Blackstone Buys Stake in Hindi-Language Paper as N.Y. Times Bets on Ipad
Blackstone Group LP, the largest private-equity firm, is investing in a Hindi-language newspaper to benefit from a surge in readership in India as print advertisement sales in the U.S. fall to a 26-year low.
Blackstone Group plans to invest 2.25 billion rupees ($50 million) in Jagran Media Network Pvt., according to a joint statement yesterday. A unit of Jagran Media prints Dainik Jagran, which claims to be the world’s most widely read newspaper with a readership of 54.6 million.
“India is 10 to 12 years behind China and about 20 years behind the U.S. in terms of growth, so at this stage we observe very different behavior in terms of the cycle of readership in Asia as compared with the West,” Akhil Gupta, Blackstone’s India chairman said in a phone interview yesterday. “India, and probably China, are the only countries where readership of newspapers is growing. We are moving from the have-nots to the haves.”
The growth of vernacular newspapers in India is in stark contrast to the industry’s troubles in the U.S. where publishers have cut jobs and sections, and sold assets to cope with declining advertising revenue. Papers such as the New York Times are betting on attracting readers on digital platforms such as Apple Inc.’s iPad tablet computer.
New York Times Co., which also publishes The Boston Globe and the International Herald Tribune, offers a free application for its flagship newspaper on the iPad. Chairman Arthur Sulzberger said in March the company may later switch to charging readers on Apple’s tablet computing device, which went on sale in the U.S. on April 3.
Last year, print ad sales in the U.S. plunged to their lowest since 1984 and digital advertising fell 12 percent, data from the Newspaper Association of America shows.
Dainik Jagran prints 37 editions and more than 200 sub- editions across 11 Indian states, according to the joint statement by Blackstone and Jagran Media.
India, the world’s fastest-growing major economy after China, may expand 8.2 percent in the 12 months from April 1, from an estimated 7.2 percent this year, India’s finance ministry forecast in February. Domestic consumption is driving India’s economic recovery, Hewitt Associates Inc., a Lincolnshire, Illinois-based human resources adviser, said last month.
People who have never read newspapers in India are now picking up the habit as literacy rates improve, Gupta said. The Indian newspaper and television industries may grow at between 15 percent and 17 percent annually over the next 10 years, he said.
Independent News & Media Plc, the publisher of the U.K.’s Independent newspaper, paid 28.5 million euros ($38 million) for a 20.8 percent stake in Jagran Media unit Jagran Prakashan Ltd. in 2005. Independent News has been reducing its stake in the Indian publisher since last year to pay off debt. The Dublin- based company is selling assets to raise cash after cutting its operating profit forecast amid a decline in advertising revenue and sales.
Printed newspapers will probably survive as long as a decade before being largely replaced by digital news, James Tyree, who led the October buyout of the Chicago Sun-Times’ publisher, said on April 6.
“My godson doesn’t have a newspaper subscription in the U.S.” Gupta said. “He goes on the net to view the Wall Street Journal and the New York Times. We will start to see those trends 5 to 10 years from now in India.”
To contact the reporter on this story: Pooja Thakur in Mumbai at firstname.lastname@example.org