Board Actions

Summary of July 2010 U.S. Board Actions

July 27, 2010

Arlington Heights, Ill. (July 27, 2010)—The following are highlights of the actions taken by the Audit Bureau of Circulations’ (ABC) board of directors at its meeting held on July 21-23. (Note: The full update to ABC’s bylaws and rules is regularly made available on ABC’s website within weeks following each board meeting.)


Business Publications

Consumer Magazines

Farm Publications

Newspapers

Other Developments


BUSINESS PUBLICATIONS

Business Publications to Report Separate Circulation Averages for Different Frequencies
Unanimous Consent – Effective with December 2010 Publisher’s Statements
Traditionally, ABC business publication reports have only shown one circulation average for each member. With the increased use of digital circulation, many publishers have added weekly digital products to their monthly print publications.

Beginning with December 2010 statements, the board voted to allow U.S. business publications to report products with different frequencies as separate circulation averages. For example, a publisher of a monthly magazine may want to add a digital-only weekly edition. The magazine has 80,000 combined monthly print and digital subscribers and another 20,000 print-only subscribers. In this example, the first issue of the month may be sent to all 100,000 print and digital subscribers. Any additional issues throughout the month would be served in a digital format and only sent to the 80,000 digital subscribers. Both frequencies will now be reported separately on ABC statements.

A prototype of the new report format is available on ABC’s website.

Qualified Paid Circulation Report Format Eliminated
First Passage
ABC business publication members currently use two report formats: qualified paid circulation (blue), and qualified paid and/or qualified nonpaid circulation (ivory). The format and data requirements in each report are identical, with the exception of the nonpaid circulation.

Because the majority of ABC business publication members now use the qualified paid and/or qualified nonpaid circulation report (ivory), the board gave preliminary approval to eliminate the qualified paid report. If given final approval in November, this report format will not be available for the December 2010 filing period.

To accomplish this, the board agreed to modify the following rules: Bylaw 2.2 Eligibility for Membership, Rule D 4.1 Publisher’s Statements, Rule D 5.1 Geographic Analysis, Rule D 5.2 Business Analysis, Rule D 5.3 Age of Source, Rule D 11.1 Additions and Removals.



CONSUMER MAGAZINES

Board Modifies Public Notification Practices for Magazines That Do Not Meet Filing Deadlines
Unanimous Consent – Effective with December 2010 Publisher’s Statements
The board unanimously agreed to modify the public notification practices for U.S. consumer magazines that do not file their Publisher’s Statements by the publicized deadlines.

Beginning with the December 2010 reporting period, the following actions will be taken for delinquent filers:

  • In FAS-FAX, a publisher that has not filed by the deadline will be noted as a “no file” in the report. A separate, full general membership notice will also identify any magazines that did not file by the published deadline.
  • In supplemental FAS-FAX, a publisher that has not filed by the deadline will be included on a no-file list that is distributed to the membership with the release of the supplemental FAS-FAX report. A separate, full general membership notice will also identify any magazines that did not file by the published deadline.
  • In the e-Data center, publishers that have not filed their statements by the end of the third month following the close of the reporting period (March 31/Sept. 30) will have a note in their online listing stating that the report has not been received by ABC and the previously released statement is now considered out-of-date.
  • Finally, publishers that have not filed their statements by the subsequent board meeting will be included on the board’s agenda for notification of delinquent filing. If ABC has not received the Publisher’s Statements by the seventh month following the close of the reporting period (Jan./July), the board will be asked to consider terminating the membership of the magazines.

To accomplish these changes, the board modified Rule B 3.2 Time Limit for Filing Publisher’s Statements.

Analyzed Nonpaid Bulk Circulation Can Now Include Digital Copies Accessed Via an Unrestricted Website
Unanimous Consent – Effective July 26, 2010
The board agreed to allow analyzed nonpaid bulk circulation claims to include any replica digital edition copies accessed by a consumer via an unrestricted website.

Updated consumer magazine digital edition guidelines are posted on ABC’s website.

Task Force Explores New and Future Publishing Platforms
For Information
The ABC board received an update from a new consumer magazine task force that is exploring new and future publishing platforms and how to best incorporate those distribution methods on ABC reports. The goal of the task force is to allow publishers to present advertisers with a comprehensive picture of a magazine’s various points of contact while still providing transparency and details by distribution channel. The task force, comprised of representatives from both the publishing and buying communities, anticipates finalizing its recommendations by early 2011.

Scan-Based Trading Task Force Work Continues
For Information
Scan-based trading has been a subject of discussion in the magazine industry for the past few years. As the practice achieves greater acceptance and usage, several issues have arisen that may affect ABC reporting. The Magazine Directors’ Advisory Committee, the Magazine Buyers’ Advisory Committee, and a separate scan-based trading task force are engaging in discussions about the key issues and are working toward a recommendation for the ABC board to consider in early 2011.



FARM PUBLICATIONS

Multimedia Report Format Approved for Farm Publications
Unanimous Consent – Effective with December 2010 Publisher’s Statements
The board voted to allow ABC-member farm publications to use a multimedia report to display data for various media platforms, including print publications, websites, e-newsletters, digital subscriptions and more. The multimedia report format provides publishers with flexibility and customization while ensuring that advertisers receive the audited data needed to make informed buying decisions.

A prototype of the report is available on ABC’s website.



NEWSPAPERS

U.S. Newspaper Publisher’s Statement and FAS-FAX Formats Finalized for March 2011 Reporting Period
Final Passage – Effective with March 2011 Publisher’s Statements
At its March 2010 meeting, the ABC board of directors agreed to adopt the NAA/ABC Vision Committee’s recommended Publisher’s Statement prototype. At this meeting, the board finalized its approval of this report. It will be used by U.S. newspapers beginning with the March 2011 reporting period.

The new U.S. newspaper Publisher’s Statement prototype reflects the evolutionary changes many newspapers are undergoing as they expand their brands beyond print-only editions to multiple platforms and ad channels. The first page of the new report allows newspapers to optionally present a summary that highlights their total average paid and verified circulation, Audience-FAX readership data and publishing plans for a variety of products.

Subsequent pages of the report detail circulation for the core print newspaper, its related digital editions—including e-reader and mobile distribution—and various other branded editions such as audience-focused newspapers, alternate-language newspapers or community newspapers.

The updated U.S. FAS-FAX prototypes will include additional columns with information on digital replica and non-replica editions as well as top-line circulation data for branded editions.

The new prototypes replace the previously circulated Oct. 1, 2010, reports that were part of the newspaper industry’s qualification and reporting initiative.

Board Approves New Rules for Print/Digital Hybrid and Bundled Subscriptions; Defines Fulfillment for This Type of Circulation
First Passage – Effective Oct. 1, 2010
The ABC board also agreed to standards for qualifying and reporting print/digital hybrid and bundled subscriptions.

An example of a hybrid subscription is when a subscriber receives three days of the newspaper in a print format and four days in a digital format. The newspaper only counts one copy per day.

An example of a bundled subscription is when a subscriber receives the newspaper in a print format. Bundled with the print edition, the subscriber might also receive access to the newspaper’s digital edition, access to the newspaper’s mobile app or access to the newspaper’s e-reader edition. The newspaper may want to count multiple copies per day.

The board’s actions considered the two most common methods newspapers use to market subscriptions: the first addresses bundled or hybrid subscriptions where the newspaper uses an incremental or itemized pricing model and the second scenario is when the newspaper does not collect an incremental amount for each product sold in the subscription.

Qualifying Itemized or Incrementally Priced Promotions
Beginning Oct. 1, 2010, newspapers that receive at least five percent of the price of the first or base subscription for each additional product made available in the offer can qualify all copies as paid circulation.

For example, if a newspaper offers subscribers a three-day print subscription for $100 for one year, it can additionally offer to serve the other four days in a digital format for an extra $5 per year.

Additionally, a newspaper could offer subscribers a seven-day print subscription for $100 per year and then offer access to the newspaper’s digital edition for an extra $5, access to the newspaper’s mobile app for an extra $5 and access to the newspaper’s e-reader edition for an extra $5. If the subscriber wanted access to all formats of the newspaper, he would pay a total of $115 for the year.

Qualifying All Other Promotions
If the newspaper does not receive at least five percent of the price of the first or base subscription for each additional product in the offer, the following register, activate and fulfill requirements are effective:

    • Register and Activate (Verified Circulation)
      To qualify as verified circulation, subscribers are required to register and activate the digital edition components of their subscriptions. This circulation will qualify as “verified” on ABC reports. For example, a subscriber would need to register and create an account on the newspaper’s website to qualify the digital edition as verified circulation. Similar measures would need to be taken for mobile apps and e-reader editions.
    • Register, Activate and Fulfill (Paid Circulation)
      To qualify as paid circulation, the rules go further to require that a subscriber’s digital edition must also be fulfilled, i.e., opened or accessed, if a newspaper wishes to claim that circulation paid on ABC reports.

At this meeting, the ABC board further defined the fulfill requirements:

  • In a hybrid scenario, the print edition of the newspaper counts as paid circulation. For the digital component of the hybrid, the newspaper must demonstrate that the subscriber accessed the digital edition, based on the following schedule:
    • Effective Oct. 1, 2010 for March and September 2011 Publisher’s Statements, the digital edition must be accessed at least once in the six-month Publisher’s Statement period to qualify the circulation as paid.
    • Effective Oct. 1, 2011 for March and September 2012 Publisher’s Statements, the digital edition must be accessed at least once per quarter to qualify the circulation as paid.
    • Effective Oct. 1, 2012 for all subsequent Publisher’s Statement periods, the digital edition must be accessed at least once per week to qualify as paid circulation.
  • In a bundled promotion, the first or base subscription counts as paid circulation. For any subsequent digital editions, the newspaper must demonstrate that the subscriber accessed the digital edition at least once per week to qualify the circulation as paid.

The board is expected to finalize this rule change at its meeting in November, although the changes will be effective Oct. 1, 2010.

Board Gives First Passage to Numerous U.S. Newspaper Rule Changes
First Passage – Effective Oct. 1, 2010
The ABC board agreed to give numerous rules first passage at this meeting. The board is expected to finalize these rules at its meeting in November, although the rules will be effective Oct. 1, 2010. All of the rule changes are related to the work and recommendations of the NAA/ABC Vision Committee. Below is a complete summary of the proposed rule changes:

  • A 1.2 Permissions and Prohibitions – Modify rule to govern publicity issues regarding newspapers comparing like data elements (e.g., paid, verified and branded editions.
  • C 1.2 Prices – Modify language from electronic editions to digital editions.
  • C 2.1 Circulation Averages – Modify rule to allow for multiple “power days.” Also modify to allow U.S. newspapers to report an executive summary and require sub-paragraph detailed reporting for print, branded, and digital editions. Finally, exempt CNA newspapers from the executive summary disclosure.
  • C 2.2 Morning, Evening, All-Day and Sunday Designations – Eliminate the requirement for newspapers to include a general description of policies on local display, classified and national advertising.
  • C 2.4 Separate Averages – Modify to define a branded edition, including allowing foreign-language editions to be reported as a branded edition. Also modify to provide an exclusion from U.S. newspapers reporting branded editions separately if the circulation is less than three percent of the total circulation or less than 2,000 copies per issue. Modify to define a replica digital edition and to include updated news reporting. Further clarifies that all digital editions should be restricted access domains and not public websites.
  • C 3.2 Educational Programs -- Modify rule to require educational copies to be supported by affidavits and add qualifications for NIE home delivered.
  • C 3.3 Other Verified Distribution – Adds a stipulation requiring advance notification to ABC of all home delivery—targeted distribution via the Preprint Projection Center. Allows for digital edition service, if the subscriber accesses the copy. Expands verified distribution to publisher-controlled venues, including honor boxes and ongoing hawker distribution as long as distribution is consistent in volume and location.
  • C 5.3 Combination Sales – Modify rule to allow for digital edition service in Joint Distribution Agreement (JDA) situations, to be based on the requirements of Rule C 5.10 Subscriptions Involving Digital Editions.
  • C 5.10 Subscriptions Involving Digital Editions – A new rule that defines hybrid and bundled subscriptions and defines the qualifications as either incremental pricing or fulfillment. This rule also defines the categories of digital verified circulation.
  • C 5.11 Vacation Paks – Modify rule to exclude digital editions from vacation paks.
  • C 5.13 Subscription Offer Based on Acceptance Unless Declined – Modify rule to allow digital editions to be used in frequency conversions, based on the qualification standards outlined in C 5.10 Subscriptions Involving Digital Editions.
  • C 5.14 Transfers on Consolidation – Modify rule to require new activation and access when two or more newspapers merge.
  • C 5.15 Purchase of Subscription List – Modify rule to require new activation and access when a newspaper sells its subscriber list to another newspaper.
  • C 7.9 List of ZIP Codes and Towns Receiving 25 or More Copies -- Modify rule to require that branded and digital editions be reported separately in this analysis.
  • ABC Policy Regarding the Sale of Carrier-Delivered Circulation and Single-Copy Sales of Newspapers – Modify policy to allow newspaper to qualify digital editions. Only those digital editions accessed by the subscriber will qualify for inclusion on ABC reports.

Qualifying Current Digital Editions Beginning Oct. 1, 2010
For Information
For current digital edition subscriptions, the board agreed to continue to qualify the circulation as paid—even if it does not meet the new requirements—until the first renewal of the subscription after Jan. 1, 2011, at which time the new qualification criteria would become effective.

ABC Board to Conduct Second Advisory Vote Regarding Newspaper Eligibility Requirements
For Information
At its March meeting, the ABC board of directors agreed to initiate a newspaper member advisory vote to potentially eliminate the requirement that a newspaper’s distribution must be paid, as defined in ABC’s bylaws, to be eligible for membership in ABC. The results of the nonbinding vote, from all of the ABC-member newspaper divisions, were 46 percent in favor of eliminating the paid circulation requirement and 54 percent against eliminating the requirement. Given the results, the ABC board agreed to leave the current requirements in place that newspapers must have at least 70 percent of their total circulation as paid.

The board also agreed to initiate a second advisory vote of newspaper members to evaluate member receptivity to calculating the 70 percent paid circulation eligibility based only on the member newspaper’s circulation, exclusive of any branded editions. The board further proposes that the total circulation of the member newspaper, including branded editions, must be predominantly paid or home delivered.

The new advisory vote will also seek member input on lowering the 70 percent paid threshold to 50 percent paid for weekly newspapers.

Additional details about the advisory vote will be distributed to newspaper member representatives in the next month. Newspapers are encouraged to contact ABC’s service department at (224) 366-6341 to ensure the contact information for their member representative is up-to-date.

Board Agrees to Continue the Newspaper Consolidated Media Report Program
For Information
The ABC board agreed to continue the popular newspaper consolidated media report program that allows U.S. newspapers to display a variety of print, online and audience data.



OTHER DEVELOPMENTS

New U.S. and Canadian Advertiser Directors Appointed
For Information
Christopher P. Schembri, vice president of media services, at AT&T, was appointed to the ABC board of directors. Schembri represents U.S. advertisers.

Shelagh Stoneham, vice president, brand and marketing communications, Rogers Communications Inc., was also appointed to the ABC board of directors. Stoneham represents Canadian advertisers.

ABC Board Expanded to 38 Directors
For Information
The board agreed to expand the number of directors representing ABC members from 36 to 38 with one new directorship representing Canadian newspapers and the second representing North American advertisers or advertising agencies.

Board Votes to Maintain Current Audit Rates
For Information
The board of directors voted to maintain ABC’s current audit rates and other fees for the next year. ABC has not increased its rates or fees since January 2007.