19th World Editors Forum and 64th World Newspaper Congress

1. Lessons from emerging
markets
William Pike
CEO
The Star Publications
Kenya

3. Radio Africa Group
 1994- We started Capital FM in Uganda, the first private
FM radio in sub-Saharan Africa
 2000 – We started Kiss FM in Kenya, where we now
have 5 radio stations and a TV station.
 Group Managing Director Patrick Quarcoo was also keen
to start a newspaper in Kenya
 In January 2007, I left the New Vision in Uganda and
moved to Kenya to start the Star

4. Newspapers in East Africa
 The New Vision was the government newspaper in Uganda
(now 60% privatised)
 I was the MD and Editor in chief from its startup in 1986. By
2006 when I Ieft, it was making $2.5m annual profit on
turnover of $18m from a negligible initial investment
 Newspapers in Kenya are also very profitable – Standard $5m
and Nation $25m in 2011
 Standard is 100 years old, Nation 50 years old
 Previous attempts to challenge the duopoly had failed

5. Star track record
 Star now No 3 paper in the Kenyan market
 Circulation 30,000 and climbing steadily
 Advertising revenue of around $400,000 per month and
climbing
 Breakeven achieved with profit of $310,000 in 2011/12
 Board of directors want Star to become the No 2 paper

6. Cost of investment
 2007 Initial shareholder capital $1.3 million
 Late 2007 share call ( to purchase press) $0.9 million
 April 2009 share call (working capital) $1.25 million
 2011 Share call (working capital) $1.13 million
 TOTAL EQUITY investment $4.58 million
Bank loans
 2007 loan Stanbic $0.66 million
 2010 loan I&M $0.41 million

7. Profit in Shillings (red
projected)

8. Newspapers have room for
growth
 Kenyan population is 38m; mobile phones 16m; Internet
users 6m.
 People in Kenya still believe in the printed word
 Total newspaper circulation is around 290,000 copies for
five daily papers i.e. one paper for every 140 people
 Newspapers cost Sh50 (60 US cents).
 Newspapers will become more affordable as economy
grows (present growth 4.5%)

9. The Star strategy
 Primarily it is to be a low-cost but high quality newspaper.
 Running costs (inc depreciation) are now around Sh56m
($660,000) per month so it is not cheap as such
 But it is much cheaper than our two competitors
 Our calculation is that as they inevitably downsize in the
Internet age, they will have to compromise on quality.
 And as our revenue increases, we can increase quality, and
therefore our competitiveness

10. Key investments
 We bought a new Manugraph Cityline press with two
towers (16 pages) – just expanded to four towers.
 Respected international designer David Billington created
the template
 Used open source database Converge for editorial
functions
 These key investments were all high quality but cost-
effective

11. Star Front Pages

12. Target market
 Breaking news in Kenya now comes through radio, TV,
SMS, etc.
 So it is important to be an analytical paper.
 We try to run more op-eds on a daily basis than our
competitors
 These op-eds follow a strong ‘reform agenda’ to
differentiate ourselves from our more conservative
competitors

13. News strategy
 We also run more local news than our competitors as this
information may not necessarily be available through
electronic media
 As the ‘new kid on the block’, we shout louder than our
competitors to get noticed
 We are more aggressive in breaking stories, in pushing
the boundaries on libel, in running investigation stories

14. Age demographic
 In European markets, age is a problem
 In Kenya and East Africa, young people still want papers
 More young people (18-34) read newspapers than listen to
CDs or watch DVDs
 Only TV and radio have more penetration than print for
young people (Ipsos Synovate)
 Slogan ‘Smart People Read The Star’ targets opinion leaders
and younger generation

15. Past 7 Days Media Activities

16. Conclusion
 The shareholders have so far invested $4.5m and
accumulated losses are $3.65m over five years.
 We need annual profits of at least $1m to repay their
confidence. We aim to get there in 2013/4
 But newspapers are not just profit machines, they are
also a form of public service
 We have been an active part of the ‘reform agenda’ over
the last five years. This may prove to be our lasting value.