As newspaper readership stagnates in the US and Europe, India's newspapers are enjoying the kind of golden age the US saw at the end of the 19th century. These prospects are luring in international groups to India. Rupert Murdoch announced plans to launch The Wall Street Journal in India within a month of agreeing to acquire the paper.
That is unlikely to be his last venture in the subcontinent. There have been rumours all year that News Corporation is gearing up to launch a version of The Sun. Three other dailies, Mint, DNA and Mumbai Mirror, have all hit the news-stands in the past two years.
Timmy Kandhari, head of the entertainment and media practice at PricewaterhouseCoopers in Mumbai, says: "There's going to be 12 to 15 per cent annual growth in the market going forward, and I think our prediction is conservative."
His study earlier this year predicted that the print industry would almost double in size between 2006 and 2011, from $3.3bn (1.7bn) in 2006 to $6bn in 2011.
The Economist aims to triple its Indian readership from 18,000 to 50,000 by the end of 2009, investing $20m in a concerted marketing push starting next month.
Mr Kandhari says PwC has fielded several enquiries from magazine groups looking to acquire Indian titles. The attractions are obvious. "The demographics in terms of the potential are just off the scale," says an executive connected with the Mail Today launch. "There are lots of people who are going to be entering working age over the next decade and they're increasingly interested in news. Plus, there's a big retail boom and retailers want to advertise their products."
In the past six months alone, advertising rates in India have risen by 30 to 40 per cent.
But the only international newspaper to actually to publish in India is the International Herald Tribune, which began printing in collaboration with Hyderabad's Deccan Chronicle in 2004. Pearson made its first strategic acquisition in the market in the same year, when it bought a stake in Business Standard, a business paper. Independent News & Media took a different tack a year later, opting to invest in the faster-growing Indian-language media. It now has a 20.8 per cent stake in Jagran Prakashan, which publishes Dainik Jagran, India's leading Hindi-language newspaper.
The Wall Street Journal was heavily involved in the launch of Mint, a business paper promoted by India's Hindustan Times Group, although it has taken no equity in the project.
Raju Narisetti, Mint's editor, points out: "Last year, all of India's papers added 12 million new readers. That is equivalent to five Wall Street Journals. There are 360 million Indians who can read and write and don't read a paper. In a country where the government is making no initiatives to talk about population control, I see very healthy growth."
But, as is often the case in India, promising demographics do not mean guaranteed profits. For a start, there are still onerous regulatory barriers limiting international involvement in the Indian press. Magazines can be 100 per cent foreign owned, but foreign investment in news publications is limited to 26 per cent.
In 2004, Independent News & Media proposed to launch an edition of The Independent in India, in collaboration with Jagran Prakashan. However, Indian editions of international newspapers, with the exception of the International Herald Tribune, have not so far been permitted. In the days before its acquisition by Rupert Murdoch, The Wall Street Journal signed a joint venture with The Times of India's publishers, Bennett, Coleman & Co. But its Indian edition never launched.
The Economist gets around the restrictions by bringing in copies printed in Hong Kong and Singapore a practice that only makes sense for a magazine that retails at Rs200 (2.50), roughly 10 times the price of India's current affairs magazines.
Mint's Mr Narisetti says: "For Indian newspapers, the laws on direct foreign investment are really archaic, and it's unfortunate, because the industry in India take Bajaj scooters, Maruti cars, you name it they've all benefited from foreign competition."
India's newspaper industry is also fairly lively already. The Times of India has the highest circulation of any English-language newspaper in the world, but it doesn't even make the top five of 200 newspapers in its home market.
Ravi Dharimal, chief executive of Bennett, Coleman & Co, is sceptical about the prospects for international newspaper groups in the country. "I would be very surprised if they have a big role in the Indian media," he says. "I don't see how they can bring too much innovation. I see newspapers as primarily a local business."
A new entrant in the market is Mail Today, a collaboration between India's India Today group and Daily Mail, one of the most popular tabloids in England. Many in India's media establishment write off Mail Today as too lightweight. Paresh Nath, a magazine publisher and deputy president of the Indian Newspaper Society, says: "Things like this do not last very long, because the advertiser doesn't take kindly to a publication which is flipped through and thrown away. The advertiser wants a story to be serious so that the reader is stuck to it."
But this view may simply reflect the innate conservatism that could give international groups an edge. Mail Today believes it is doing something new. "There isn't a paper out there that caters to the middle-class woman," says the executive who helped with the paper's launch. "Look back to the 1970s that was the path that the [Daily] Mail took and it was very successful with it."
PwC's Mr Kandhari argues that Bennett, Coleman & Co's launch of the Mumbai Mirror shows that they see a threat from tabloids. "With the Mumbai Mirror, The Times of India has been trying to protect its flank," he says.
At the other end of the market, Mint has succeeded by offering readers a clearer, more balanced and certainly more accurate take on Indian business. Launching in February last year, it has now reached a circulation of some 120,000, making it the second most-read business paper in Mumbai and Delhi. But the paper's editor, Mr Narisetti, admits it could be three years before it breaks even. "Advertising has been slow there's no two ways about it," he says. "When you're a new paper it takes a while to convince advertisers. A new newspaper in India won't make money for two to three years, and that's the same with us as well."
He believes some of the newspapers and magazines launching today will not survive. "What we've seen in 2007 and maybe [will in] 2008 is probably the peak of this boom. I think in 2008-09 you'll see a fair amount of consolidation. People forget that in this business you burn money very quickly."
But even if the market falls short of PwC's bullish predictions and the latest figures from the Indian Readership Survey suggest a slowdown its prospects will still outshine other markets enough to hold the interest of the likes of Rupert Murdoch.
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