In the context of India, as in other democracies, the process of democratization seems to be the dominant force that shaped the press structure and outcomes. A distinguishing feature of this process has been the movement of politics away from the centre to the peripheral states, the real sites where negotiations between various class and group interests are most effectively conducted. Local democratic processes and institutions could assume a strong intent as dominant local interests started to rise within regions. The process of differentiation was especially evident in the demographically and geographically stratified northern parts. Language, obviously, was an important aspect this transition. The disintegrative trends, however, have been counterbalanced, particularly since the beginning of the 1980s, by a drive towards federating the caste centered electoral politics on the Hindi news platform. Such parallel trends and counter tendencies have had a significant bearing on the structure of the newspaper publishing industry in the country in that newspapers could find a gradual widening of the spectrum to operate in.
However, the press would not have been able to respond to the stimuli unleashed by the widening political spectrum without the information technology revolution from the late 1970s. The new technology freed an otherwise capital-intensive and cumbersome technology-based industry of its major barriers to market entry and expansion. The possibility of separation of printing and other departments has made it easy for firms to spread geographically and save on transportation costs. Conventionally, newspaper industry is considered a typical case where economies of scale work through 'higher circulation' and larger share of advertisement market. This wisdom seems to have lost its edge by the beginning of the 1980`s.
The new technology helped the small and medium firms break the hegemony of large advertisers in deciding the economics of newspapers as also facilitated consolidation of many distinct facets of the interrelationship between press and politics through localization of news, decentralization of sources and consumers and effective exercise of centralized control over information and managerial functions. To put it differently, whereas the compulsions of a federal polity and competitive and contingent democracy meant ample potential for expanding the market for vernacular newspapers, access to technologies based on micro-electronics helped the regional press realize this potential. As the 1990s drew to a close, there was evidence of a resurgence of large circulation newspapers, especially in English, Oriya, Telugu, Gujarati, Tamil and Marathi, corroborating the arguments made by economists like Reddaway and Corden in the early 1950s and 1960s that the economics of newspapers is shaped by positive price and circulation elasticity of demand for advertising space and, hence, can enjoy great economies of scale.
