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NEW DELHI -- At a shopping-mall McDonald's here in India's capital, Isha
Gupta, a 22-year-old MBA student, ignores a blaring television and flips through
a newspaper, while munching a burger. "TV news doesn't cover critical
discussions," says Ms. Gupta. "If I'm online, I'd rather chat with friends than
read the news."
In a nearby caf¨¦, Sandeep Singh is engrossed in the Times of India, the
country's biggest and oldest daily. Once staid and stodgy, the Times has
recently sprouted an array of glossy supplements and magazines to lure younger
readers. Mr. Singh, 22, finds the revamped paper "more user friendly now and
much more attractive."
Propelled by a new generation of young consumers, widening literacy and a
spurting economy, India's print media are booming, even as newspapers and
magazines in most developed countries struggle to maintain profits and compete
with the Internet and television.
Indians have always been avid newspaper readers. The almost 300 dailies
published here generally cost less than five rupees (11 cents) a copy. But the
last few years have seen fast readership growth and unprecedented competition
between established titles and upstarts eager to get in on the action.
Newspaper and magazine readership in 2005 hit 200 million across the country,
an increase of 12% over 2003. Analysts expect the trend to continue for the next
few years, as more young Indians join the ranks of readers. Almost a quarter of
the 730 million Indians over the age of 15 read a newspaper last year, up from
21% in 1999.
Half of those readers live in rural India, where rising literacy rates and
incomes are spurring more publications in India's vernacular languages, such as
Hindi and Gujarati. The number of destitute households has declined in the past
decade by nearly 20 million, according to government estimates. Literacy is
growing by a percentage point or two each year. But with a national literacy
rate of just 65% there are still millions of untapped potential rural readers.
The circulation of Dainik Jagran, India's biggest vernacular newspaper, has
doubled to 2.4 million since 2001. The number of towns and cities in which it
prints has more than doubled to 28 in the past five years. "There's an
incredible, insatiable demand," says Gavin O'Reilly, chief executive of
Independent News & Media PLC, of Dublin, which last year paid $32.2 million
for a 26% stake in the newspaper's publisher, Jagran Prakashan Ltd.
India has bucked the global newspaper trend, mainly because print's biggest
electronic rival -- cable TV -- hasn't yet attracted the critical mass of
customers needed to siphon off print's ad revenue. "The television audience is
extremely fragmented and its attention spans are short," says Vishal Marwaha, a
partner with Henderson Global Investors Asia Pacific Fund, which in 2003 bought
15% of Hindustan Times Media for $26 million.
Even so, the advent of cable TV in cities has spurred newspapers to broaden
their appeal with more color printing, a more-lively approach to news coverage
and more consumer-oriented supplements, says AC Nielsen India's N. D. Badrinath.
Growth of print ad revenue has been outpacing that of television. Print ad
revenue has grown by an annual 12% to 14% in the past few years, says Deepak
Kapoor, an executive director at PriceWaterhouseCoopers, New Delhi. He expects
continued strong growth, as companies expand ad budgets in India's buoyant
economy.
Online publications aren't yet a potent factor, either. Only about four
million Indians subscribe to an Internet service. The Internet Service Providers
Association of India says subscription growth has slowed to a trickle in the
past few years due to overregulation and a lack of investment.
Print publications, meanwhile, are hustling to lock in a generation of new
readers. Newspapers are betting that India's vibrant economy is enriching the
young and making them appealing to advertisers. Half of India's 1.1 billion
citizens are under the age of 25. Its median age of 24 compares with 32 in China
and nearly 37 in the U.S.
In India's cities, which still generate the bulk of print ad revenue, the
battle for new readers is fierce. In the commercial capital of Mumbai, the
venerable Times of India is battling two rivals that have encroached on its turf
in the past year. One, the Hindustan Times, is planning to launch a business
newspaper soon. The other, a brash startup called Daily News & Analysis, or
"DNA," has plans to expand nationally.
Mumbai, explains DNA director Girish Agarwaal, has a population nearly as
large as New Delhi's, but fewer than half the capital's 1.7 million newspaper
readers. "For these people it's a relief just to have an option," says Mr.
Agarwaal. "The idea is not to give them something their grandfather would have
read."