C 5.1 Premium Defined

(a) Premiums are anything offered to a subscriber at time of solicitation, in addition to regular issues of the publication itself. Any presentation to current subscribers which, in the opinion of the managing director, implies future receipt of such extraneous things in conjunction with continued (or future) subscriptions will cause renewal subscriptions to be judged as premium induced.

Premiums are anything except:

(1) Complete issues of newspapers or periodicals sent to all subscribers for the period included in the offer. Electronic edition issues provided to all print subscribers for the period included in the offer wherein only the print edition subscription is to be reported as paid circulation.

(2) 'Door Openers' defined as anything sent free by mail with subscription offer or provided by solicitor at the time of solicitation that has been reprinted from or is printed material directly related to the publication making the subscription offer and the value of which does not exceed 50 cents as determined by procedure outlined in C 5.2(a).

(3) Offers of sample merchandise to subscribers in connection with subscription offers in which the ordering and receipt of the sample product is not contingent upon ordering subscription(s).

(4) Merchandise offered to current paid subscribers as an inducement to convert payment methodology on future subscriptions. Such offers are to be made separate from subscription renewal efforts and are limited to inducements to subscribers to agree to ongoing (til forbid) continuous service which may include automatic billing process and/or debits to authorize credit card accounts.

(5) Electronic editions of newspapers, regardless of whether they are priced and/or otherwise reported as paid circulation.

(6) Programs providing subscribers exclusive access to functions or activities created by the publisher that are not also available for sale to the general public, but are offered for sale, at an incremental cost, to existing subscribers, subsequent to the purchase of their subscription.

(7) Free or discounted access to archive or back content of the publication included as part of the subscription to the publication.

(8) Free or discounted access to online content or an electronic edition from the same editorial home as the publication included as part of the subscription to the publication.

(9) Subscriber reward programs are designed to promote brand loyalty by demonstrating appreciation to subscribers and Web visitors, and provide added value for a newspaper’s advertisers. Subscriber reward programs will not be classified as a subscription premium if the following requirements are met:

(a) Enrollment Process—the subscriber reward program must include an enrollment process initiated by the subscriber or consumer. Automatic enrollment is not permitted. The newspaper may designate who is eligible for program membership and at what membership level.

(b) Rewards may take two forms:

(1) The newspaper may reward subscribers with merchandise or points redeemable for merchandise; however, i) the reward may not be converted to cash and/or accepted as payment for a subscription by the newspaper, and ii) retail value of a new subscriber’s merchandise reward may not exceed the new subscriber’s subscription price during the first 90 days of the subscription.

(2) Advertisers may participate in the subscriber reward program by offering rewards designed to build reach, good will and increased consumer business for the advertiser.

(c) The subscriber reward program may contain benefits such as editorial content generated by the newspaper and other publications; community calendars; or access to newspaper-sponsored events and services. [Access to paid print or paid electronic editions of other publications is not considered eligible and would be governed by the combination sales rule.]

(b) If a back copy, either whole or part, is included in a subscription offer, the back copy shall be considered a premium, unless the subscription is taken on a retroactive basis in accord with the Bureau's back copy rule and the date of the back copy is such that it would have been included in the subscription even though not mentioned specifically in the offer.

(c) Periodicals and newspapers offered in combination sales shall not be considered premiums but shall be reported in a special paragraph devoted to combination sales prices.

(d) Any publication, the contents of which consist chiefly of data for reference rather than for general reading, shall not be considered a "periodical" for the purpose of the exception noted in Paragraph (a) of this section but shall, when sold with another publication, be considered as a premium. Any publication, regardless of character of content, whose frequency of issue is less than once in three months shall not be considered a "periodical" for the purpose of the exception noted in Paragraph (a) of this section but shall, when sold with another publication, be considered as a premium.

C 5.2 Premiums with Subscriptions/Single Copy Sales

(a) When a premium is used in connection with a subscription or single copy sales offer or implied to current subscribers in conjunction with continued or future subscriptions, the full value of the premium, whether stated or not, must be collected. The value of the premium is considered to be the actual cost to the publisher, or the recognized retail value, or the represented value, whichever is highest.

In those situations where the cost to the publisher is used to calculate the premium value, set-up costs and shipping and handling fees to the publisher from the manufacturer shall not be considered.

C 5.3 Combination Sales

When two or more different publications (newspapers, magazines, business publications, farm publications) are offered for an amount less than the total of the basic prices of all the publications, these sales are defined as “forced” combinations and are subject to the following conditions.

(a) Single Copy Sales
When each of the publications offered in the combination sale intends to qualify the distribution as “paid circulation” it must be made known clearly to the purchaser that each of the publications can be purchased individually at the same price as if purchased as part of the group.

The combination package must be priced so that both of the following guidelines are observed:

(1) Newspapers sold in combination may be included in paid circulation provided that the minimum qualifying price of each publication is collected.

(2) When a combination package is offered on a single-copy basis, three purchase options (“stacks” of publications) must be made available at all retail locations, including vending machines: the combination package itself plus each publication included in the combination package separately. A qualifying purchase price for the combination would be at least the selling price of the highest priced publication plus one cent for the second publication.

Example: The selling price for Publication A is $1.00 and for Publication B is $1.00, the combination price must be at least $1.01.

(b) Subscriptions
The amount paid for all publications involved must be at least one cent for each publication involved in the offer.

(1) Add-On Subscriptions
“Add-on” subscriptions are defined as the addition of a new publication served in conjunction with the consumer’s existing subscription. Both subscriptions offered as a combination package may qualify as paid circulation under the following conditions:

(a) The subscriber must be notified of the new or renewal subscription offer.

(b) The amount of incremental payment or reduction of rate must be clearly disclosed and be at least a qualifying amount as defined by the publication’s Paid Circulation defined rules.

(c) An affirmative act on the part of the subscriber is required and an option must exist to pay an incremental amount for the additional subscription or to take a reduction in the amount paid if the additional subscription offer is declined.

When an option to opt-in/opt-out does not exist, any promotional materials cannot imply or suggest that the “add on” publication is “free," “at no additional cost,” or use of similar language.

To view examples of frequently used offers, consult ABC’s website.

The amount paid for all publications involved must be at least a qualifying amount as defined by the publication’s Paid Circulation Defined rules.

(2) Multiple Subscriptions to One Newspaper
When two or more subscriptions to the same newspaper are offered or sold in one sale, the amount paid by the subscriber must not be less than two cents. In addition, any offer of two or more subscriptions to the same newspaper must include an option to receive only one subscription for less than the multiple subscription price. For example, an offer of two subscriptions for 10 cents must also make one subscription available for nine cents or less.

The rule is not applicable to situations where digital edition issues are provided to print subscribers and only the print edition subscription is to be reported as paid circulation. (See also C 5.10 Subscriptions Involving Digital Editions)

C 5.4 Subscriptions Paid for by Contestant

Subscriptions received in a contest and paid for by the contestant and not by the recipient shall not be recognized as conforming to any of the rules defining a paid subscriber but shall be included in the unpaid distribution and explained in the paragraph of Publisher's Statements and Audit Reports devoted to general explanations.

C 5.5 Contests and Coupons

(a) When a contest for a prize or reward in which the public may participate, is promoted, complete description of the contest or feature shall appear in the Publisher's Statement for the period during which the contest is used and in the Audit Report which includes that period, and each report shall show the total amount of prizes given away in connection with contests during the period covered by the Publisher's Statement or Audit Report.

When, in the judgment of the managing director, such contest is not a circulation inducement for the publication, this rule shall not apply.

(b) Subscriptions to, or copies of, a publication given in redemption of coupons or the equivalent, such as wrappers, box tops, etc., shall be included in paid circulation as Third Party Sales. This rule shall apply whether or not the coupons or equivalent are redeemable in cash.

C 5.6 Subscriptions as Prizes

Subscriptions given as prizes through contests shall not be included in paid circulation. This includes subscriptions offered as premiums at county and state fairs.

C 5.7 Subscriptions Involving Charitable Donations

Circulation obtained through cooperation between a publisher and an organized charity or other organization where the publisher makes a donation in return for and in proportion to the circulation so obtained shall be described and included in the paragraphs of Publisher's Statements and Audit Reports devoted to such sales. In such cases to qualify as paid subscriptions the subscriber must pay not less than one cent, plus the full amount he is informed will be paid to the charity or other organization on his behalf by the publisher.

C 5.8 Subscriptions Paid for by Advertising

Any subscription obtained by one publisher from another and paid for in service by the insertion of an advertisement, may be included as paid circulation, provided proof of the insertion of the advertisement or other documentary evidence is available to establish the validity of such subscription. In these cases the auditor shall explain in the paragraph of the Audit Reports devoted to general explanations that this procedure has been followed by the publisher.

C 5.9 Subscriptions Purchased with Award Points

(a) Subscriptions acquired through the redemption of accrued award credits or loyalty points (e.g., frequent flyer miles, credit card member points) may qualify as paid circulation if the publisher presents satisfactory evidence that the cash value of the redeemed product or service is equivalent to one cent.

These “loyalty programs” require that the participant record a specific volume of transactions to earn sufficient award credit for award points.

(b) Requirements
Sufficient documentation must exist to demonstrate that the program meets the following qualifications:

(1) Program

(a) The enrollment process must include a clear link to the “host” organization.

(b) The participant must take an affirmative action when enrolling in the program.

(c) If points are awarded for enrollment, participants may not initially receive more than 35 percent of the points needed to obtain the least expensive product or service offered in the program.

(d) If an expiration date for points is established, the date must allow for sufficient accumulation of points necessary to redeem the highest valued item prior to expiration.

(e) Each program must have an assigned point value based upon the number of points required to redeem the lowest valued commercially available product (product value divided by assigned points equals per-point value).

(f) Points must be earned as a result of incremental activity or the value of each transaction.

(2) Participant (consumer)

(a) The participant must perform a specific action to earn award points.

(b) The participant must perform a specific action to redeem goods or services.

(c) The participant must know the specific activity required to earn points including the volume of points that can be earned with each activity.

(d) The participant must be able to accrue points for future redemption opportunities.

(e) Participant must have sufficient access to their account status on a regular basis.

(f) There must be proof that proper payment was received from the participant for the redeemed items.

(3) Point Values
Per-point valuation must be established as follows:

(a) All items offered for point redemption must have a stated value in points or dollars.

(b) An option must exist for point redemption for a mixture of publication and non-publication items.
At least 20 percent of all items offered must be non-publication items. For non-publication items, at least 50 percent of them must be commercially available (in the public domain) for consumer purchase.

(c) The value of each commercially available item must be equal to or greater than the average value of all publications included in the offer.

(d) The number of points required for redemption should be an extension of the per-point value calculation (product value divided by assigned points equals per-point value) multiplied by the stated value. This calculation must be consistent for all (publication and non-publication) award items.

(e) The average price calculation formula will be equal to the per-point value multiplied by the number of points required to purchase the subscription.

C 5.10 Subscriptions Involving Digital Editions

The following rule language represents additional qualification standards unique to the utilization of digital editions (platforms). Unless otherwise indicated, these rules are intended to augment, not replace, other core qualification rules governing paid and verified circulation for newspapers)

(a)

(i) Hybrid subscriptions are defined as a subscription contract fulfilled through a combination of print and digital editions (e.g. restricted access website, mobile, e-reader, etc.), with the intent to count only one copy as a paid or verified circulation unit per day. For example, an offer of three days of print plus access to the digital edition for a seven-day-per week newspaper would result in three days per week reported as paid circulation and four days per week reported as paid digital circulation.

(ii) Bundled subscriptions are defined as a subscription contract fulfilled through a combination of print and digital editions (platforms) with the intent to count all copies as paid or verified circulation units. For example, an offer of seven days of print plus access to the digital edition for a seven-day-per week newspaper would result in seven days per week reported as paid print circulation and seven days per week reported as paid digital circulation.

(b) Paid Circulation:

• Incremental Pricing – In all cases where the inclusion of digital editions (platforms) are tied to a print subscription, or when the offer only includes digital editions (platforms), the offer must specify that each subsequent edition (platform) is offered at an incremental price of at least five percent of the offer price for the print-only edition. If there is no print edition, the incremental price requirement must be based on the first digital edition. If all other qualification rules and policies are followed, the distribution of the digital edition may be included in paid circulation provided:
  • The additional charge for digital edition (platform) service includes the option for print-only service or service of only one digital edition at a lesser price. The offer of the print-only or single digital edition must be presented in a clear and conspicuous manner.
  • To verify incremental pricing, publishers must be able to reconcile back to the original offer for the life of the subscription term. If the publisher is unable to do so, qualification as paid will revert to the requirements for no incremental pricing.
• No Incremental Pricing

  1. In all cases where the inclusion of digital editions (platforms) is tied to a print subscription or offered with other digital editions (platforms) but without an incremental pricing element for any of the digital components, the digital edition service may only be reported as paid circulation from the first date of access if the following conditions are met:

  • The subscriber registers and activates the digital service by establishing a user name and password.
  • The subscriber accesses the first digital service at least one time per 30 days; the second digital service (platform), at least weekly; and the third and any subsequent digital edition service (platform) at least daily.

  2.When print is not part of the offer, the publisher has the discretion to identify which digital platforms will be designated as paid without access requirements as well as assigning the first (monthly), second (weekly), and third (daily) qualification criteria.

  • The platform/qualification criteria may differ from subscriber to subscriber.
  • The platform/qualification criteria for each subscriber may differ from month to month.

  As with all other circulation activity, publishers have the responsibility to install and maintain account systems that accurately capture subscriber activity by digital platform, compare that activity to established qualification standards and tabulate qualified circulation units.
  
  Pricing Qualification Standards – All digital offers should have a “definitive” term. Continuous service offers are acceptable (e.g., $X.xx per month/quarter, etc. until forbid).

  • A digital subscription offer without a definitive term will qualify as paid circulation for 30 days.
  • For periods beyond 30 days, the subscription would be subject to ABC’s verified circulation qualification standards, outlined in section (c) of this rule.

• Inducement Limitations – Subscribers of hybrid and bundled offers who have not paid incrementally for the digital edition cannot be offered any extraneous items or merchandise to access the digital service. The publisher may highlight the benefits of digital editions to encourage access.

(c) Verified Circulation:

C 5.11 Vacation Paks

Copies held by the publisher or independent carrier for distribution to a subscriber during the period the subscriber is on vacation may be included in paid circulation subject to the following provisions:

(a) The subscriber specifically orders in advance the copies. The carrier or newspaper should have on file for the auditor's review an order that includes the date of order, the subscriber's name, address and vacation dates.

(b) The subscriber is charged a minimum of one cent for the specific vacation term ordered.

(c) Only copies served to the vacationing subscriber may be included in paid circulation.

(d) The term of the Vacation Pak Plan be limited to four calendar weeks.

(e) Digital editions are not eligible to be used in vacation pak programs.

C 5.12 Single Issue Sales of Back Copies

A newspaper of any frequency is considered a back copy once the subsequent corresponding day's newspaper is made available for sale. Single issue sales of back copies of daily newspapers shall not be recognized as paid circulation in Bureau reports and should therefore be included in unpaid distribution.

C 5.13 Subscription Offer Based on Acceptance Unless Declined

Publishers may modify existing subscriber contracts to add additional days of service without an incremental charge under one of the following circumstances:

(a) Frequency Conversion (“forced”) – Publishers may eliminate an existing frequency and convert all of these subscribers to a new delivery schedule that is universally available to the public. The additional service in such a ‘forced’ conversion can qualify as paid circulation.

Examples of “forced” frequency conversions include the addition of Saturday delivery to Sunday only customers; weekend subscribers to receive Monday copies during football season; Monday thru Friday subscribers to receive Saturday and Sunday copies; the addition of Thanksgiving day copies to Sunday only subscribers, etc.

To qualify for inclusion in paid circulation, copies served under this provision of the rule must adhere to the following criteria:

(1) Starting no later than 30 days prior to the first delivery date incorporating the change in frequency, all promotions / sales materials of the frequency to be discontinued must be converted to include the added delivery. For example, if Sunday only subscribers in Able County are to be converted to Saturday / Sunday subscribers on July 1, all inbound and outbound sales efforts must be modified by June 1 to only “sell / accept” Saturday / Sunday subscriptions (only) for the affected geography.

(2) The discontinued frequency (e.g.. Sunday only) cannot be reinstated within the affected geography for six months after its discontinuance.

(3) All frequency changes must be applicable to a defined geographic area (e.g. cluster of ZIP codes, county / counties, ABC defined market, etc.).

(4) All affected households must receive a clear and conspicuous notice of the change; such notice may be accomplished via an informational note as a ‘topper’ to the newspaper.

(5) No inference should be made to affected subscribers / new subscribers that the change in frequency is temporary.

Digital editions may be included as part of frequency conversion (forced) provided registration and activation has been made.

(b) Frequency Upgrades (“opt-out”) – Publishers may upgrade an existing subscriber to a greater frequency, with the option to opt-out, even while the original frequency remains available in the marketplace. For example, publishers may add Saturday delivery to some current Sunday only subscribers while continuing to sell Sunday only subscriptions).

To qualify for inclusion in paid circulation, copies served under this provision of the rule must adhere to the following criteria:

(1) Affected subscribers must be notified at least one day in advance of the start of the incremental delivery service.

(2) The initial notification must advise of the specific delivery change that is to occur; the term of added delivery; and instructions on how to decline the incremental delivery. This notification must be presented in a clear and conspicuous manner.

(3) The incremental delivery must be for not less than 12 consecutive weeks. The addition of a single day, or other irregular (non-reoccurring) delivery days (such as the addition of Thanksgiving to Sunday only subscribers) is not permitted within this provision of the rule.

(4) If at any point in the first 12 weeks a subscribing household opts-out of the incremental service, all added copies served that were incremental to the original subscription frequency are to be excluded from paid circulation claims.

(5) Publisher's Statements and Audit Reports of newspapers executing these frequency upgrades must explain the details of the upgrades including the impact on average paid circulation.

Digital editions may not be included as part of a frequency conversion unless the offer is an 'opt-in' upgrade. In this instance, the converted subscriber must register and activate the digital subscription.

In all cases where publishers elect to invoke either or both provisions of this rule, advertisers must be notified at least 120 days prior to the implementation of the frequency conversion or upgrade. The notification is to be made through an ABC hosted Website and should include the effective date of change, the projected impact on paid circulation, and the geography to be affected by each program.

C 5.14 Transfers on Consolidation

When two or more newspapers merge, copies of the surviving newspaper served to the subscribers of the merged newspapers may be included in the Bureau reports as paid circulation under the following conditions and with the following qualifications:

(a) The merged newspapers must be homogeneous.

(b) A merger of daily newspapers or other publications with a predominantly local appeal will be recognized under this rule only when the merged publications have been published in the same community.

(c) The number of issues to be credited as paid circulation on an unexpired subscription shall, at the option of the publisher, be ascertained by one of the following methods. The decision shall be subject to approval by the managing director.

(1) By dividing the sum of money still due the subscriber at the basic annual subscription price of the discontinued newspaper by the price per copy of the surviving newspaper, said per copy price to be a pro rata of the basic annual subscription price of the surviving publication.

(2) By counting the number of copies of the discontinued newspaper still due the subscriber and crediting the same number of copies of the substituted newspaper as paid, providing the basic annual subscription price of the discontinued newspaper is at least 50 percent of the basic annual subscription price of the substituted publication or provided that the pro rata single copy price (basic annual subscription price divided by number of copies published annually) of the discontinued newspaper is at least 50 percent of the pro rata single copy price of the continued publication.

(d) Not more than six months may elapse between the cessation of service to the subscriber of the newspaper subscribed for and the beginning of service by the newspaper substituted therefor.

(e) When a merger of newspapers is affected, the first Publisher's Statement thereafter shall contain a consolidated statement of the circulation in the appropriate paragraph(s) but the other analyses in the report shall be made separately on each of the merged newspapers. Analyses of member newspapers involved shall be based upon the latest Bureau reports. Those not previously members of the Bureau shall be analyzed as thoroughly as may be possible under the circumstances and inability to state any specific fact called for by Bureau reports shall be noted with explanation. Separate analyses may be continued thereafter, if, in the judgment of the managing director, such procedure is necessary to give essential information.

(f) In all cases where reported circulation for the merged newspapers includes digital editions served to subscribers, the subscribing household must reafirm by executing a new registration and activation.

C 5.15 Purchase of Subscription List

When a newspaper purchases a subscription list of another newspaper that has ceased or is about to cease publication, the subscribers of the discontinued newspaper served with copies of the going publication may be included in Bureau reports in paid circulation under the following conditions:

(a) The newspapers must be homogeneous.

(b) In the case of daily newspapers, or other publications of predominantly local appeal, both newspapers must have been published in the same DMA or within a 100-mile radius.

(c) The number of issues to be credited as paid circulation on an unexpired subscription shall, at the option of the publisher, be determined by one of the following methods. The decision shall be subject to approval by the managing director.

(1) By dividing the sum of money still due the subscriber at the basic annual subscription price of the discontinued newspaper by the price per copy of the surviving publication, said per copy price to be a pro rata of the basic annual subscription price of the surviving newspaper.

(2) By counting the number of copies of the discontinued newspaper still due the subscriber and crediting the same number of copies of the substituted publication as paid, providing the basic annual subscription price of the discontinued publication is at least 50 percent of the basic annual subscription price of the substituted publication, or provided that the pro rata single copy price (basic annual subscription price divided by number of copies published annually) of the discontinued newspaper is at least 50 percent of the pro rata single copy price of the continued publication.

(d) Not more than six months may elapse between the cessation of service to the subscriber of the newspaper subscribed for and the beginning of service by the newspaper substituted therefor.

(e) Copies served in arrears to subscribers of the purchased newspaper shall not be included in paid circulation.

(f) If the option is given to the subscriber of receiving in cash what is due on the old subscription, but the subscriber chooses to be served instead with copies of the purchasing newspaper and authorization to serve the publication instead of the cash is satisfactorily established in the judgment of the managing director, the subscription shall be counted the same as if the subscriber had subscribed for the purchasing newspaper in the first place, subject to provisions of Paragraph (c) of this rule.

(g) The first Publisher's Statement after the inclusion of the purchased subscription list shall contain a consolidated statement of the circulation in the appropriate paragraph, but the other analyses in the report shall be made separately on each of the newspapers involved. Analyses of member newspapers involved shall be based upon the latest Bureau reports. Those not previously members of the Bureau shall be analyzed as thoroughly as may be possible under the circumstances and inability to state any specific fact called for by Bureau Reports shall be noted with explanation. Separate analyses may be continued thereafter, if, in the judgment of the managing director, such procedure is necessary to give essential information.

(h) Subscribing households that have been receiving digital editions of the discontinued newspaper must go through a registration/access process in order to be reported in the circulation statistics of the purchasing newspaper.

C 5.16 Transfers from One Going Newspaper to Another

When one going newspaper transfers subscriptions to another going newspaper, the subscribers so transferred may be included in Bureau Reports in paid circulation under the following conditions:

(a) The newspapers must be homogeneous.

(b) In the case of daily newspapers or other publications of predominantly local appeal, both publications must have been published in the same community.

(c) The subscriber proposed to be transferred must have had the option of being transferred or remaining on the list of the newspaper subscribed to; or the subscriber must have had the option of receiving in cash what is due on the old subscription or of accepting the substitution of the other newspaper; and authorization by the subscriber in the case of any of these options must be of record.

(d) The number of issues to be credited as paid circulation on an unexpired subscription shall, at the option of the publisher, be determined by one of the following methods. The decision shall be subject to approval by the managing director.

(1) By dividing the sum of money still due the subscribers at the basic annual price of the transferring publication by the price per copy of the publication to which the subscription is transferred, said per copy price in the case of each publication to be a pro rata of the basic annual subscription price.

(2) By counting the number of copies of the transferring newspaper still due the subscriber and crediting the same number of copies of the newspaper to which the subscription is transferred, provided the basic annual subscription price of the transferring publications, is at least 50 percent of the basic annual subscription price of the publication to which the subscription is transferred or provided that the pro rata single copy price (basic annual subscription price divided by number of copies published annually) of the transferring newspaper is at least 50 percent of the pro rata of the newspaper to which the subscription is transferred.

(e) Copies served in arrears to the transferred subscribers shall not be included in paid circulation.

(f) The first Publisher's Statement after the transfer shall contain a consolidated statement of the circulation in the appropriate paragraph but the other analyses in the report shall be made separately on each of the publications involved. Analyses of member publications involved shall be based upon the latest Bureau Reports. Those not previously members of the Bureau shall be analyzed as thoroughly as may be possible under the circumstances and inability to state any specific fact called for by Bureau Reports shall be noted with explanation. Separate analyses may be continued thereafter, if, in the judgment of the managing director, such procedure is necessary to give essential information.

C 5.17 Transfers from Suspended Publication to Others

When the subscribers to a publication which has discontinued issuance are offered a choice from a list of two or more other publications, the subscriptions transferred through exercise of such option may be included as paid circulation by the other publications under the following conditions:

(a) Choice of other publications must be offered within six months after last publication date of publication which has discontinued issuance.

(b) The subscriptions of the discontinued publication must conform fully to all other Bureau regulations.

(c) At least one of the publications offered as a substitute must be homogeneous in editorial content to that of the suspended publication.

(d) The number of issues to be credited as paid circulation on an unexpired subscription shall, at the option of the publisher, be ascertained by one of the following methods. The decision shall be subject to approval by the managing director.

(1) By dividing the sum of money still due the subscriber at the basic annual subscription price of the discontinued publication by the price per copy of the surviving publication, said per copy price to be a pro rata of the basic annual subscription price of the surviving publication.

(2) By counting the number of copies of the discontinued publication still due the subscriber and crediting the same number of copies of the substituted publication as paid, providing the basic annual subscription price of the discontinued publication is at least 25 percent of the basic annual subscription price of the substituted publication, or provided that the pro rata single copy price (basic annual subscription price divided by the number of copies published annually) of the discontinued publication is at least 25 percent of the pro rata single copy price of the continued publication.

(e) Copies served in arrears to subscribers of the suspended publication shall not be included in paid circulation.

(f) If the option is given to the subscriber of receiving in cash what is due on the old subscription but the subscriber chooses to be served instead with copies of the purchasing publication and authorization to serve the publication instead of the cash is satisfactorily established in the judgment of the managing director, the subscription shall be counted the same as if the subscriber had subscribed for the purchasing publication in the first place, subject only to the provisions of Paragraph (d) of this rule.

(g) The first Publisher's Statement which includes the transferred subscriptions as paid circulation shall contain a statement naming the publication from which the subscriptions were transferred, the number of transferred subscriptions received and the basis on which fulfillment to the subscriber has been made. The publisher may, if desired, report the number of copies served on such subscriptions during the period covered by the statement. This explanation shall continue in subsequent Publisher's Statements for such periods in which transferred subscriptions are received. The Bureau reserves the right to require a more detailed explanation than above specified if in the judgment of the managing director such procedure is necessary to give essential information.

C 5.18 Credit Subscriptions

C 5.19 In-House Credits

From time to time retailers and/or civic or social organizations may offer consumers "in-house" credits to be redeemed at the organization's facility (such as credits issued to new members of a museum that are to be redeemed at the museum gift shop). The value of that "in-house" credit may be used toward the purchase of a newspaper subscription under the following conditions:

(a) The credit is part of a presentation made by the retailer, civic or social organization, not the newspaper, or its agents.

(b) The credit has a specific expiration date.

(c) The presentation is made in a manner that provides equal prominence and position for all good(s)/service(s) offered.

(d) The value of the credit is identified in monetary terms to the subscriber and is equal to no less than one cent.

(e) Adequate records regarding the order, transmittal of funds, and manner in which the value of the credit is determined, must be available for the auditor's review.

(f) The transactions are fully explained in the Publisher's Statements and Audit Reports.

C 5.20 Hawker (Street) Sales

(a) Newspapers electing to claim as paid circulation copies of newspapers sold through hawkers (street salespeople) are required to maintain a reporting environment and records that will accurately determine sales from hawkers and support an ABC audit.

(b) Recordkeeping requirements to support hawker sales include, but are not limited to, contemporaneous daily records by hawker, by location, identifying draw, returns, selling times, hawker compensation and cash collections. Records will also be available showing credit and compensation policies for independent distributors involved with hawker distribution.

Note, Audit Implications. The nature, timing and extent of audit procedures to be applied to claimed circulation for hawkers will be based on an assessment of the control environment, structure and reporting, historical results and other relevant conditions. From time-to-time, certain conditions may exist that could necessitate expansion of the audit program. This expansion may include extensive testing and/or direct hawker sales observations. These conditions include, but are not limited to, distributor and hawker pricing structure, sales incentives, return policies and the condition of the records involved. The conditions above would be reviewed by Bureau auditors in order to determine the appropriate audit procedures to be applied.