The influence of free daily newspapers on advertising market share of pay newspapers in Nairobi

Sogoti, James
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Strathmore University
The last two decades have been definitive for media in Kenya. The operating environment has become liberalized and more competitive, due to improved changes in Kenya’s communication laws and enhanced rights to access of information. Newspaper publications were almost exclusively dominated for over five decades by two players The Standard Group and Nation Media Group. Disruptive ideas have been introduced in the market by new entrants who are publishing and giving newspapers for free to their target readers. The main objective of the study therefore was to establish the effect of the new newspapers concept of free daily newspapers on advertising market share of paid daily newspapers. The study checks trends of circulation copies of free newspapers, usage rate of free daily newspapers by advertisers and seek to find out the trends of volumes of advertising in free newspapers. The period of focus was between March 2014 and March 2015 but more emphasis was done in the last six months. The study used descriptive survey and regression analysis to analyse the data. The research applied judgemental and purposive sampling to pick a total population of 45 respondents. There were 33 correctly filled respondents which constituted 73.7% response rate. The study achieved an interesting outcome of free newspapers which indicated that all the three hypotheses are affecting advertising market share of pay newspapers although at varying levels. The outcome of trends of free newspapers circulation and advertising market share of paid newspaper is strong, negative and statistically significant. While usage rate of free daily newspapers and advertising market share was moderate, negative and statistically significant. However, the relationship between volume of advertising in free newspapers and advertising market share is negative but weak in significance. The findings are also supported by comments picked while interviewing the Chief executive of Media Max and Advertising Director of Xtra News publishers. The study confirmed higher significance for the first hypothesis, H1, where there was a significant relationship between the trends of circulation copies of free newspapers and advertising market share of paid newspaper.Free newspapers may offer different news contents to different audiences, when compared with traditional, paid-for newspapers, but they, nevertheless, concentrate on news, and thereby provide society with information on current affairs. The study had some limitations which were experienced during the study. The scope of focus was limited to Nairobi while there could have been an opportunity to study the entire country. The sample understudy can also be expanded to involve more stakeholders within the value chain of newspapers; this will be beyond key informant but also to include newspaper vendors. Since publication and distribution of free newspapers is still a new print media concept in Kenya, further research on the same subject could be done after three years to evaluate changes that might have occurred. Moreover expansion of the study to cover the entire country Kenya will be of benefit to more stakeholders.
A research project submitted in partial fulfillment of the requirements for the Degree of Masters in Business Administration
Advertising, Daily Newspaper, Nairobi