The last bastion of a profitable press

India’s print media story continues to be a happy one as newspapers round the world seem to be facing imminent extinction following an exodus to internet

round the world, newspapers seem to be facing imminent extinction, as a mass exodus to the internet causes their circulation to slump and their advertising revenue to collapse. But not in India. In the West, young people have largely dispensed with the home-delivered physical morning newspaper, and instead catch up on the news whenever they choose, using tablets, laptops, or mobile phones. As advertising revenue has been vacuumed up by the internet giants Facebook and Google, newspaper profits have plunged. The industry has faced many bankruptcies in recent years, with those still operating often having laid off large numbers of staff, especially in their foreign bureaus. In the United States, the number of full-time journalists has dropped by 20 per cent since 2001.

Even several grand titles have either closed down or publish only online. Cyberspace is, after all, where the eyeballs are. Yet, while some well-known newspapers — such as the New York Times, the Washington Post, and the United Kingdom-based Guardian — have developed a robust internet presence themselves, it is not enough.

In the Guardian’s case, the site receives an impressive 38 million unique visitors per day, compared to a print circulation of just 200,000 copies. But those online visitors read for free, leaving the Guardian haemorrhaging money. It doesn’t help that web advertising revenues — which, for most newspapers, account for only 10-15 per cent of total revenues — can’t compete with the print-ad revenues of the past.

All of this has generated a distinct sense of uncertainty at journalism schools. Last year, for the third year in a row, the CareerCast survey identified “newspaper reporter” as the worst career a young person could pursue in the US.

Yet, in India, the printed word on pulped trees remains an amazingly healthy industry. India now has the world’s largest number of paid newspapers, and the number continues to grow, from 5,767 in 2013 to 7,871 in 2015. Over those same two years, 50 newspapers ceased publication in the US, which has less than a quarter of India’s print papers.

The robustness of India’s print-newspaper industry cannot be attributed to lack of growth in internet access: in the last decade, the share of the population with internet access rose from less than 10 per cent to some 30 per cent. So what does explain India’s thriving newspaper market?

One basic factor is India’s rising literacy rate, which has climbed to 79 per cent, owing largely to improvement in the “cow belt” of the northern states — the Hindi-speaking heartland. In the 1960s, when Hindi speakers were overwhelmingly less literate than those who read in English, Malayalam, and Bengali, Hindi newspapers had low circulations. Today, they are on top: for the second decade in a row, Hindi newspapers experienced the fastest growth, with average circulation soaring at a compounded annual growth rate of 8.78 per cent since 2006.

Economic development has also helped India’s newspaper industry. Many newly affluent Indians get their national and international news from television. But events close to home are best covered in the local dailies.

And, indeed, newspapers remain the best way to reach this segment of Indian society. To be sure, most leading news outlets in India have been developing their digital offerings. They have created mobile apps to download the news from their sites, and they increasingly treat their readers to short takes of digestible news briefs tailored to the small screens of hand-held devices.

But for many serious readers, such options are no substitute for the look and feel of a printed newspaper article. Printed newspapers offer the added advantage of reliability, in a country where internet access cannot be guaranteed all the time.

Given all of this, it may not be quite so surprising that advertisers in India have remained loyal to the appeal of newspaper ink over the flickering cursor. In sharp contrast to the western experience, advertising remains the Indian newspaper industry’s main source of revenue.

Of course, this trend may not last forever. But for now, India’s newspapers are in no danger of becoming financially unviable. While growth in digital advertising expenditure is surging, at an annual rate of nearly 30 per cent, it still comprises just 8 per cent of India’s total ad spending.

The differential, ABC predicts, will level out by 2021, with advertising revenues for print and digital media reaching parity. But even then, India’s print media will enjoy a healthy stream of advertising revenue that their western counterparts can only dream about. So India’s print media story continues to be a happy one. And a robustly growing India will remain paradise for newspaper mavens for a while yet. There are still 280 million people yet to become literate. And when they get there, they will want their own newspapers, too.

Shashi Tharoor, a former UN under-secretarygeneral and former Indian Minister of State for External Affairs and Minister of State for Human Resource Development, is currently Chairman of the Parliamentary Standing Committee on External Affairs and an MP for the Indian National Congress.