What Can You Profitably Outsource?
The Huffington Post model: outsourcing everything
May 2008 By Denny Hatch
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In the News
TV News Stations Try CooperationNBC10 and Fox29 will, for a week, experiment with sharing video footage.
In an unusual experiment among network-owned local news stations, WCAU (NBC10) and WTXF (Fox29) are sharing some video footage this week. The arrangement, acknowledging the economics facing media as well as the redundancies in some coverage, is a test to “see if we can cooperate on some newsgathering in the field,” according to a memo circulated Monday to NBC10 staff by news director Chris Blackman. The cooperation, which both stations will assess at the end of a week, extends to events such as news conferences and other planned events that both stations would cover anyway, Blackman said in his memo, adding that “helicopter resources” also would be shared.
— Michael Klein, The Philadelphia Inquirer, April 23, 2008
When I read last week that two Philadelphia TV stations—Fox29 and NBC10—are going to test the possibility of sharing video footage, I was intrigued. The idea that competing news gatherers would pool their resources is a breakthrough!
For example, CBS and CNN spend millions of dollars on equipment and personnel gathering news in Iraq, mostly going after the same stories, interviewing the same people and doing stand-up reporting from inside the Green Zone. Three weeks ago, The New York Times reported that CBS was negotiating to buy news feeds from CNN. Brilliant!
Alas, later that day, both Hollywood Reporter and Variety said it was rumor. “We’re extremely satisfied with and proud of our newsgathering operation,” a CBS spokesperson said. “No outside arrangements are being negotiated.”
Pride is a dumb reason to waste millions of dollars duplicating somebody else’s perfectly good work.
Four Hovering Helicopters
In the run-up to the Pennsylvania primary election, Barack Obama held a rally near the Wynnewood home of our friend Russell Perkins, the savvy proprietor of InfoCommerce Group. Perkins related that the four competing news helicopters hovered over the event for hours. Not only were they sucking up fuel, pilot salaries, camera operators and newsreaders, but also irritating the hell out of homeowners down below.
And for what? Four sets of identical footage. The whole preposterous exercise was the ego trip—the silly pride—of four competing news directors who could have sent up one helicopter, shared the results and paid a quarter of the cost each.
A Vestigial Business Model
Once upon a time, owning a local newspaper or radio or TV station meant having a monopoly on the community and a license to print money. No longer.
News and information now comes from many sources—old-fashioned newspapers, the Internet, 24/7 cable TV, the car radio and alerts on a cell phone. Advertising dollars are being spread around these myriad media. Craigslist is systematically destroying classified ad business. Change must come, or all local media will collectively die.
Outsource! Outsource! Outsource!
When my wife Peggy’s parents were alive, we used to visit them periodically in Montgomery, Alabama. Every morning there I read the Montgomery Advertiser, a Gannett paper.
Takeaway Points to Consider:
* In more jobs than I care to remember, my single objective was efficiency: How could the most value be created for the least cost, and then sold to delighted customers and eager prospects at the highest profit?* The advantages of outsourcing—using consultants and freelancers
1. With consultants, you have top people with vast experience who are living by their wits working for you, so they must be good at what they do. If they were no good, people would not hire them.
2. It’s clean. No overhead, no benefits, no expense account (unless previously negotiated), no moving expenses, no tax deductions or bookkeeping. Get bill, pay bill.
3. Consultants frequently have wider industry experience than in-house people, and can call on the knowledge and experience of a wide circle of business contacts.
4. If either of you decide to fire the other, there is a minimum of angst (as opposed to a full-time employee).
* Disadvantages of using consultants and freelancers
1. The fee may be higher than you would pay in salary to a full-time employee.
2. Do not expect a consultant to be working exclusively for you. Other clients will also get attention.
3. Employees sometimes feel threatened and bring out the short swords to savage the work of outsiders. Good consultants will be sensitive to this and sell themselves to the Indians once they have sold themselves to the chiefs. But interpersonal relations can be a problem.
Web Sites Related to Today's Edition:
About Boardroom Inc.http://tinyurl.com/6gmbtc
The Huffington Post
http://www.huffingtonpost.com/
Companies Mentioned:
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