As Circ Falls in U.S., Newspapers Dominate in India

By: Obituaries for newspapers are already being written in the United States and much of Europe, with the rise of the Internet and the shrinking of attention spans listed as the causes of death.

But the news hasn't made it to India.

Here, more than 150 million people read a newspaper every day ? compared to 97 million Americans and 48 million Germans ? circulation numbers are soaring, and advertising is expected to grow by 15 percent this year.

The crowded Indian newsstand is a cacophony of scripts: In New Delhi, papers are published in 15 languages, ranging from English and Hindi to more regional tongues, such as southern India's Telugu language.

One popular New Delhi newspaper shop offers 117 Indian dailies laid out like an all-you-can-read buffet with Bollywood stars, obscure acronyms, market data and cricket scores jostling for space in every paper.

Swaggering newspaper companies are betting that there's still more room to grow ? especially in rural areas, where readership remains low ? and are launching new papers and new editions across this country of 1.1 billion people.

The optimism is in large part due to India's rapidly growing economy, expected to increase by 8 percent this year, and the rising incomes and education levels that go with it.

The newspapers are also flourishing because India's media landscape remains firmly rooted in the ink-stained 20th century, before the Internet took hold or cable TV found its footing.

Despite a booming technology industry that's helped fuel economic growth, only 8.5 million of Indians use the Web, according to government figures. And even some who use computers don't see the Internet usurping print.

"The feel of reading a newspaper is very different," said Hemant Suri, a human resources consultant in New Delhi, as he browsed a newspaper rack. "The Internet cannot substitute."

And while cable TV is growing quickly, it's still prohibitively expensive for most Indian families ? especially next to newspapers, which at just a few rupees, cost less than a cup of tea.

Private radio stations are barred by law from broadcasting news, leaving newspapers as the preferred medium, both for the public and for advertisers, say media experts.

Last year, Raju Narisetti left the Wall Street Journal, where he was editor of the Europe edition, to launch a new business paper in India published by a leading company, Hindustan Times Media Ltd. Narisetti said the differences in business climates have been staggering.

In Europe, it was a good month when circulation and advertising numbers didn't fall, he said.

"Here, I've sat in meetings where the CEO pounds his fist on the table when the advertising guy says that it's going to be a 30 percent increase in advertising," said Narisetti. "It's a big shift in mind-set to realize that it's a market where 30 percent growth is considered just average."

HT Media says its revenues are up 28 percent so far this fiscal year, which runs from April to March, and earnings per share are up more than 200 percent. While most Indian newspapers are privately owned, analysts agree that other newspaper companies are seeing similar profits.

In comparison, 2006 saw the first decline in American newspaper revenue in a non-recession year, according to Morgan Stanley, whose analysts predict 2007 will be just as difficult.

The Indian press currently reaches about 35 percent of the country's adults, reports the World Association of Newspapers. In the U.S., 17 percent of people buy a daily newspaper, although most newspapers are shared with at least one person, according to the Newspaper Association of America.

Circulation of U.S. papers has dropped steadily over the past two decades from 63 million in 1985 to 53 million in 2005, according to the Newspaper Association of America. Readership is a higher number because it measures the number of people who read newspapers.

In Britain, circulation has fallen 3 percent between 2001 and 2005, while in Germany, it has fallen 11 percent over the same period, according to the World Association of Newspapers.

In India, however, circulation has risen 33 percent from 2001 to 2005, according to India's Registrar of Newspapers.

And the potential is huge. In a country where the adult literacy rate is 61 percent, there are still some 300 million literate people who aren't reading newspapers ? yet. Observers expect both the literacy rate and the number of newspaper readers to rise in coming years.

The Indian press is vibrant and opinionated, if not always fully reliable. Staples include lurid crime reports and stories of miracles in far-off villages, while the "Page 3" gossip sections, celebrated institutions at several papers, trumpet the latest starlet sightings.

One thing they all have in common: they're cheap. Priced at an average of about 2 rupees (5 U.S. cents, 4 euro cents), just about everyone can afford to read them.

"You end up spending more on a candy than a newspaper in India," said Anurag Batra, CEO of the marketing firm Exchange4Media.

The low prices also mean it's common for people to read up to four or five newspapers a day.

Suri, a New Delhi resident, reads four newspapers every day ? and he's the slacker in the family. His grandfather used to read 12.

"I read them just to get a flavor of what's happening across the country," he said. "There's a sheer joy of reading a newspaper."

Much of the industry's growth has been in English newspapers, which have become status symbols akin to washing machines, foreign cars, and brand-name purses for the legions eager to join the ranks of the urban, new India.

"A family might want to buy an English paper because they want to show that they are upmarket and their lifestyle has improved," said Bhupesh Trivedi, who runs the Indian Business Observer Web sites.

Roughly 11 million English newspapers are sold every day, while nearly 34 million Hindi papers are sold, according to India's Registrar of Newspapers.

India's growing affluence is also reflected in the business media, where at least five daily national business papers compete to feed a new hunger for financial news.

Despite the boom-time fever surrounding the print business, few believe that Indian newspapers can continue to grow forever.

"I have no doubt that the Indian media market will end up mimicking the West in terms of newspapers ending up not growing at all and the Internet becoming big," said Narisetti. "But I think it's 10 or 15 years away."

American or European newspaper executives wanting to lift their spirits might want to chat with Nita Puri and her clients at her stand of 117 newspapers.

"My morning coffee doesn't taste good if I don't have a newspaper to read," she said.


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