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Newspaper war breaks out in Mumbai as India's print market grows

Mumbai (AFP) - Dozens of teenagers dressed in blue Hindustan Times T-shirts are the latest soldiers in a media war stirring on the streets of India's financial and entertainment capital.

The youngsters, who stop Mumbai citizens to ascertain what they would like to read every day, are preparing for the New Delhi-based paper's launch in Mumbai later in the summer.

They are in battle with the Daily News and Analysis, or DNA, which will also hit the newsstands in September and has put up more than 150 billboards in the city as well as fielding its own team of bright young market researchers.

Both newspapers are hoping to break the local domination by leading English-language daily Times of India and capture a growing pool of advertisers and readers in the city of almost 20 million people.

In an early counter-attack, the Times of India's parent company Bennett Coleman Monday launched The Mumbai Mirror, an English-language daily tabloid, to deflect the new competition.

The Mirror's inaugural 48-page edition carried a typical range of newspaper features including city, state, international, sports pages and 12 pages of classifieds. The lead story was of Bollywood legend Amitabh Bachchan's fallout with elder brother Ajitabh over financial issues, in a story titled "Brothers set for hatchet job".

A media scrap is intensifying nationwide because India's newspaper market is defying an international trend - it's growing - and advertisers are eager to tap a booming consumer market. Mumbai, formerly Bombay, is at the centre of the war.

Even as print media in the rest of the world goes through a rough patch, with US print readership down eight percent in 2004, the Indian market is growing steadily and is expected to cross 20 percent of the one-billion-plus population in the next three years.

Official data shows that total number of newspaper copies sold, including English language, crossed 142 million last year, compared to around 55 million in the United States.

Priced around 2 rupees or 5 US cents an issue, newspapers are also the main source of news in India followed by television with Internet lagging behind because of low penetration and high cost.

India has around 10 computers for every 1,000 people against 500 in the US and 200 in China. Sales of computers in China are around 13 million units annually, compared to three million in India.

"A low computer penetration in the country is helping the print media as Internet access and online news reading is still in the infant stage," says Prateesh Krishnan, technology analyst at SBI Capital Markets.

Advertising revenues on the rise

A strong advertising market is the other key driver for the new entrants as print advertising rose 14 percent to 55 billion rupees (1.3 billion dollars) in 2004, of which over 10 billion rupees was spent in Mumbai alone, the bulk grabbed by the Times of India.

The only competition for the Times of India in Mumbai is an afternoon tabloid called Mid-Day with a circulation around one third of its morning rival's 560,000 copies a day.

"The advertiser in Mumbai has been exploited with high prices by the Times, while advertisement in other publications gets a low response. So a second paper is essential for everyone's benefit," says Kumar Ketkar, veteran analyst and editor of the leading local Marathi-language regional daily, Loksatta (People Power).

"So there is a market, there are advertisers ready to explore new avenues and there are readers." DNA, the brainchild of former Times of India marketing chief Pradeep Guha, is aimed at dethroning his old employer.

"It is for the first time that Times of India is facing the heat," DNA marketing director Suresh Balakrishnan tells AFP.

"The size and scale of DNA has scared the Times and it is already reacting by rapidly changing its content," he claims. Industry sources claim DNA, a 50:50 joint venture between television group Zee and the Bhaskar group, is armed with a war chest of six billion rupees (140 million dollars), including a pre-launch advertising budget of 600 million rupees.

The Hindustan Times, which is in a battle with the Times of India for the largest circulation newspaper in New Delhi, has roped in foreign investment under Indian laws that allow 26 percent of a media company to be held offshore.

It plans to raise more money for its Mumbai new edition through an initial share sale.

The new newspapers have also sparked a bidding war for journalists with salaries up as much as 30 percent in the past year.

Analysts say Mumbai is ideally placed for such a media outbreak as it is the only Indian city that lacks a "second newspaper culture" despite its growing readership and it has a growing number of English readers as immigrants flock to the city for work.

"Imagine ... the country's most vibrant city has no second newspaper in the true sense. No other city of such a scale and magnitude in the world has its public opinion controlled largely by one daily," says analyst Ketkar.

"We want to quickly take up the number two slot in the city as the gap is awesome," says Balakrishnan of DNA.

He says a total of 750,000 copies of English dailies are sold in Mumbai, while in New Delhi 1.4 million copies are sold to a population of 15 million.

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