A few years ago, Mohanlal Parwani used to mount his black stallion each morning and ride along the hilly terrain of the Vindhya and Aravalli mountain ranges to Sawai Madhopur, a town in the northwestern region of Rajasthan. His mission: To deliver the Rajasthan Patrika, a top-selling Hindi newspaper, to the doorsteps of more than 150 households. In the course of his nine-hour workdays, he always found time to juggle an assortment of tasks — gossiping with the locals, running errands for many of them (for a fee) and scribbling notes about village affairs on a dusty pad to relay back to the paper’s editors. All the while, he was sure to put in a plug for his newspaper whenever he came across someone new in town.

That’s still the case today, except for one difference: Parwani’s horse, which was becoming too expensive to maintain, has been swapped for a moped — the utility vehicle of choice in rural India — provided by Rajasthan Patrika as a reward for his diligence. A delivery person like Parwani “doubles up as a journalist and garners new subscriptions for us,” says Arvind Kalia, marketing and brand communications head at the Jaipur-based Rajasthan Patrika publishing house, whose paper has a pan-Indian circulation of two million copies a day. “Parwani is one of our most resourceful employees.”

Rajasthan Patrika isn’t the only publishing house tapping the resourcefulness of rural India. In fact, at a time when newspapers are folding in other countries, India’s media scene is admirably buoyant, thanks to the country’s burgeoning rural, local-language newspapers. According to the New Delhi-based Indian Newspaper Society, India has 62,000 newspapers, with a staggering 90% of them in local languages. Indian news publishers are doing relatively well, precisely “because they’ve spread their wings to smaller towns,” says Divya Radhakrishnan, president of TME, the media division of Mumbai-based advertising agency Rediffusion-Y&R.

But with nearly 80% of local-language papers having a circulation of less than 10,000 copies — at a cover price of between 2 U.S. cents and 6 U.S. cents a copy — they are not without their strategic challenges. The economic hurdles they face are familiar to newspapers the world over, especially at a time when so many other types of media compete for their readers’ attention. But India’s papers also must address home-grown challenges, like the country’s relatively low literacy rate and poor infrastructure hampering delivery.

What Really Matters

Local papers are a hit with readers in India for various reasons.”Language publications in India are doing well because of their connection to local issues,” says Sridhar Samu, professor of marketing at the Indian School of Business (ISB) in Hyderabad. “First, they cover local news, which is more relevant for [these] consumers than national or international news; and second, they cover national and international news [insofar as it would concern] local people.” The upshot for publishers is “an impression that the language publications actually care for their readers by emphasizing what really matters for them.”

A typical, 24-page local edition will have the regular fare of national and regional news, in addition to eight to 12 district-specific pages with coverage of local events, spanning business and politics as well as social news and profiles of, say, village heroes and villains. There’s also a large dose of reader-generated content that goes beyond the industry’s ubiquitous personal ads. For example, in Eenadu — a paper published in the Telugu language — alongside tips on animal husbandry provided by a farmer in a weekly column, readers were invited during the state elections in April to write about their political opinions and grievances. The idea is “to make people feel like it’s their own paper … [that their] involvement matters,” says I. Venkat, director of the paper, which is the flagship publication of Ramoji Rao, a media magnate.

There are also grassroots papers written and published by and for locals. A prominent example is Khabar Lahariya, or News Waves, a weekly newspaper based in Chitrakoot, one of the poorest districts in central India. Written in Bundeli, the local language, the paper’s all-female staff has forged a reputation for investigative journalism and support of grassroots causes since the paper was founded in 2002 by Nirantar, a New Delhi-based literacy education non-profit.

With a readership of 35,000 in 400 villages and costing 4 U.S. cents, the paper has no glitzy promotion strategy like its urban counterparts. Khabar Lahariya’s marketing strength is instead its bold reporting on issues concerning lower-caste communities, for which it won the 2009 King Sejong Literacy Prize from UNESCO, among other recent accolades. However, the main reason why Khabar Lahariya receives such kudos is that it is run by trained women from marginalized communities and it conducts (in conjunction with Nirantar) journalist training and writing programs for locals — a vital step, many believe, in increasing rural literacy.

But Khabar Lahariya‘s roots make it an exception to the rule. Most other local newspapers are owned by large parent companies. Media experts note that major newspaper groups, whether urban or rural, are launched thanks to the deep pockets of politicians and their supporters, often businessmen with political ambitions. “Media barons have not only used papers as vehicles to support politicians, but to build their own power base,” according to one media director of a leading ad agency. Two years ago in Andhra Pradesh, the state’s now deceased chief minister YSR Reddy started Sakshi, a paper for the hinterland. It now claims a circulation of 1.2 million copies.

Whatever their origins, local papers often depend on the diversified revenue streams of their parent companies for survival. The media group that publishes Eenadu, for example, also makes films and has a sprawling studio in the south of the country, which it rents out to Hollywood and Bollywood producers. The media house that publishes Rajasthan Patrika sells outdoor advertising, mobile value-added services and a directory-listing service.

Weathering the Downturn

Like their urban counterparts, local papers also rely on advertising revenues rather than subscriptions and newsstand sales to stay afloat. Working in their favor are the rising disposable incomes of consumers in India’s villages — a phenomenon that certainly isn’t lost on consumer goods companies hoping to increase the appeal of their products or services through ads adapted to local languages and cultures.

In fact, these locally focused ads have helped rural newspapers weather the global economic downturn. According to the Audit Bureau of Circulation, a voluntary organization of publishers, advertisers and ad agencies, while circulation for most publications has remained static, ad revenues have taken a beating. Over the past year, publications in India reported a 15% to 30% drop in advertising revenues, and while 60 new magazines — largely Indian editions of foreign glossies — were launched during that time, no new newspaper hit the stands. Even today, belts are being tightened. For example, hard-hit English-language dailies such as The Times of India and Hindustan Times discontinued their highly discounted subscription deals, reduced pages and downsized their staffs.

Amid the gloom, local papers have provided a ray of hope. “Our local editions played a key role in minimizing the effects of the downturn,” Venkat of Eenadu notes. Like other newspaper executives, he claims that while Eenadu‘s circulation has remained steady throughout the downturn, ad revenue has been under pressure. Costing around 6 U.S. cents, the Hyderabad-based publication — in business for more than three decades — has more than 20 district editions in Andhra Pradesh as well asin neighboring Bangalore and Chennai. Eenadu also has three separate editions in the densely populated cities of Hyderabad, Vijaywada and Tirupati. The paper, which refers to itself as “the heart and soul” of the state, has a total circulation of 1.4 million copies, with 66% sold in rural areas.

But as marketing budgets continue to be squeezed, advertisers are scrutinizing their spending in local language papers more closely than ever while hunting for more ways to reach consumers. Unlike in other parts of the world, however, the battle for advertisers’ budgets is not as intense between offline, print publishers and their online rivals. Internet adoption in India is still relatively low. In a country with a population of 1.2 billion and growing, there are only 55.5 million Internet users. Meanwhile, there are 376 million mobile subscribers — yet only 15% to 20% of all handsets are Internet-enabled.

Instead, television is posing the biggest threat to local language papers. In India, 125 million households own a television, and 80 million of that total have cable or satellite service. According to TAM, Nielsen’s television viewership rating arm, rural penetration of television is 65 million homes — or over 50%. Until 1990, television in India included only the state-owned channel Doordarshan. However, subsequent liberalization and reforms opened up the staid media market, and nearly 400 channels now beam TV programs into homes, including India-specific, regional channels launched by foreign media heavyweights like Rupert Murdoch, Turner Broadcasting and Viacom. In the last two years, in fact, Rupert Murdoch’s Star has acquired or launched over a dozen regional channels in Bengali, Tamil, Malayalam, Marathi and a range of other languages.

According to Arun Tyagi, vice-president of media at Mumbai-based Reliance ADA Group, television is giving newspapers a run for their money in rural areas. “It’s not print that clicks in rural areas,” he says. Reliance ADA, which has interests ranging from power and entertainment to telecom and capital markets, is one of the biggest buyers of rural media. “We just don’t consider print when we want to promote products outside big cities and towns.”

That makes it even more urgent for the local papers to reduce their dependency on advertisers by extending their brand portfolios in a much different way than their urban counterparts. One way, Samu and others point out, is to build a “brand community” around a publication. Brand communities have been an important part of the marketing strategy at Marathi daily Lokmat, which was founded by Bal Gangadhar Tilak, a freedom fighter who rebelled against colonial British rule nearly a century ago. “The urban-rural divide is not distinguished by markets but by lifestyle,” says Jwalant Swaroop, director of advertising and business development at Lokmat, which is based in Nagur,in the western state of Maharashtra. For that reason, the paperhas spent the past 10 years growing its community platform — a club aimed at three different segments: women, youth and children. For an annual fee of US$4, the paper’s 500,000 “members” are entitled to free medical checkups, passes for cultural programs and invitations to product-sampling events run by consumer goods companies. Swaroop says these communities help Lokmat to retain current readers and capture new ones.  

Not-so-hot off the Press

While advertising is one ongoing challenge, distribution is another — especially given the poor state of infrastructure in rural regions. Typically, publications in India hire distributors in urban areas to deliver newspapers to homes by 7:00 a.m. or earlier. Agents and sub-agents like Patrika‘s Parwani are recruited for smaller towns and villages. Until a few years ago, rural areas received what publishing houses referred to as a dak or mofussil edition. Each day, these editions needed to be published earlier than the others to accommodate the long hours necessary to transport them to their readers.

But with the increasing presence of television and rising print competition, newspapers have more recently begun moving closer to their customers. One example is the Dainik Bhaskar group in Bhopal, in the central state of Madhya Pradesh. Its brand stable includes 42 editions of Dainik Bhaskar (one ofthe most-read Hindi news dailies), Business Bhaskar and Gujarati daily Divya Bhaskar. It also has Daily News & Analysis, an English paper published under a joint venture with local partner Zee. The group’s language papers are now printed in 40 locations, compared with 13 a few years ago. The strategy has helped shrink average delivery times from seven hours to four hours, and papers are now supplied within a 200-kilometer radius of where they are printed, instead of the previous 350 kilometers.

“The dak edition is no longer an inferior paper,” says Girish Agarwal, director of the Bhaskar group. The group’s flagship paper now has offices in every district in Madhya Pradesh and Rajasthan, with a fleet of reporters. The expansion has clearly had a positive impact on circulation: 35% of its total circulation of five million is sold outside of the major cities. The group wants to expand further and is finalizing plans for a public offering on the stock market.

But the biggest challenge confronting local papers — illiteracy — still looms large. According to government statistics, the national literacy rate is around 60%; the rural average is 50%. While some argue that local publications increase literacy in the local language, others disagree. “Editions in local languages don’t mean the papers are touching rural households,” says Ravi Kiran, the Mumbai-based CEO (South Asia) and emerging market leader for specialist solutions at Starcom MediaVest, a media conglomerate in Chicago. “It’s not just about reaching the hinterland. What are newspapers doing to encourage reading habits? Growth [of these publications] will be challenged.”