New Zealand Media and Entertainment (NZME) owns the NZ Herald and the Kapiti News; Fairfax owns the Dominion Post (and several other dailies) plus the Kapiti Observer.
Both Kapiti papers are freebies reliant on advertising; clearly there is enough of it to support both of them. One newspaper would see job losses although it would also be cheaper for businesses to just advertise in one paper rather than two.