaper Publishers " provides information and analysis of the US newspaper Industry and a detailed analysis of the Indian service provider landscape. Profiles of vendors operating in this space are also available. For more information write to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

ValueNotes will hold an Executive Briefing for release of the above report in Chennai on the 13th September 2008. Interested participants can get in touch with Neeta Joshi at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it