Chennai, India, 13th September 2008

ValueNotes conducted an executive briefing session on Saturday 13th September 2008 in Chennai to present the findings of their latest report, 'Offshoring by US Newspaper Publishers' . The session was well-attended by senior executives from newspaper publishing service providers like Express KCS, Ad2Pro Media Solutions, Affinity Express and traditional publishing BPOs- Integra, Macmillian, Premedia Global, Tex Tech and S4Carslile, among others.

The briefing started with a presentation on the key findings and trends in the US newspaper offshoring industry. The US Newspaper industry has been battling growing margin pressures in the last few years. ValueNotes estimates the offshore opportunity from newspaper publishers to be approximately $3.5 b, while the estimated Indian offshore revenues currently stand at $35 m thus highlighting the huge untapped potential.

Most Tier 1 newspaper companies are experimenting with offshoring. By 2010, the US share in the global newspaper market will shrink to 28% from 35% in 2006.

Currently, the offshore service provider market is at a nascent stage with only a handful of vendors in India actively focusing on the newspaper segment. Opportunity exists for Indian newspaper publishers, graphic design companies and existing publishing BPOs.

The subsequent panel discussion was very interactive, participants posing questions to the panelists. The panel comprised Mr. Tariq Husain, COO- Express KCS, Mr. Pervez Sikora, COO- Ad2Pro Media Solutions, and Mr. Piyush Sharma,Vice President - Finance Laserwords Private Limited.

The first issue brought up in the discussion was the challenge in scaling up this business: Mr. Tariq Husain said that training was a big challenge for scaling up operations. He mentioned that Express KCS, has a 3-month training period before an employee can work on actual projects. He added, "Much as we may hate to say, devil is in the detail and this is the key to scaling up successfully". Mr. Pervez Sikora agreed with this, and added, "Transition is an extremely meticulous process and training employees is the key". Mr. Piyush Sharma agreed and added that scaling up was all about thorough planning and vision.


When asked how difficult it was for traditional publishing BPOs to enter this segment, most panelists could not pinpoint the reason. Mr. Husain elaborated on Express KCS's journey from ad layout services for smaller newspaper and firms to higher value copy-editing services. Mr. Sikora said that customers in this segment were either very large corporate organizations or traditional family-run businesses. He added "Publishing heads are not very open to outsourcing. Most decision makers have typically risen from the ranks and customer-side push is a little slow in this industry". He mentioned that the leadership landscape in these organizations was changing- they now have younger decision-makers who are open to outsourcing as a measure of cost-cutting and added that founders of Ad2pro had a strong background in the newspaper industry and this worked to their advantage.

Panelists were unanimous about the fact that an onshore presence, however small, was essential to instill confidence and provide comfort to the client.

Panelists agreed that the key to moving up the value chain is to start out with low-end processes and build up the client's confidence. Moving to higher value processes followed a natural path thereafter. The panelists mentioned that there was a great potential for this industry to grow given the fact that the US newspaper industry was battling severe pressures today.

Our Report - Offshoring by US Newspaper Publishers - corroborates the above stating, "Copy editing, another high potential opportunity will not take off in the near term, but will gain momentum only around 2010. Vendors will need to create a mix of onshore-offshore teams to deal with the issue of catering to cultural nuances and providing scalable copy-editing services".