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It took 64 years for the revered Indian newspaper NaiDunia to reach a circulation of 500,000 – a figure that would make most North American publishers swoon.

That was two years ago. Since then, the paper's circulation has soared a stunning 62.5 per cent to 800,000 copies a day, and the publication's owner, NaiDunia Media Pvt. Ltd, says that's just the start.

By 2016, the company aims to reach a readership of 15 million – nearly triple the circulations of the three biggest U.S. dailies, USA Today, Wall Street Journal and New York Times, combined.

The market for newspapers is on fire in India, where household spending and government investment fuelled the second-fastest economic growth among advanced countries last year, behind only China. That growth has given rise to a new, more literate consumer class – and the payoff for print media has been huge. The country's print industry, now worth about $4.5-billion U.S., grew by an estimated 10 per cent in each of the last three years.

The owner of NaiDunia is among several companies looking to take advantage of that remarkable growth. In 2008 it set up an office in Delhi and went national, with new local editions in several mid-size cities and a fat Sunday edition, including a glossy magazine, distributed across the "Hindi belt" states of Uttar Pradesh, Rajasthan, Haryana and Bihar.

Now the company is eyeing expansion into regional dailies. Editor-in-chief Alok Mehta rattles off 12 cities with populations under 10 million where the company's "quality content and smart design" will lure new Hindi readers. But NaiDunia ("New World" in Hindi) will have plenty of competition. Mumbai-based industry analysts predict regional Hindi papers will drive growth of nine to 15 per cent in each of the coming years.

Advertisers are seizing on that growth, targeting rural areas and small cities in their efforts to sell everything from real estate to consumer durables. Many of these readers have new money in their pockets, but there are limited ways for advertisers to reach them. They generally don't have televisions or use the Internet, and private radio is rare, said Smita Jha, who heads the media and entertainment consultancy with PricewaterhouseCoopers India.

Mobile-phone companies, for example, are placing targeted ads for their lowest-priced handsets in the pages of local-language, small-city dailies. While most of the traditional ad spend has been national – and focused on the elite, English-language dailies – a whole new cohort of local advertisers is developing to target the new consumers.

In India, print faces no immediate threat here from other media. Only seven per cent of Indians are regular users of the Internet. Cable TV news channels are ubiquitous, but the cost of a television, a cable connection and the electricity to run it (at about $1,000, all told) remains beyond the reach of a significant chunk of the market. Private radio stations have only recently been licensed – big newspaper companies are buying up many of the new licenses, identifying radio as a natural overlap with their existing infrastructure and brands.

Increased literacy is also playing a key role in the industry's dramatic ascent. This year's national census data shows an adult literacy level of 74 per cent, up nine per cent from the last census a decade ago. While much of that increase is attributed to literate young people who have been reached by an expanded public school system, the government is also doing extensive literacy outreach with rural adults.

"As soon as a person becomes literate, what they get is a newspaper – even before they buy a phone, it's the first luxury a man affords," said A.S. Raghunath, a veteran editor who now advises new entrants in the regional markets. The newspaper, he said, retains an aura of respect in India; the newly literate like to be seen with a paper. And with a cover price of one, two or at most four rupees (four rupees equal about eight Canadian cents), new-reading households will often subscribe to not just one paper, but two or three.

And while an English-language daily has an average of two to three pass-along readers, local-language papers have seven to eight, said Jha. "This is exactly where the opportunity is," she said – a national paper that starts a regional edition with a few pages of local news gets double the readers, and many happy new advertisers, for each copy compared to an English urban one.

Also fuelling the growth of print is the significant recent investment by the Indian government in infrastructure: Better roads, in particular, have allowed newspapers to broaden the reach of a product that has to be daily and timely.

New entrants to the regional markets are aggressive. Mr. Raghunath tells the story of one of his clients, Sakshi, a Telugu-language paper headquartered in Hyderabad that launched in 2008. Its backers brought in foreign investors and one of the world's leading newspaper designers from the U.S. They set up printing presses in 26 different cities, producing editions for Telugu-speaking populations in smaller cities as well as the metropolises of Delhi, Mumbai and Bangalore. They did intensive market research on what people wanted in a paper, then went door-to-door with incentive schemes and gift packages, and signed up more than a million readers – before they had ever printed a word. "It used to be you would launch and slowly grow," he said. "Now a paper is planned on the drawing table, promotions are carried out, and the launch happens with the paper saying, 'What you want, we will give you.'"

NaiDunia, which was founded by a pair of freedom fighters in the weeks before Indian independence in 1947, has an editorial staff of less than 100 people. But that's enough, Mr. Mehta said, because he knows what readers want: breaking news and tough but balanced political coverage. Every edition, Mr. Mehta assumes, will be shared between three generations, so NaiDunia includes business news, education news, career and financial advice, religious content and Bollywood gossip.

Mr. Raghunath said the new newspapers he is advising also see the need for multi-generational appeal in a single publication, but he boils it down to something particular: "Just geared towards aspiration – you have to evolve a brand which meets their aspirations."

In 2005, the Indian government loosened regulations to allow up to 26-per-cent foreign investment in news publishing businesses. Three listed firms – Jagran Jaran Prakashan Ltd., Deccan Chronicle Holdings Ltd., and HT Media Ltd. – currently dominate the market and attract about 85 per cent of advertising. All three took advantage of the new FDI rules and are cash-rich. They are all making significant forays into Internet development, banking on returns in about five years, analysts say.

"If you are coming as a pure financial investor, there is a lot of scope in both national and regional dailies," said Ms. Jha. National dailies offer the chance to exit within two or three years, while the regional dailies will take longer to show a solid return, she added. But both have plenty to offer publishers fleeing the moribund Western newspaper market.

Follow Stephanie Nolen on Twitter: @snolenOpens in a new window

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