Markets in Everything: Newspaper Rentals

Addis Ababa, Ethiopia (CNN) Garum Tesfaye is one of Addis Ababa’s “newspaper landlords,” a group of entrepreneurs in the Ethiopian capital who rent out papers to people too poor to buy them…..

For 20 to 30 minutes, these readers can get their hands on a newspaper for a fraction of the price of having to buy it. If they keep the paper longer than their allotted rental time, they have to pay extra. A newspaper in Addis Ababa costs about six birr (35 U.S. cents) to buy. In contrast, it costs only 50 Ethiopian cents (less than one U.S. cent) to rent one.

Comments

I wonder how they maintain market segmentation. Wouldn't most people prefer to rent? Then the newspapers would be in trouble.

I suppose transaction costs prevent this from being too widespread.

Newspapers being in trouble does not bother the readers nor landlords.

Comments for this post are closed

Comments for this post are closed

File sharing, only with actual files...

No, not at all. "File sharing" is duplicating the files. This is more like DVD rentals, a middleman buying DVDs solely to rent them out.

Comments for this post are closed

Comments for this post are closed

Six birr = $0.35 and 50 Ethiopian cents is less than $0.01?

Comments for this post are closed

I was also thinking that transactions costs would doom this, but I guess not.

Couldn't really happen in a country like the U.S., because 1 cent is essentially the same as 50 cents, even for the poorest U.S. citizens.

Easy enough to test. Try tossing 1 cent into a street beggar's cup and see how his reaction differs from the guy you just gave 2 quarters to.

Comments for this post are closed

Comments for this post are closed

It happens all over Africa, from what I have heard.

Comments for this post are closed

Re: Greg especially because I have a hard time believing that newspaper renters would rent out to 35+ people for 30mins each just to break even...

Comments for this post are closed

Six birr is six hundred Ethiopian cents, so renting a paper is one-twelfth the cost of purchasing one. 35 US cents divided by 12 is three cents, not less than one cent.

Comments for this post are closed

What you describe is the Libertarian Library.

Comments for this post are closed

Why not describe the market for single cigarettes are something equally alien to wealthy North Americans.

Comments for this post are closed

FYI most of the people who read the news paper looks for vacancy coz you will not buy all news paper to read ,and on
the other hand each news paper contain vacancy. so it is not about buying a newspaper ,it is about finding all information with limited time.

This is the outcome of Prime Minister Meles Zenawi's seasoned leadership in transforming the nation's economy over the past couple of decades. Real per capita income has increased from $192 when Meles Zenawi took power in 1991 to about $435 in 2010. When people's income increases their newspaper purchasing power declines??

Comments for this post are closed

Comments for this post are closed

Sounds like they all need bitcoins.

How would they access them?

Comments for this post are closed

Comments for this post are closed

I think I'd prefer newslord to "newspaper landlord".

Comments for this post are closed

Our company is engaged in the professional manufacturer of damper, air cylinder, oil cylinder, and hydraulic station. The company has many year's production experience and strong technical power.

Comments for this post are closed

Always fascinated to see how many business models are born out of addressing a market that has a "need" but not "purchasing power" (classic definition of "demand") or the willingness to "buy" what they can "rent". When I was a child growing up in India in the '80s, we used to get many newspapers and magazines regularly at home. While we paid for 3 or 4 newspapers, and a few political magazines, there were some that my then-teenage sister was keen on that was never going to be "paid" for, e.g. film magazines. Our newspaper-delivery-wallah used to lend us the magazines for a fixed number of days and then charge us a tiny sum in our monthly bill. On Sundays he also delivered several other newspapers (Sunday newspapers are probably interesting in most countries) and take them back Tuesday morning. So the model is not new. The need and the product (perishable but not in the fruit-and-veg sense) together help make the model viable. It makes sense also because more people get to consume the content out of papers that may remain unsold and go into recycling anyway at the end of their very limited "shelf life".

Comments for this post are closed

Comments for this post are closed