News Corp. (NWS), the media giant owned by Rupert Murdoch, will strengthen its presence in India with the creation of six regional television channels.Murdoch has in the past warned that an advertising slowdown in the newspaper and television industries would have a decidedly negative impact on U.S. media businesses. At the same time, however, India’s entertainment market is just beginning to realize its potential.

About 17 million viewers joined India’s burgeoning television market in the first half of 2008. Television advertising responded to the broader audience, growing 26% in the first six months of the year.

The media and entertainment market in India is expected to grow by 18.5% by 2012, according to consultancy firm PwC. That’s the fastest among the BRIC countries (Brazil, Russia, India and China), as China’s rate of growth over the next four years is projected at 14.6%.

Annual revenue for television in India is expected to double to $11.6 billion in that time, as well, according to Media Partners Asia.

“In the long term, the media and advertising outlook for Asia is tremendous as wealth is created and people get educated and you see the emergence of a wealthy middle class,” Reuters quoted Murdoch as saying earlier this week.

News Corp. aims to exploit that remarkable growth potential with a $100 million investment through Star India, a wholly owned subsidiary of the company. Star India broadcasts entertainment and music on channels such as Star One and Star Plus. It also has a 26% stake in Media Content & Communication Services India, an operator of three news channels.

The move could be a precursor to an expansion into India’s movie business as well. The Indian film industry, known as “Bollywood,” produces about 1,000 movies a year, making it one of the most prolific in the world. Warner Group (TWX), The Walt Disney Co. (DIS), Sony Pictures Entertainment (ADR: SNE), and Viacom Inc. (VIA) already have already undertaken joint ventures in India and News Corp.’s 20th Century Fox movie studios won’t want to stand on the sidelines much longer.

News Corp. also plans to nearly triple the size of its editorial staff at its Indian Dow Jones from 25 employees to 70, although government regulations make it difficult to do business, particularly in print.

“We don’t see ourselves taking a stake in print… because they are not available and because we won’t want to take just a 26% stake,” Murdoch said.

Foreign investment in news publishing and broadcasting is limited to 26% by the government.

Still, Murdoch remains positives about India’s prospects.

“We are happy here,” he said “The slower expansion of the economy may slow growth a bit, but in the long term there is a lot of growth to be had.”

Source:  News Corp. Expands Presence in India with $100 Million Investment