Filed under: Products and services, World wide web, Time Warner (TWX), CBS Corp ‘B’ (CBS), Media World
With everything from call centers to web site design being outsourced, the clear trend in the business world is to outsource almost any task that can be done cheaper and quicker somewhere else. Reports that CBS (NYSE: CBS) and cable news pioneer CNN, owned by Time Warner (NYSE: TWX) are in talks about outsourcing the news, should come as no surprise.
According to a story in The New York Times, “Broadly speaking, the executives described conversations about reducing CBS’s news-gathering capacity while keeping its frontline personalities, like Katie Couric, the CBS Evening News anchor, and paying a fee to CNN to purchase the cable network’s news feeds. “
With CBS stuck in third place among major networks for years, and general viewership of the evening news falling due to substitute news outlets such as cable news, blogs and world wide web sites, this tie-up would make economic sense. CBS would be able to keep its brand name and substantially cut costs, as they would be able to take CNN news feeds from around the country.
While this deal is far from being consummated and all kinds of hurdles remain, this would be a perfect case of the benefits of outsourcing.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer’s fund has no position in any stock mentioned, as of 4/8/08.
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