Say 'Adios' to Those Creative Jobs, Amigo 

A consideration of the economics of Spanish-language newspapers provides a glimpse into the global future of creative work.

It's no secret that times are tough for big metropolitan daily newspapers. The San Francisco Chronicle posts annual losses of $60 million, and last month, editors at the San Jose Mercury News announced they would lay off 52 newsroom employees. But officials with Knight Ridder, the Merc's parent company, seemed to have figured out that smaller is better, buying or starting microdailies like the East Bay Daily News even as they downsize their legacy paper in San Jose. While gray, ponderous dailies crack at the seams, smaller, nimble niche publications are the wave of the future. Nowhere is this more evident than among Spanish-language readers. The Bay Area is projected to be 25 percent Latino by 2009, and the Merc's owners seemed poised to serve that community with their Spanish-language paper Nuevo Mundo. That is, until they shut it down.

When former Merc publisher Jay Harris started Nuevo Mundo and Viet Mercury in 1996, he really seemed to be on to something. Harris set out, he said, "to insure as best we could the Mercury News was meeting the news and information needs of residents of the greater San Jose community, without regard to language." He hired Spanish- and Vietnamese-speaking reporters and editors, paid them union wages, and put them to work cultivating sources and getting a feel for communities often overlooked by his English-speaking reporters. "Any reportorial activity involves getting out of the office and being familiar with the priorities of the community you're talking with," Harris said. "That is something that comes from reporting on that community, being there to talk with people."

Nine years later, despite the incessant growth in Spanish-speaking readers, the Merc announced it was closing Nuevo Mundo and selling the Viet Mercury. Why did it fail? The community was already doing a better job reporting on itself. According to Dan Breeden, marketing manager for the Mercury News, no fewer than three local competitors regularly posted higher levels of circulation than Nuevo Mundo. El Mensajero and El Observador both distributed thousands more papers, and El Evisador circulated almost three times as many editions as the Merc's product. In the end, Breeden estimates, the company lost $7.5 million keeping Nuevo Mundo afloat. "We were just never able to reach a point where we were a strong enough player to have the types of rates we would need to make a profit," Breeden said.

The announcement shocked the staff of Nuevo Mundo, which still thought it was the future of journalism. "We were greatly disappointed, because we thought we were doing a good job of reaching out to our community, and then upper management comes back and says the numbers aren't looking good," one employee said.

But according to Breeden, the competition was just too tough, and the overhead too high, even with Knight Ridder's economies of scale. "There's never been a year that it's been in the black," he said. "It was a very tough decision. It was something that was put off for quite some time, in the hopes that we'd see these numbers change, and we'd see some type of profitability. The fact that the Mercury News stayed in Nuevo Mundo for nine years is proof that this wasn't some type of whimsical experiment."

Meanwhile, officials with the Contra Costa Times, Knight Ridder's other major media property in the Bay Area, think they've figured out how to serve a Spanish-speaking readership and stay in the black: farm the whole thing out to Mexico. While the Merc is shutting down its Spanish-language newspaper, the Times just announced that it will publish Fronteras de la Noticia, a weekly tabloid of Latin American news.

Here's how the Fronteras arrangement works. The Times will e-mail stories written by its English-language reporters to a company in Leon, Mexico. Employees there will translate the articles into Spanish, add some stories of their own about futbol, telenovelas, and Latin American politics, and lay out the paper. The company will then e-mail the product back to the Times, which will print and distribute it as a free tabloid.

"We are responding to an increasing call from advertisers to provide a way to reach this audience, which is growing dramatically in the East Bay, particularly in east Contra Costa County," Times publisher John Armstrong said. "Over the last two or three years, we tried to figure out a way to do this profitably."

The Times is just the latest paper to jump onto the Fronteras bandwagon. Universal Press Syndicate, which markets Fronteras, has been picking up contracts in midsize American cities as far north as Columbus, Ohio. Small papers that want to reach the growing Latino market but can't afford to reproduce an entire newsroom now have a mix of wire copy and translation resources that provide a semblance of local news at a fraction of the cost. "It's very different from Nuevo Mundo," Armstrong says of his new paper. "That was a community newspaper. This is not."

The timing of the Fronteras launch and the death of Nuevo Mundo has more than one observer raising the specter of journalism being outsourced. Ivan Roman, executive director of the National Association of Hispanic Journalists, released a statement that read in part, "The Mercury News decided to close Nuevo Mundo so it could cut costs and replace it with a paper that is produced in another country. ... The consequences are enormous for the Latino community and for journalism. It is critical for local news operations to have a presence in the communities they serve so they better understand the informational needs of those they cover." And Edward Colby wrote on the Web site of the Columbia Journalism Review, "It defies reason to think that news from afar will engender the same trust among readers that Nuevo Mundo had, or the bond with the local community forged by Viet Mercury. ... And outsourcing newspaper production -- which can only undermine journalistic credibility and alienate the local community -- is not the answer."

But perhaps there is no answer at all. Shoemaking and the textile industry fled the United States decades ago, and computer programming and customer service are following in their wake. Creative industries such as advertising, architecture, design, and journalism always seemed safe because they require a grasp of cultural nuance. But now, even these industries may be on their way across borders.

"In architecture, there are more companies that are outsourcing drafting," noted John Challenger, CEO of the human-resources consulting firm Challenger, Gray & Christmas. "A lot more graphic work is being outsourced overseas, both IT graphic and other graphic work. A lot of the big advertising companies are global, so I don't know how the supply chain works for them, but inevitably, pieces of their work is being outsourced. ... Once the work is electronic, the borders disappear."

Everything that can be farmed out to the Third World eventually will be. Even industries that depend on cultural fluency will find a way to outsource as much labor as they can -- or face bankruptcy. Today, it's just the newspaper. Tomorrow, Pixar.

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