Jul 31, 2008

Business - Not all bad news

Newspapers are thriving in many developing countries
IT MAY not be much consolation to the hard-pressed hacks of the rich world, but in many developing countries the newspaper business is booming. According to figures released in June by the World Association of Newspapers (WAN), an industry body based in Paris, newspaper sales in Brazil increased by some 12% last year. Over the past five years, circulation has gone up by more than 22%. In India, sales rose by 11%, bringing the five-year increase to more than 35%. Pakistan’s newspaper market grew by almost as much in the same period. The trend is similar elsewhere in Asia and Latin America.
The demand for news tends to go up as people enter the workforce, earn more money, invest it and so begin to feel that they have more of a stake in their society. Literacy rates also rise in tandem with wealth. For the newly literate, flipping through a newspaper in public is a potent and satisfying symbol of achievement.

Literacy campaigns by the government and NGOs account for much of the increase in sales of Indian newspapers, according to Ashok Dasgupta of the Hindu, a big Indian daily based in Chennai. Hiring is brisk, he says, and new papers and magazines are “cropping up every day”. Most are small, but the number of big, high-quality national business dailies has risen from four in 2006 to six today. A seventh will appear later this year.
Publishers in India benefit from a long tradition of press freedom. But papers in countries with more meddling governments are also, by and large, doing well. This is especially true of small newspapers. Governments with limited resources are often ill-equipped to monitor a profusion of local and regional newspapers. In Mali, for example, newspapers are popping up “like mushrooms”, says Souleymane Kanté, the local manager for World Education, an American NGO that aims to eradicate illiteracy. The Malian government keeps large national publications in line, Mr Kanté says, but local and regional papers have some breathing room.
China’s vast oversight apparatus keeps tabs on big and small outlets alike. But newspapers are thriving there, too. In the past five years sales have increased by more than 20% to 107m copies a day. (By comparison, daily sales in America amount to some 50m.) China’s growing wealth helps to explain this. So does a high level of literacy, thanks in part to the Communist Party’s investment in education.
Shaun Rein, of the China Market Research Group in Shanghai, says there are also other factors at work. Because all Chinese newspapers are state-owned, they will probably remain cheap even as costs increase and advertisers move online. And Beijing’s struggle to limit corruption may also play a part. Some officials see local publications as allies in the effort to unmask crooked regional and municipal authorities, and so favour lengthening reporters’ leashes. Others seem to disapprove, leading to rumours of a debate within the upper echelons of the party—unreported by Chinese media, of course.
Newspapers are doing well in middle-income countries, too, according to WAN. In Argentina, for example, newspaper circulation jumped more than 7% last year. Manuel Mora y Araujo, of IPSOS, a consultancy, says media groups from America and other rich countries have not been investing in Argentine news organisations, possibly because their own problems mean that they cannot afford to. Nonetheless, he says, “The press isn’t worried—there’s tons of advertising.”

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