People Daily offers free newspaper

July 1, 2014
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"Newspapers have started to experiment in a big way with a variety of new revenue streams and major organisational changes"/FILE
“Newspapers have started to experiment in a big way with a variety of new revenue streams and major organisational changes”/FILE

, Mediamax Network Ltd., a Kenyan media company associated with President Uhuru Kenyatta, began offering its newspaper for free as it seeks to become the country’s biggest-selling daily.

The People Daily, which previously cost 60 shillings (68 cents), is being distributed free of charge nationwide from today, Chief Executive Officer Ian Fernandes said in a phone interview from the capital, Nairobi. Content in the publication will also target younger, better-educated and more affluent readers than it did previously to draw advertisers, he said.

“We want to increase our circulation,” Fernandes said. “We are number two in the market. We are targeting to be the top. That’s what wins the hearts and minds of advertisers.”

Mediamax competes with Nation Media Group, East Africa’s largest media group which publishes the biggest-selling Daily Nation newspaper, and Standard Group Ltd., which has the Standard. Kenyatta’s family owns a company that holds a stake in Mediamax, said Fernandes. He declined to identify the company or quantify the size of the shareholding.

“The owners have deep pockets and possess political raison d’etre, and most probably the goal is to give the allies of the president a platform that can reach the masses,” Aly-Khan Satchu, chief executive officer of Nairobi-based Rich Management Ltd., an adviser to companies and wealthy individuals, said by phone today. “While offering the paper for free could be considered a brave move, it remains to be seen if the model will turn a profit.”

Circulation Wars

Fernandes said the People Daily currently has a circulation of 110,000, compared with the Daily Nation’s 170,000 and Standard’s 48,000. Nation Media and Standard Group officials declined to comment on their circulation when contacted by Bloomberg today.

Free daily newspapers are being operated successfully in most “first world” cities,’’ Fernandes said in a column published on the newspaper’s opinion page.

“The business model is similar to that of free television and radio, whereby advertising revenues pay for the cost of content gathering, production and distribution.”

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