01/09/2009 05:12 am ET Updated Dec 06, 2017

Brazil's Newspaper Industry Booming

SAO PAULO -- 72-year-old Salvador Neves arrives every weekday before dawn at Banca Estadao, his newsstand in downtown Sao Paulo. Sporting his signature green felt hat and salt-and-pepper mustache, and greeting his customers by name, he gets to work doing what he's done since immigrating from Portugal 52 years ago: selling newspapers.

If he worked in the United States, where newspaper circulation is in a long decline and ad revenue is collapsing (hello Tribune Co., New York Times, etc.), this story would follow a predictable pattern: Economy shifts, beloved storekeeper shutters business, neighbors lament.

Not so in Brazil. "It's holding up pretty well," said Neves. "People like to read to pass the time. Not everyone has the internet. They still advertise a lot in the newspaper."

He's being modest: Brazil is in the midst of a newspaper boom. Brazilians bought 24 percent more newspapers in the first three quarters of 2008 than they did in 2006, according to the Instituto Verificador de Circulacao, the Brazilian equivalent of the Audit Bureau of Circulations. According to monthly reports produced by Meios e Mensagem, a marketing publication, in the first three-quarters of 2008 alone, revenue was up 15 percent over the same period in 2007. (By contrast, American newspapers' ad revenue fell 18 percent between the third quarter of 2007 and the third quarter of 2008.)

This is no one-year phenomenon either: advertising in newspapers has grown every year since 2001. "After the early part of the decade, newspapers started growing both in circulation and revenue," said Salles Neto, president of Grupo M&M, which publishes Meio e Mensagem. "The reason: improving distribution of wealth."

The numbers bear him out: Class C, the Brazilian term for the middle class, grew from 33 percent of the population five years ago to 54 percent today. That has caused an explosion of titles and circulation among the so-called "popular" newspapers, which generally rely heavily on sports, crime and photos of scantily clad women to attract readers. They are filled with advertisements for retail stores aimed squarely at the emerging middle class, with deals like $400 laptops for 20 monthly installments of $20.

"Class C's purchasing power is growing," said Marcello Moraes, executive director for circulation at Rio de Janeiro's O Globo. "And now they read the news. They didn't used to buy the paper. Now they have access."

Neves has noticed at his Sao Paulo newsstand. His best seller used to be the somber Estado de Sao Paulo, but now his best seller is the more down-market Diario de Sao Paulo, which sells about 120 copies a day, compared to Estado's 30. But the most striking example comes from the state of Minas Gerais, where circulation of Super Noticia -- which goes for the equivalent of an American dime -- has grown 134 percent in the last two years. It is now the second biggest newspaper in Brazil.

But the three big, national papers aimed at Classes A and B, including the Estado, its rival Folha de Sao Paulo, and O Globo, are growing in both circulation and heft. These days they land with a definite thump on doorsteps around Brazil's two biggest cities, teeming with full-page ads for new luxury apartment complexes, upscale cell phones and university programs. And the market for classified advertisements has not fled online as fast as it has in the United States.

The boom extends to smaller papers in places like Campinas, a city of a million outside of Sao Paulo. A few years ago, the company that owns the city's dollar-a-copy main paper, Correio Popular, launched a 25-cent tabloid alternative called Noticia Ja. Though Noticia Ja now sells about 40,000 copies a day, Correio has held nearly steady, losing only about 2 percent of its prior circulation of about 37,000, said Marcelo Moraes, the marketing manager for the company (and no relation to Marcello Moraes of O Globo). The company's advertising revenue through October is up 25 percent over the same period last year.

Free papers are also huge in Brazil. On Monday during the morning rush hour, a woman arranging piles of the free Metro News paper outside the Anhangabau subway station was swarmed every time a train arrived, as Brazilians of all shapes, sizes, ages and colors snatched papers.

But not all is so bright. Americans still buy more newspapers than Brazilians, per capita, so to some extent Brazil is simply catching up as incomes and literacy rates rise. And though Brazil has escaped the brunt of the world financial crisis so far, many Brazilians are bracing for a delayed hit.

Neves is one of them. "Starting in January, we're in for it," he predicted, grimacing under his green hat. launches January 12, 2009.