Writing on the wall for outsourcing newsrooms

This column appeared in the September 2015 issue of the PANPA Bulletin

To say that outsourcing has become a dirty word in New Zealand is an understatement. It has become a real stinker.

The source of the outsource odium is a British-based multinational called Serco, which manages the Auckland Remand Prison where serious assaults by prisoners and the death of a man on 24-hour suicide watch have led to it being described as “a hellhole”. The same company runs the Christmas Island Detention centre.

There have been increasing calls for the New Zealand government to cancel the Serco contract. It has already been forced to launch an enquiry and install a Corrections Department trouble-shooter to oversee running of the prison.

I concede that using this to introduce a column on outsourced sub-editing and page production is shameless attention-seeking. However, and in my defence, I would say that they have one thing in common. Irrespective of whether it is a prison, a hospital, a newsroom or a press hall, the principal purpose of outsourcing is to save money.

It is an equation that worked while the traditional concepts of newspaper production remained in play. Fairfax’s Australian regionals and the New Zealand newspapers in APN’s stable found Pagemasters an attractive proposition. The page-ready production service co-founded by (now) AAP chief executive Bruce Davidson and acquired by AAP in 2002 could sub-edit and paginate with fewer people and at lower cost. It was music to the ears of newspapers under pressure from shareholders to cut budgets.

And the sums added up. Pagemasters did deliver lower production costs and, despite friction due in part to geographic separation, newsrooms and Pagemasters collectively managed to keep the editions rolling out. The service attracted customers from as far away as the United Kingdom and AAP’s counterpart Canadian Press entered into a franchising deal in order to offer the service in North America.

However, after more than a decade of smooth sailing, Pagemasters has found two limpet mines attached to its hull. It remains to be seen whether they have been placed in positions that could sink the ship.

Both mines are digitally-activated. One is Fairfax’s decision to have reporters sub their own copy as part of the NewsNow rollout. The other is the decision by APN subsidiary NZME to merge the New Zealand Herald and The Radio Network newsrooms. In both cases the result has been the ending of Pagemaster outsourced production contracts.

Pagemasters may give itself some breathing space by opening a lower-cost operation in Vietnam but recent events highlight what have proven to be two fundamental weaknesses in the outsourcing model: First, it replicated stages of established newspaper production that could be overtaken by technology; and it was ill-equipped to have a natural role in an intensive digital-first multi-media news operation.

It is now evident that news production needs to be based on shorter process chains, multiple channels and constant output. The editing interventions that remain in those process chains – which will not be limited to text and still images – will need to be tightly integrated into highly complex production systems.

Short process chains are a reality. Major newspaper groups have committed themselves to digital first production with increasing numbers of stories going straight from reporter to websites and mobile apps or written directly into newspaper page templates. Theoretically, this removed the need for both text and layout subs (I say theoretically because a string of heavy-duty defamation awards could rapidly change attitudes). Any intervention in this process is most likely to be internal – from senior editorial staff – and based on exceptions rather than routines.

Convergence adds production demands that are medium specific as well as compressing deadlines to the point where output is continuous. And the pace of convergence is growing, particularly among groups with existing assets in different media. Seven West Media in Perth combined West Australian newspaper and Channel 7 television newsrooms, MediaWorks in Auckland combined its radio and television newsrooms and the Herald/Radio Network merger will be complete before the end of the year.

Is page-ready production outsourcing sustainable in an environment that has changed so significantly in the past decade? It was designed to simultaneously produce pages for multiple mastheads but it was not designed to meet the needs of hydra-headed operations. If they are to survive, providers will need to rethink their game plans beyond the downsizing of the New Zealand operation that Pagemasters has already announced.

Perhaps the answer lies not in being part of the production chain but in providing the complete package. There may be a place for a business model in which the entire editorial content is outsourced. AAP is already a gatherer and producer of news. Should it consider its own brand of convergence by integrating Pagemasters into an upgraded multi-media full-service provider? There is something of a precedent: MediaWorks provides the news bulletins of New Zealand’s Prime television channel.

Or will outsourcing go down in history as one of the brave but fleeting endeavours to find a new business model in a media landscape changing at the speed of light? Time, and not much of it, will tell.

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