Offshore publishing picks up

November 28, 2009

Recently Financial Post carried a news mentioning that The Toronto Star has asked its entire unionized and non-unionized staff to take voluntary severance packages as the newspaper is toying with the idea of contracting out most of its editorial and production functions.

If this is the state of affairs with Canada’s largest paper by circulation, one can imagine what state other print and publishing companies would be. The Toronto Star’s parent company, Torstar Corp., incidentally posted a $12.2-million drop in operating profit for its newspapers-and-digital segment in the second quarter of 2009, compared with the same quarter last year.

The easy availability of digital technologies undoubtedly has opened up new vistas for desktop publishing, including end-to-end operations starting from typesetting to graphics to physical printing of the content. At present, the total publishing outsourcing revenues of the Indian industry are estimated to be around $200 Million, while the global opportunity for publishing outsourcing is estimated at $8.1 billion.

Outsourcing completely or part of your publishing business to low-wage countries is in fact not a new trend. Macmillan, Thomson Digital and Techbooks have been doing it for ages and servicing international customers from their bases in India and China for over a decade.

Global publishing majors like Elsevier, McGraw Hill, Cambridge, John Wiley, Clover, Royal Academy Publishers, Pearson and Tailor & Francis routinely outsource to India and big Indian BPOs include Techbooks, Thomson Press, Innodata, Planman ITeS and Quark. According to sources, Wipro and Reliance are also planning forays into this market.

The trend of outsourcing in this industry is in fact so well-established and profit margins so high that a deluge of Indian BPOs further outsource their work (Nearly 70%) to local printers. The Indian publishing BPOs currently employ about 35,000 professionals and there is demand for 20,000 more in the next couple of years. Seeing the opportunity venture capitalists re also getting drawn to the sunshine sector. American Capital Strategies recently announced (http://www.mydigitalfc.com/jobs/india-hub-publishing-bpos-565) $45 million fresh investment in Techbooks
With all this and more, the publishing BPO business is clocking an annual growth of 30% in India with profit margins oscillating between 30-40%. The sector mainly caters to the US and UK markets.

Recently, Bowne & Co. awarded a $29 million outsourcing contract to Aptara, an Indian-owned publishing services company with a large offshore presence, while RR Donnelley another large global vendor has opened a new office in Chennai. The main driver is the cost arbitrage and large talent pool available in India skilled in composition, data conversion, XML solutions and content creation.

offshorePublishing Offshore publishing picks up
Some time ago, financial news service Reuters’ decided to move its editorial jobs from US and Europe to India, along with Time Warner’s magazine Business 2.0. Meanwhile, technology news portal CNET outsources a bulk of its industry reports and news alerts to India in order to take advantage of the time zone variance and dish out fresh news from 6 am onwards. Likewise, UK-based Pearson group is getting a lot of its back office work done from New Delhi, with the result that the outsourced publishing services business is doing a turnover of over Rs. 1,000 crore annually in India.

In terms of the services sought, according to a new study for companies that outsource, custom publishing companies are their top choice, up to 35% from 23% in 2006, followed by design firms (30%), advertising agencies (28%), other companies (10%) and PR firms (8%).


Comments

2 Responses to “Offshore publishing picks up”

  1. Qim Smith on November 30th, 2009 2:04 am

    Outsourcing completely or part of your publishing business to low-wage countries is in fact not a new trend.The Indian publishing BPOs currently employ about 35,000 professionals and there is demand for 20,000 more in the next couple of years.its very nice.offshore is a good term of growth.

  2. forex robot on December 17th, 2009 8:55 am

    nice post. thanks.

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