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Newspapers on Upswing in Developing Markets

While gloom haunts the newspaper industry in the United States and Europe, the business is flourishing in much of the developing world.

New newspapers — some backed by governments, others by business moguls and international conglomerates — are springing up from Rwanda to Tajikistan, attracting readers and advertising money.

In many of these markets, rising literacy rates dovetail with growing disposable income to create millions of potential readers. Circulation is rising by double-digit percentages at existing papers, while some Western media companies are forging partnerships and trying their hand at start-up companies as well.

Executives in India, one of the fastest growing newspaper markets, say reading a newspaper is something to aspire to instead of a throwback to a bygone era as it is perceived in much of the West.

“Anyone who can read or write is still looked at with a bit of awe” in many markets in India, said Rajesh Kalra, a veteran journalist who is now chief editor of Times Internet, the Internet arm of the Times Group, which publishes The Times of India. The paper has a circulation of 3.5 million, more than 10 percent higher than a year ago, and says it is the biggest English-language paper in the world. Times Group, a part of Bennett, Coleman and Company, is introducing editions of the paper in three Indian cities this spring.

When people first learn how to read, they want to let people know, Mr. Kalra said, and “the first thing you want to do is be seen to be reading a newspaper.”

The literacy rate in India hovers at about 61 percent, according to Unesco, but the number of literate youths (ages 15 to 24) is above 76 percent, signaling that education is improving. The number of daily newspapers grew to 287 in 2006 from 185 in 2005, according to the World Association of Newspapers.

Global newspaper advertising spending will increase to $130 billion in 2010 from $125 billion in 2007, according to ZenithOptimedia, partly as a result of growth in India and other emerging markets. That trend is reversed in North America, where newspaper advertising revenue in the United States fell 7.9 percent in 2007, according to the Newspaper Association of America.

A jump in income in many emerging markets often corresponds with an increased desire for business news, as consumers become investors in local or international markets. Meanwhile, an increasingly global financial system means that experienced investors are active in once far-away corners.

“We do see a big potential in emerging markets,” said John Ridding, chief executive of The Financial Times, which is based in London. “There is strong and growing demand from these markets for strong industry and business analysis.”

In April, The Financial Times, a unit of Pearson, started a Middle East edition from Abu Dhabi with expanded local coverage, and Mr. Ridding hopes it will increase the paper’s circulation “substantially” from the several thousand readers it currently has in the area.

In India, The Financial Times sees “big opportunities for expansion” and is working on an “exciting project,” about which he would not elaborate.

In China, The Financial Times is about to start a monthly Chinese language magazine called RUI, which in Mandarin Chinese means “intelligence.” The magazine, aimed at the upper-middle-class Chinese consumer, will carry a mix of lifestyle and money management articles.

While spending on Internet advertising is rapidly increasing in the United States and Western Europe, the faster-growing markets of Asia and Latin America are all about old media, said Martin Sorrell, chief executive of the advertising company WPP Group, in February. But it is still unclear whether foreign newspaper companies will be able to make up revenue they have lost in the West in these new markets.

Media companies in emerging markets, though, are enjoying growth their Western counterparts can only envy. “Unlike the developed markets, India is at a fundamentally different stage of its life” when it comes to media consumption, said Haresh Chawla, group chief executive of Network 18, a media conglomerate. The company also has a joint venture with CNBC, as well as with Viacom, which brings MTV and Nickelodeon to Indian audiences.

“There is a huge synergy in news gathering,” and owning a newspaper will round out Network 18’s media offerings, Mr. Chawla said.

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