Posted on Jul 3, 2012 in Future of News | 2 comments

I am struck by the recent angst over Journatic’s use of fake bylines. The byline business is regrettable, but I wonder how much of the issue is really about the Tribune’s investment in Journatic, and the resulting loss of half the Trib’s hyperlocal staff.

The Journatic model of outsourcing “grunt work” to offshore sources will be familiar to anyone who has followed US business trends over the past 20 years. Companies want to stay in business, and even those that aren’t under significant financial pressure will embrace operating efficiencies.

The news industry is under terrible pressure–most of it due to digital inaction: an incomprehensible failure or worse, a self-inflicted refusal to sell the new media advertising products that businesses are actually seeking at record levels–and Journatic offers a model that increases inventory while cutting costs. That makes this model all but inevitable.

Offshoring has happened across many American business sectors, from manufacturing to knowledge work. Even legal firms are offshoring patent writing and research to India. In the software industry, it is quite a common practice to offshore certain tasks like software quality testing. This was bemoaned by the industry at the onset, and the quality of service started off fairly low, but over the past decade it has become an industry standard.

The old argument goes something like this: do American workers really want to do the rote tasks, or do they want to focus on the skilled work? If companies can efficiently cut costs by offshoring the grunt work, those savings can be used to fund innovation back home.

Of course, it doesn’t always work that way; sometimes US workers simply lose jobs, the savings are poured into management bonuses, and the product suffers. But just as often when companies forfeit quality, there is a correction as they lose market share and realize they need to improve the product. Hopefully we’ll see that trend in journalism, where consumers should, and do, demand quality reporting.

But many in the world of journalism, despite their focus on news, seem to have remarkably little sense of their place in the new world order. The newspaper industry is struggling to stop a revenue freefall, and offshoring practices are of course painful for the journalists. But it doesn’t have to be this way.

Let’s think about this from a business perspective (which is really the only way to look at it). Say you add offshore staff to supplement your reporting with a full complement of articles collected from easily accessible community sources on the internet: legal notices, birth and death notices, real estate sales, crime stats, sex offender databases, sports results, school test scores, court reports, and so forth.

There is a small investment to be made there, but that investment could pay off. Yes, you could lay off some of your US team, but why not try the high road first, at least for say 90 days. Your US staff can focus on writing better quality articles that really engage the community on a deep level: investigative journalism, in-depth articles, local hero interviews, photo slideshows, videos, event coverage: things that get the journalists out of the office and into the community.

Now you have a greater amount of inventory (those “data reporting” articles plus the good work of your local journalists), you have more quality journalism, and you have a greater community presence, which should all add up to more reader engagement and loyalty and more advertising revenue from local businesses.

Now, if you have staff that can’t write well, or take good photos, or shoot reasonably acceptable video, then you need to replace or re-train them. But what industry doesn’t need to adapt and invest in order to remain viable?

Ultimately, cost-cutting is not a long-term strategy. The real strategy is to increase both inventory and quality, while adopting the new media advertising that local businesses are seeking: online coupons, sponsored content (yes, infomercials and advertorials), microsites and other mobile and web-based advertising platforms, social media packages, digital sponsorship packages, mobile apps, online catalogues and shopping carts, business directories, and a host of other new products to make up for the drop in traditional revenue sources.

Local businesses are embracing new media advertising. Gannett recently cited a $140 billion-dollar market opportunity, and launched Gannett Digital Marketing Services to tackle it. There is no reason to cut out quality journalism. There is a only the need to embrace the revenue models that will support it.