Publishing: Driven by digital trends

Wednesday, 04 November 2009

Publishers have jumped onto the digital bandwagon and have built consensus on the need to develop better content and do away with the over-dependence on print. But, the means to address the digital market has been mostly trial and error.   Developing digital offerings as a strong revenue stream is a totally different proposition. Compounding publishers' woes is the impact of the economic slowdown. While costs have been steadily rising, revenue growth has taken a hit (read: newspaper and magazine publishers). The publishing industry has agreed upon the need to digitize, develop better content and be judicious about the use of print. Developing a strong revenue stream out of Web dollars requires innovation and a strong value proposition. Publishers have adopted a trial and error approach to resolving their problems. Along with developing a digital presence, each publisher is trying to do something unique, which means there is no standard formula that the industry can adopt. In such a scenario, it becomes even more difficult to understand how the industry is shaping up. So, will publishers outsource/offshore because of revenue pressures? Will they be willing to undergo the many months of transition to outsourcing to save costs? The key to answer this question is the publisher's sustainability. Its one thing for a publisher to outsource for increasing profitability and quite another to outsource when the publisher can’t sustain. Until there is more stability in the industry, publishers will look at growing revenues more aggressively than saving costs. What does it mean for publishing BPOs? The Indian publishing BPO industry has been at the receiving end of the publishers’ dilemma in terms of erratic work flow, lower prices and lower-than-expected revenue growth. A recent Publishing BPO Conference organized by CII in Chennai focused on sustaining publishing BPO industry in India in the light of current challenges. Various companies such as Pearson, SPi, Integra, Thomson Digital, Aptara, TexTech, SPS shared their perspectives on issues, challenges and opportunities in the industry. We presented initial findings from our ongoing buyer survey and pre-launched our proprietary vendor rating model. The discussions at the conference echoed the challenges that the publishers are facing in a very trying business environment. The focus on everything ‘digital’ was re-iterated by many service providers and has emerged as a strong trend. Content remains a function that publishers are keen to outsource but the lack of capability (and the inability to scale up) on the part of service providers is creating a supply bottleneck. However, with this challenge come opportunities higher up the value chain. Another big challenge that needs to be addressed is ‘sustainability’ of service providers. The publishing outsourcing industry is under intense price pressures, with buyers negotiating low prices for higher volumes. With increased volumes, there is an inherent risk of over-exposure to a single buyer. A few service providers have started addressing the risk of over-exposure through diversifying into new services, segments and geographies. However, all said, it won’t be an exaggeration to say that the global economic slowdown coupled with the digital revolution in the publishing industry has added a tinge of optimism among service providers - in anticipation of the volume of outsourcing that is likely to materialize. If not right away, soon enough!

 

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