Are Magazines Next?

Folio: The Magazine for Magazine Management, June 1, 2004 by Karen Holt

Byline: Karen Holt

"We move medical writing offshore. And for that, I apologize to all the freelance medical writers I have worked with in the past (and paid handsomely!) because now my company can do what they do, but for half the price," writes Lombardo, whose post-Whittle positions have included editor-in-chief at WebMD. "I won't be speaking at the American Medical Writers Association meetings anytime soon because I don't own a Kevlar vest."

Another American entrepreneur, Ted Fong, sends out letters to small publishers soliciting clients for his Manila-based company, Boma, offering "design, layout, content development and advertising telesales," at a price that's half of what it typically costs to have the work done in the U.S.

Meanwhile, Office Tiger, a New York-based publishing services company that does most of its work in Chennai, India, is building a design studio in India and bringing over a designer from the U.S. to run it. The firm hopes to attract more U.S. magazine clients for its full range of production work. "I think where publishers would most likely use us as a starting point would be design execution, where we are working with designs that have been established," says Michelle Breault, senior vice president of content and prepress services. She expects more publishers to turn to the firm for original work "as we migrate to that broader design capability."

It's an increasingly familiar picture: the transfer of work that was once done by full-time employees in the U.S. to overseas contractors for a fraction of the price. It's a fait accompli in customer service, direct marketing and information technology. Now, it's the magazine business's turn. Editorial, design, production and advertising functions are all being performed cheaper - and some contractors and publishers claim better - overseas.

The move abroad is just beginning, but experts believe the shift overseas is inevitable. For publishers that have already slashed staff, reduced editorial pages and shifted work onto freelancers in place of full-time staff, this represents the next frontier in cost-cutting. "I think the opportunity is that one can inherently make a new magazine start-up less expensive," says Atul Vashista, CEO of outsourcing consultancy firm NeoIT. "One can reduce the production costs of putting a magazine out."

Clearly, magazine production presents many of the same conditions that provided the offshore opportunity for other industries. Publishers are already accustomed to telecommuting sales reps, near-virtual editorial staff, outsourced art direction and design, outsourced Web programming, outsourced circulation fulfillment, etc. That can put magazine jobs into the great pool of the potentially offshored. According to a report published by the University of California, Berkeley last fall, as many as 14 million jobs could be shifted outside the U.S. by 2015. None of the research focused exclusively on the magazine business, but the report made clear just how vulnerable jobs in the industries that have the following characteristics are: "The lack of face-to-face customer service, work processes that enable telecommuting and Internet work, high wage differentials between countries, a high information content, low social networking requirements and low set-up costs."

That list applies to a number of jobs in an industry that is increasingly migrating online - especially for a freelance copy editor or proofreader working out of his home for editors he's never met. Copy editors and graphic designers are among the employees listed as being at moderate risk of losing their jobs to overseas competitors by job counseling Website careerplanner.com. "I was using a copywriter to write a couple of pages for me and I found she was farming some of it out," says Michael Robinson, founder and owner of careerplanner.com. "Her proofreader was local, but there was no reason she couldn't send it to India."

Threat or Opportunity?

The current face of magazine offshoring can be glimpsed in the moist puppy dog eyes staring out from the cover of the latest issue of Fido Friendly Magazine, a quarterly for people who travel with their dogs. The magazine's co-founder and editor-in-chief, Nick Sveslovsky, who started the publication with his mother in 2001, answered a solicitation from Boma last year. He says that since the magazine was created, "I had been doing the design and production all myself, and we just didn't have the resources financially to outsource to someone in the U.S. where the prices are ridiculous." Sveslovsky estimates that by using Boma he pays about half what it would cost him to have the work done stateside. He sends Boma the raw material - including a photo of the next issue's "cover dog" - and designers in the Philippines do the rest. The arrangement frees him up to concentrate on editorial and increasing the magazine's frequency. "With Boma, it'll happen a lot sooner than I would have thought, hopefully pretty soon," Sveslovsky says.