When Belo Announced That 111 Employees At The Dallas Morning News Had Accepted Buyouts The Reuters Story Was Not Written in Dallas, Nor New York, But Rather In Bangalore, India. Bangalore, India?

Philip Stone September 18, 2006

Even though Reuters has 350 journalists in the US, it is not enough to report all the financial news that originates there every day. Yet Reuters’ US-based journalists are among the industry’s highest paid, so it’s an expensive proposition to add staff to handle the rewrites of news releases from the multitude of mid and small-capitalized companies. Simple solution: hire 100 journalists where it is not so expensive to handle the overload and with modern-day communications there’s no reason why they really need to be in the US.

So why not set up shop in, say, Bangalore, India’s seventh largest city, and let those lower-paid journalists handle the uninspiring news releases that flood the PR newswires every day, and leave the expensive-paid staff back in the US to work on the big companies, and have the time to go for exclusives, interviews and the like.

It’s what Reuters has done since October, 2004, and David Schlesinger, global Managing Editor and head of editorial operations, says he is real happy with the results. “Bangalore has let us expand the universe of our coverage dramatically, and increase the number of beats and exclusives done by journalists in New York,” he said in an email exchange from Reuters’ Time Square offices to the ftm world headquarters in Geneva, Switzerland, making the point that ftm did not have to be present in New York to get this story.

It was the first and lasts paragraph of its 1st Update news story about Belo on reuters.com that caught FTM’s eye. Those paragraphs, as they appeared on the web site:

“Sept.14 (Reuters) – Belo Corp<BLC.N> on Thursday said it bought out 111 employees from the Dallas Morning News under a previously announced voluntary severance package that will cost it about $6.7 million.”

And the last paragraph of the eight-paragraph story:

“Shares of the company were down less than 1 per cent at $15.86 in morning grade on the New York Stock Exchange. (Reporting by Kuncheria Cholemkeril in Bangalore)”

That lead credit line had something missing – there was no dateline.  For a Dallas-based story where Reuters has a bureau one would have expected it to start: DALLAS, Sept. 14 (Reuters)…

And then the answer to why there was no dateline was right down there as the last words of the item – the story came out of Bangalore, India.

The story reads no differently to the hundreds of other stories Reuters produces with the exception there are no original quotes from any analysts or others saying what they think about Belo  spending $5 million in severance in order to save $9.9 million annually. What you get is a rewrite of the Belo news release, some background information, and the effect the announcement had on the company’s share price.

Let’s face it, it did the job. Some original reporting on market reaction, besides the share price, would have been nice to those of us most interested in the media sector, but obviously Belo doesn’t rank high enough to warrant that,  whereas when the New York Times Company announced in the same week that it was selling its television division then that did warrant some original reporting. It all depends who you are and how big you are.

Schlesinger agrees that not every story can be done remotely, and you just need to be on the spot for the necessary color, but he also says that not every story needs someone on the spot either, and his explanation of why he is doing what he is doing should not be lost on others:

“Too much agency journalism involves having to write stories at your desk from stuff flowing in over the fax or the computer wire or the Internet or the phone. And that’s why I am doing Bangalore – to use good journalists in a centralized location to do the work that can be done anywhere, and to use other good journalists on the spot where news is happening, to go to press conferences, develop the sources and get the color,” he wrote.

“The key is developing cooperation between the remote journalist and the on-the-scene journalist, between an generalist who might deal with any number of different companies in the course of a day and a specialist who might further develop a story started in Bangalore.”

He says Reuters now has around 100 journalists in Bangalore and they are adding significantly to the file. “I’m very happy how it has gone so far – I hope to continue to develop it,” he said.

The Bangalore center, opened in October, 2004,  is not just a journalistic center for Reuters. Data, technical, financial and technical departments along with the journalists are forming what is planned to be Reuters largest single hub of information gathering, with about 10% of the company’s total workforce to be  eventually based there.

But when the company’s US journalists heard in early 2004 what was afoot there were fears the whole idea was to fire expensive US journalists and hire cheap Indian help, and there were plenty of protests.

Reuters' David Schlesinger

But Schlesinger says there had not been a reduction in the US journalistic resources, but rather their effort has been redirected so they can come up with exclusives and the like.

He accepts that often Bangalore may provide the first break on a story, but if necessary the story then gets handed off to a specialist in New York.

Other news organizations used to make fun of the Reuters Bangalore operation.  Earlier this year, for instance,  Dow Jones CEO Richard Zannino joked with reporters  at a newspaper convention that Dow Jones wasn’t about to cover New York from India.

But since then Zannino has ordered a complete review of editorial resources, particularly looking for ways  to reduce the cost of producing what the company  calls “commoditized” content -- such as regular stock market reports -- to allow editorial resources to concentrate on unique, differentiating content.

Say, doesn’t that sound exactly like what Schlesinger was saying? If imitation is the sincerest form of flattery …

ftm Follow Up & Comments