Board Actions

Summary of March 2010 U.S. Board Actions

March 16, 2010

Schaumburg, Ill. (March 16, 2010)—The following are highlights of the actions taken by the Audit Bureau of Circulations’ (ABC) board of directors at its meeting held on March 10-12. (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

Newspapers

Other Developments


BUSINESS PUBLICATIONS

Paragraph 3B Reporting Streamlined
Unanimous Consent – Effective March 15, 2010, for June 2010 Statements
The board gave unanimous approval to streamline Paragraph 3B Age of Source of ABC’s business publication reports by eliminating the requirement to report detailed source of data information, such as written, telecommunication, Internet or e-mail. Beginning with June 2010 statements, publishers will simply report a total for each non-paid circulation source.

To accomplish this, the board modified Rule D 5.3 Age of Source.



CONSUMER MAGAZINES

Board Revises Replica Digital Edition Guidelines to Accommodate New Technologies
Unanimous Consent – Effective March 15, 2010
Recent technological advances, including a variety of e-reader devices, have made it possible for consumer magazines to publish digital editions that include the print copy’s full editorial and advertising content while presenting the information in a format better suited for the specific distribution device and providing additional features that enhance the digital edition.

In light of these developments, the ABC board agreed to modify the definition of a replica digital edition to state that it must include the print edition’s full editorial and advertising content but can be reformatted to accommodate different delivery devices. The full editorial and advertising content must still be presented in a manner consistent with the print edition.

Magazine publishers interested in reporting replica digital editions that are displayed in a different format than the print edition can review the complete guidelines on ABC’s website. Members are also encouraged to contact their ABC Publisher Relations manager for a free and confidential evaluation.

The ABC board also clarified several other open issues surrounding the qualification and reporting of digital editions:

  • Advertiser Opt-Out – If an advertiser elects to opt-out of advertising in a replica digital edition, the magazine can replace that advertisement with another advertisement and still qualify and report the digital circulation as a replica.
  • Additional Advertising – If a consumer magazine is able to secure additional or enhanced advertising, above and beyond what was included in the print edition, the magazine may include that advertising in the digital edition and still qualify and report it as a replica.
  • Photo Replacement – If a consumer magazine uses an editorial photo in the print edition but, for whatever reason, is not able to use that photo in the digital edition, the magazine cannot qualify and report the digital circulation as replica. It may be qualified and reported as digital non-replica circulation.
  • Back Copies – The board affirmed that consumer magazines cannot serve back copies in the digital environment and qualify that circulation as paid or verified circulation on ABC statements.

The board also directed ABC’s magazine advisory committees to reconsider the classification and reporting of digital non-replica editions to include this circulation in the magazine’s total paid and verified circulation sum. Currently, digital non-replica copies are reported outside of the magazine’s aggregate total paid and verified circulation. This change in the board’s position reflects the growing interest many magazines are displaying in the myriad of e-reader and mobile platforms.

Scan-Based Trading Task Force Continues Work
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, including the lack of issue-by-issue data from many scan-based systems and “shrink”—the difference between the sales calculated from the physical inventory and copies listed as sold in the scan system. All parties are working toward an industry resolution and intend to present a recommendation to the ABC board later this year.



NEWSPAPERS

Revised U.S. Newspaper Report Formats Approved for Oct. 1, 2010
First Passage – Effective Oct. 1, 2010
For the past year, a strategic task force comprised of U.S. newspaper publishing and advertising executives has examined newspapers’ evolving publishing plans and the best way to qualify and report circulation generated by print/digital hybrids, targeted niche publications, e-readers and mobile platforms.

At this meeting the ABC board of directors agreed to adopt the NAA/ABC Vision Committee’s recommended Publisher’s Statement and FAS-FAX prototypes.

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 electronic 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 prototype will include additional columns with information on electronic 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 Also Approves New Guidelines for Print/Digital Hybrid and Bundled Subscriptions
First Passage – Effective Oct. 1, 2010
The ABC board also agreed to new standards for qualifying and reporting print/digital hybrid and bundled subscriptions when the subscriber does not pay an incremental amount for each additional distribution method.

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.

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 electronic edition, access to the newspaper’s mobile app or access to the newspaper’s e-reader edition.

Under the new U.S. qualification standards beginning Oct. 1, 2010, newspaper subscribers who do not pay an incremental amount for each additional distribution method will be qualified and reported in two categories:

  1. Register and Activate (Verified Circulation)
    In the first category, subscribers are required to register and activate the electronic edition component 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 electronic edition as verified circulation. Similar measures would need to be taken for mobile apps and e-reader editions.
  2. Register, Activate and Fulfill (Paid Circulation)
    The second category goes further to require that a subscriber’s electronic edition must also be fulfilled, i.e., opened or accessed, if a newspaper wishes to claim that circulation as paid on ABC reports. The ABC board will determine the requirements for the fulfillment component at its July 2010 meeting.

ABC Board Agrees to Conduct an Advisory Vote of Newspaper Members Regarding Membership Eligibility Requirements
For Information
At the direction of an ABC board buyer task force, ABC recently conducted an online survey of its buyer members to gauge their interest in ABC audits of non-paid and TMC products. More than 90 percent of respondents agreed that it was in the industry’s best interest to independently verify the circulation of non-paid or freely distributed newspapers.

At its meeting, the ABC board of directors agreed to initiate a newspaper member advisory vote to evaluate ABC’s membership eligibility rules to lower or eliminate the current requirement that newspapers must have at least 70 percent of their total circulation as paid. The results of the nonbinding vote will be considered at ABC’s July board meeting.

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.

Newspaper CMR Requirements Amended to Allow Co-Branded TMC Products
For Information – Effective March 15, 2010
For the purposes of a Consolidated Media Report, the board agreed to allow U.S. newspapers to report the circulation of co-branded TMC products if the newspaper has an operational interest in it.



OTHER DEVELOPMENTS

New U.S. Newspaper Director Appointed
For Information
Todd H. Larsen, president, Dow Jones & Company, was appointed to the ABC board of directors. Larsen’s director seat represents U.S. daily newspapers at large.

Bylaws Modified to Give Media Committees More Oversight
Unanimous Consent – Effective March 10, 2010
The ABC board of directors agreed to make several changes to the way it reviews division-specific rules, report formats and exception requests. The board’s media committees will now handle the majority of these items. To accommodate this change in board structure, the directors approved edits to the following bylaws: Bylaw 2.6 Application for Membership—All, Bylaw 4.5 Meetings, Quorum, Attendance, Bylaw 9.1 Publisher, Bylaw 10.1 To Bylaws and Rules and Bylaw 10.3 Vote Required.