Home > Virtual Pressroom > Board Actions > November 2005 >

Virtual Pressroom
Board Actions

Summary of November 2005 ABC Board Actions

Schaumburg, Ill. (November 7, 2005) – The following are highlights of the actions taken by the Audit Bureau of Circulations’ (ABC) board of directors at its meeting Nov. 2-4, 2005. (Note: The full update to ABC’s bylaws and rules is regularly made available at www.accessabc.com within weeks following each board meeting.)

Consumer Magazines

Final passage and unanimous consent, effective for June 2006 Publisher’s Statements

The board gave final passage to the new Publisher’s Statement format and unanimous consent to a streamlined Paragraph 8C, Channel Reporting. As reported in July, the new Publisher’s Statement format reflects the following changes:

1. Streamlining of paragraph 1 data to reflect reporting of average paid and verified circulation with rate base comparisons.
2. Merging of price data into a single paragraph.
3. Eliminating the reporting of subscriptions sold at less than 35 percent of average price.
4. Creating a new paragraph 6 to report detailed analysis of subcategory average circulation.
5. Eliminating the map in the geographic analysis section and reporting state data in alphabetical order.
6. Modification of Paragraph 8C, Channel Reporting.
7. Repositioning of other data paragraphs within the statement to aid flow of information.

The board unanimously agreed to create a new category of circulation described as “verified,” consisting of public place and copies for individual use, not subject to “paid” qualification requirements.

Qualification requirements for verified circulation are described as follows:

1. For public place waiting room locations: No more than three copies of any singular magazine can be served to a public place location. Annually, each public place location is required to indicate its agreement to receive publications for use in its waiting rooms through a notice that allows the location to opt-out.
2. For delivery to hotels: Distribution is limited to a maximum copy count of two copies per hotel room within each establishment for a monthly or less frequently published publication. For a weekly publication, a limit of one copy per hotel room within the establishment can be served. The publisher or its agent is required to obtain, from senior management of each hotel establishment, a signed contract for delivery that includes (1) an agreed-upon number of copies to be delivered by issue, (2) statement of the number of hotel rooms in the establishment and (3) a confirmation by hotel management specifying the location within the hotel for the placement of copies. Also, delivery contracts are required to be renewed and updated annually.
3. Copies delivered to consumers for individual use: These are limited to one copy and require that an opportunity for the consumer to opt-out be offered annually to stop service within three months of the beginning of the delivery.

Additionally, the primary rate base (if any is reported) will be displayed in Paragraph 1 of ABC reports, next to the line denoting total circulation. Total circulation will represent the sum of total average paid and verified circulation. In situations where a publisher elects to make a rate base claim for a segment of circulation, such as paid only or verified only, the explanatory paragraph may be used to disclose this additional information.

Pending:

Finalization of rules to support the above-mentioned changes, standardization of Paragraph 6A and 6B, as well as a coinciding FAS-FAX report format, will be considered at the ABC board’s March 2006 meeting.

Effective November 7, 2005

The board also modified the application of Rule F 2.1 Sponsored Sales so that eligible sponsors can be any business or organization where the primary activity is to sell or provide services or products to consumers. This interpretation allows organizations such as charities, web sites, local governments and schools to be eligible sponsors.

First passage, effective March 2006 (pending approval at March 2006 board meeting)

The board agreed to modify Rule F 10.1 Separate Editions to define a separate edition as one that is consistent with the primary publication in its editorial content and the publication’s main identity.

Currently, the qualification of a separate edition is that it must carry the identification of the core product within the publication. Historically, a separate edition has not been qualified based on its editorial content.

For example, the new rule modification would require that a magazine’s identity on its cover be represented in the same format and manner for all editions claimed for the same publication. Also, the editorial content would have to reflect a consistent identity with that of the main magazine being represented.

For information

The board reviewed a request from Time Inc. to allow consumer magazine publishers the option to report “verified” circulation on the December 2005 Publisher’s Statement, six months earlier than required. The board recommended instead that publishers wishing to report “verified” public-place and individual-use circulation for the December period do so via ABC’s Statement Plus document. More information about ABC’s Statement Plus report is available at http://www.accessabc.com/resources/c_spguidelines.htm.

Newspapers

Unanimous consent, effective November 7, 2005

Similar to the criteria used for periodicals, the board also reinforced a “net of all considerations” qualification (as it applies to Rule C 1.1 Paid Circulation Defined) for newspaper paid circulation including third-party sales.

“Net of all considerations” simply means that the aggregate of any fees, credits or allowances, such as marketing and distribution fees, paid by the publisher must be less than the qualifying payment they receive from the sponsor for the newspaper copies.

Effective November 7, 2005

The ABC board reviewed barter payment standards and voted to revert to pre-July 2005 barter qualification standards when evaluating new programs through April 1, 2006, and qualifying related copies served through Oct. 1, 2006. Instead of the “green stamp” or “catalog” model that was approved in July, the board has opted to revert to previous guidelines.

An update regarding barter payment standards, under “Third Party Sale Guidelines and Rules” will be available soon on ABC’s Web site at http://www.accessabc.com/newspapers/n_boardupdates.htm.

Barter standards will be further reviewed and considered by the ABC board in March 2006.

Effective November 7, 2005

The board also voted to permanently extend the 15 percent false-negative tolerance applicable to third-party home-delivered copies.

Effective November 7, 2005

The board also agreed to establish the Canadian Newspaper Advisory Committee representing Canadian buyers and sellers of newspaper media. The committee will consist of both publisher and advertiser members who will advise ABC’s Canadian Committee of member concerns, as well as vet new programs and rule changes under consideration.

Effective January 1,2006

The ABC board voted to launch a new insert verification service beginning in January 2006. The service will be optional to ABC newspaper publisher members. Specific business rules and a prototype for the new service will be available on ABC’s Web site soon.

First passage, effective April 1, 2006

The board modified Rule C 5.5 Newspapers Distributed Together so that newspapers would be limited to adding no more than two days of additional service under a Joint Distribution Agreement (JDA).

Business/Farm

Unanimous consent, effective November 7, 2005

The board voted to modify Rule D 7.3 Collection Stimulants to allow inducements to be offered in exchange for prompt payment or for providing demographic information. Also modified was Rule D 1.1 Paid Circulation Defined, to reflect the long-standing practice of processing expired subscriptions at the end of the month. The additional copies served between the actual expire and the end of the month qualify as paid circulation. This would apply to publications that are published on a weekly or bi-weekly frequency.

Other developments

ABC is launching a new Reader Profile FAS-FAX report starting with the March 2006 reporting period. This report would offer verified readership and audited circulation information for participating newspapers in a top-line report.

The board approved an incremental increase in licensing fees for “eFAS-FAX Newspaper,” the online version of newspaper FAS-FAX. The fees contribute to the enhancement of the product as it offers additional breakouts of top-line circulation data for users’ analyses. New columns to be represented include those for day-of-week reporting expansions, core, electronic and unique edition, other paid circulation breakouts, and a new breakout for reporting returns.

Also of note, ABC’s 2005 Annual Meeting has been rescheduled for Dec. 12 at the Yale Club in New York City. More details will be available on ABC’s Web site as they become available.