Media Max Limited has started reducing the production team for its newspaper ‘People Daily,’ a move insiders say could be in preparation for moving the publication online.
Sources at Media Max have told sauce.co.ke that the Kijabe street-based media house has let go of a number of its print sub-editors, revise editors, designers and production editors as their services will no longer be required in the new operating model.
The company’s chief executive officer Ian Fernandes at that time said that the publication was also going to target younger, better-educated and more affluent readers than it did previously to draw advertisers.
“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.”
“Free daily newspapers are being operated successfully in most first world cities,’’ argued Fernandes, “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.”
We understand that while offering the paper for free was considered a brave move, it has been extremely difficult to turn a profit for Kenya’s first free mainstream newspaper.
Rapid changes on how news was being consumed courtesy of the digital disruption quickly moved advertising online leading to a sharp decline in ad revenues for print media.
For People Daily, the disruption could not have come at a worse time as it slapped their strategy right on the face. The newspaper’s plan to leverage its increased circulation for advertising has since then struggled to break even.
The biggest challenge for People Daily however has been the sharp rise in the cost of newspring in the last five years. After being walloped by the Covid 19 pandemic and inflation, print media houses are currently struggling to produce their editions due to the high prices of newsprint across the world.
Combined with high fuel prices and delivery labor shortages, all the mainstream newspapers have cut back on their distribution, print orders and the pagination of their publications. Nation and Standard have invested in new digital business models while preserving their cornerstone print businesses as long as possible.
As for People Daily, its management is caught between continuing to spend hundreds of millions in printing a newspaper which they will give Kenyans for free in an era where advertising revenues have fallen to an all-time low or pull the plug.
Worse, the company has kept its staff on half pay for the last three years since April 2020 citing cash flow challenges.
The dye has already been cast.
