Media houses lost Ksh1.5 billion in one year - Business Today News
Connect with us

Bt Intelligence

Media houses lost Ksh1.5 billion in one year



Shift in public advertising policy and rise of digital media giving mainstream media a painful pinch

The profit margins of Kenya’s media industry shrank by Ksh1.5 billion in the last one year as ad revenues diminished, according to new figures.

A shift in government advertising policy to centralise media buying last year has narrowed the key revenue stream to a trickle for most media houses while vicious digital platforms have raided the traditional media’s lunch table, biting off a huge chunk of the advertising pie.

While it has been common knowledge that media houses have been doing badly financially, the extent of the dent in their bottom lines emerged last week when one of the media industry captains, Radio Africa CEO Patrick Quarcoo, revealed that media houses had lost Ksh1.5 billion in the year to June 2016. As a result, 550 senior industry personnel had been sacked, a huge number seen agaainst the small number of media houses in Kenya.

“Some major players are in a loss position today, over 550 senior industry professionals declared redundant in a period characterised by dropping print circulation, radio and TV station closures and massive flux,” he said.

It’s been either loses or drop in profitability across the industry. The biggest media houses have been hardest hit. Nation Media Group’s (NMG) full-year earnings for 2015 dropped by Ksh300 million to Sh2.2 billion, from Sh2.5 billion a year earlier.

SEE ALSO >> Hundreds left jobless as NMG closes TV and radio

Standard Group, Kenya’s second biggest media house, recorded nearly Ksh400 million loss for the period, after issuing a profit warning in the second half of the year when profits dipped by 90% to a mere Ksh21 million. Investors and media watchers are anxiously waiting for the listed media houses’ first half profits for this year, which are expected to drop dramatically for NMG.

The trend is no different in the other media houses – Royal Media Services and Radio Africa – which are privately held and do not publish their financials. The two have invested heavily in broadcasting, and are undergoing restructuring at different levels, which has already pushed out some employees. KBC is owned by the government and thus not fully commercial and does not make its financial performance public.

READ >> Radio Africa to make hard choices as revenues shrink

Mr Quarcoo says Radio Africa Group is shifting to a new digital-based business model as the dynamics shift for media industry.  While Quarcoo, whose memo coincided with Radio Africa’s 16th year of operation, said the next year promises to be good one for the media with a General Election slated for August next year, he warned that the traditional media is likely to take further hits as focus shifts to digital media.

“The future for us and our media colleagues,” he said, “is unabashedly digital with big cost-cuts looming and corporate structural changes coming for all media businesses.”

Nation recently surprised the industry by closing down three radio stations and merging its TVs in a major restructuring geared at cutting costs and channeling move focus to digital media. For now, focus in on NMG and Standard Group’s half year results.


RECOVERY: Why it won’t be easy to revive KBC 

OPINION: Government is killing the media. That’s not a nice idea

STRATEGY >> Why big firms are lousy at new ventures – The case of NMG



  1. Victor

    July 18, 2016 at 5:48 pm

    If the media houses want to cope in these changing times, they better learn to invest in the online world, following the examples of other companies

  2. sk

    July 26, 2016 at 12:38 pm

    KBC numbers are in public domain. A report by Auditor General was presented to Parliament on the same…

Leave a Reply

Your email address will not be published. Required fields are marked *

News Updates

NEWS10 hours ago

British pensioner guilty of Kenya ‘holiday ‘ rape charges

The Crown Prosecution Service (CPS) said Keith Morris, 72, befriended the young victims' families over the past 20 years, giving...

Health1 day ago

US surrogacy agency withdraws from ‘perilous’ Kenya

Sensible Surrogacy now recommends new lower-cost programmes in the United States, which it says are completely safe and have the...

NEWS1 day ago

Kenya to reform laws to enhance biodiversity conservation

Tobiko says the ministry of Environment has formulated and reviewed laws and regulations to implement the provisions of the constitution...

Education2 days ago

Endowment Fund for Alliance High School launched

Fund targets to raise at least KSh 5 billion under the endowment funds, between now and 2026, the year the...

NEWS2 days ago

Uganda PM, Wangamati forge closer ties

Drawing from their proximity and shared culture including common language, Governor Wycliffe Wangamati said the two regions are in fact...

NEWS5 days ago

Youth PS Lillian Omollo, NYS chief Ndubai quit

State House Spokesman Manoah Esipisu says President Uhuru Kenyatta accepted the offer by the two officers to step aside for...

NEWS5 days ago

Police issue alert over emerging cult

Directorate of Criminal Investigations says the cult, known as Young Blud Saints, believes that there are three gods namely: true...

NEWS6 days ago

Cyprian Nyakundi released on DPP’s orders

Noordin Haji had also directed that no further criminal charges relating to the application should be registered against the blogger...

Politics6 days ago

I’m not boarding, Miguna tells Sonko

Nairobi County Assembly Speaker Beatrice Elachi had confirmed receiving Sonko's letter but asked him to regularise his Kenyan citizenship, a...

NEWS6 days ago

Patel finally speaks, pledges support for victims

Family says it continues to address immediate humanitarian concerns, providing food and nutrition, clean drinking water, healthcare and basic household...