Indian newspapers: about to take off or crash?

The state of Indian newspapers and its future is the flavour of the season. The launch of a new newspaper, the addition of an edition or a dozen, the creation of new supplements,… all  seem to produce oodles of purple prose, in Indian as well as western publications.

Unlike in the United States and more recently in the UK, circulation is growing (or said to be growing) in India. And if the proof of the pudding is in the stock market, it shows: Deccan Chronicle‘s stock has surged 81 per cent from its issue price of Rs 165, Hindustan Times‘ has rallied 66 per cent from Rs 430, and Dainik Jagran is up 56 per cent from Rs 325.

But what is the truth? Is Indian media really so hot? Or is it a bubble about to burst?

The obvious pro view comes from those in whose interest it is to paint a rosy picture: investment bankers.

“The growth prospects of India’s newspaper publishing industry are phenomenal, especially when one considers the rising trend in disposable incomes and the direct bearing that will have on readership,” says Naresh Kumar Garg, who manages $49 million, including shares of Jagran Prakashan, at Sahara Asset Management Co. in Mumbai. “Higher disposable incomes mean more advertising.”

A Bloomberg story says Deccan Chronicle‘s advertising rates will rise 30 percent in May. Earnings in the last three months of 2006 rose 52 per cent. Profit at both HT Media, and Jagran, the largest producer of regional-language newspapers, more than doubled.

The contrarian view comes from Round 1 of the results of the 2007 Indian Readership Survey (IRS), which show readership declining for the first time in a decade.

The survey, coming just months after a National Readership Survey showed a six million jump in readership from 216 million to 222 million, shows a fall in readership of most English newspapers, vernacular language dailies and magazines.

The 2nd round of NRS results later this year will prove whether the fall in readership is an aberration or a trend. But is the IRS finding the first sign of the Indian media bubble burst, asks Anupam Mukerji?

The survey doesn’t provide any answers why the decline has come. But, it’s possible that TV news could be one of the reasons behind the drop in newspaper reading.

“TV news in India has exploded in the last few years. If I count on my fingers, there are 4 national English news channels, 4 national business news channels, at least 6 national Hindi news channels, and innumerable news channels in vernacular languages providing 24-hr news to Indian viewers. Other than instant news, they provide entertainment, gossip and much more.

“Importantly, they have stolen a march over print media in investigative journalism with a slew of so-called sting operations exposing corruption among the high and mighty. Despite the 400 million TV viewers in India, even the TV news industry looks ripe for a shakeout.”

So, what’s the truth? As usual, somewhere between the gung-ho view and the gone-with-the-wind view.

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