The World: India proves a magnet for big-name publishers

The country's political, cultural and economic climate is attracting increasing international investment.

When Liz Hurley graced the cover of the first Indian edition of Hello! magazine in mid-March following her lavish marriage celebrations to the Indian businessman Arun Nayar, there were two conclusions to be drawn. First, celebrity and the glossy fare offered by the likes of Hello! are now a global phenomenon. Second, India is a huge draw for foreign publishers.

The past three years have seen some of the biggest names in international publishing launch editions in India as the market reaches new levels of maturity.

Time Out, Maxim, OK!, Cosmopolitan, Seventeen and Marie Claire are just some of the magazines available at both British and Indian newsstands. But what makes India such a promising market?

China and India, which together account for 40 per cent of the world's population, are the two most attractive developing markets for publishers considering a global expansion path. Both markets are rapidly developing an affluent middle class, with high levels of literacy across all strata of society. But for some, India has the edge.

English is the Indian lingua franca, making it easy to communicate and share content for a start.

While China is seen as a legal minefield, with publishers concerned about many issues from intellectual property rights to press freedom, this is something of much less concern in democratic India, which also enjoys higher levels of media penetration.

All of this paints a positive picture of India. Yet the realities are often more complex than the broader demographics suggest.

Time Out launched its Mumbai edition in September 2004, and its Delhi edition launches this week. Time Out's international managing director, Cathy Runciman, says that although India has more to recommend it to publishers than most, the realities pose problems.

She says: "India is attractive for investment and partnerships in all business areas - beyond the force of demographics, the economic and educational developments in the market are phenomenal. Nevertheless, in publishing, one needs to have realistic expectations.

"There's a lot of activity in the market, magazine cover prices are historically low, and distribution is challenging. It's possible to create magazine brands that both readers and advertisers want and to develop cross-platform opportunities, but local expertise and a long-term game plan are essential."

For these and other reasons, foreign media companies have been cautious in making big investments. Minority stakes and licensing deals tend to find favour over equal joint ventures, in spite of a lifting of the restrictions on foreign ownership three years ago. That saw the limit on foreign equity rise to 74 per cent foreign ownership on non-news and current affairs media.

Less than a year later, the BBC entered an unusual equal partnership with the Times of India Group to form Worldwide Media, launching Top Gear in 33 cities.

Time Out has licensing agreements with local publishers in the country, as in all other markets around the globe.

Dennis Publishing's only India title to date, Maxim, has followed the same strategy through a licensing agreement with a local company, Media TransAsia.

Richard Bean, the international director of Dennis Publishing, says the decision to strike a licence deal rather than a joint venture was driven by the need to launch quickly. "In 2005, when I first looked at the India market, I was struck by the vibrancy, the positivity of everyone there," Bean says.

"But what really hit me was that Cosmopolitan in India had a readership that was 50 per cent male. That clinched it for me," he adds.

"The main reason we followed the licensing route was speed. It's the easiest way into a market. An acquisition or joint venture just takes too long. We were after being the first in the market. The window of opportunity was based upon the alignment of three key elements, which were political, cultural and economic conditions. We had to get out there."

Faced with such a pressing need to move swiftly, the challenge was identifying suitable partners.

Runciman says that finding the right partner with local expertise was crucial to making it possible for Time Out to launch in India and that it goes further than simply a meeting of minds but an ability to fulfil a similar vision.

She says: "While we, Time Out Group, provide the brand, marketing support, access to appropriate content such as our film, music, book and travel archives, and a dedicated and very hands-on approach to training, working with and supporting the local team, we believe uncovering fantastic city-centric content, establishing the magazine's voice and launching the brand in the market is best done by a local, independent publisher."

And while licensing offers the advantage of speed, Bean warns that it can take a bit longer than expected from signing a deal with a partner to printing the first issue.

It took eight months to formulate the licensing agreement for Maxim, and obtaining a Government publishing licence was more laborious and time-consuming than Bean had expected, though he does not reveal how long it actually took. Nonetheless, Bean says it was well worth the wait, saying Maxim India now has a circulation of 80,000.

Dennis is upbeat about the future in India, he says, announcing plans to launch "a couple more titles in India before the end of the year".

So with rising incomes, high media penetration and a relaxation of media ownership laws in recent years, India offers much hope for magazine publishers. For news content, though, the law still imposes a 26 per cent ownership ceiling on foreign owners.