BUSINESS PUBLICATIONS

First Passage
The ABC board gave initial approval to eliminate Rule D 2.8 Subscriptions Sold with Other Publisher Goods/Services. The proposed change would disqualify all subscriptions sold on a non-deductible basis with a publisher’s other goods or services. The rule change will affect all copies served after Dec. 31, 2008.

Unanimous Consent—Effective Nov. 12, 2007
The board voted to modify Rule D 10.3 Digital Versions and Digital Editions to specify that digital copies identified as “bouncebacks” must meet all other qualification circulation criteria, including minimum consecutive service, in order to be counted as qualified circulation.

CONSUMER MAGAZINES

Unanimous Consent—Effective Nov. 12, 2007
The board voted to modify Rule F 15.1 Verified Circulation to increase the number of allowable copies distributed in hotel guest rooms to a maximum of four copies per issue, per room for magazines published monthly or less frequently. The previous limit was two. For magazines published more frequently than monthly, the maximum remains one copy per issue, per room.

***(See update below) The board also agreed to create a new set of standards within the verified circulation category to govern the distribution of consumer magazines to airlines. Publishers may now distribute up to two copies per flight, based on the daily average per month of flights. At the airline’s choosing, the magazines may be distributed on board the aircraft or at limited access airport clubs.

For the airline copies, as has been the case with hotels, publishers will need to demonstrate that a contract is in place with the airline that specifies the following through an affidavit:

• The distribution location
• The title of the publication requested
• The number of copies requested for each publication

***Updated Standards for Verified Airline Copies (effective Dec. 4, 2007)***

Following the November 2007 board meeting, a special subcommittee of the ABC board clarified the standards that were announced for verified copies distributed to airlines. Below are the updated standards that will be applied by ABC staff pending a vote by the full board at its March 2008 meeting. The previously announced standards have been superceded by the standards approved by the subcommittee.

Publishers may distribute up to two copies per flight, per issue based on the total number of monthly flights for an airline. A maximum of 8,000 copies per airline, per issue may be claimed as verified. These copies may be distributed on board the aircraft or at limited access airline clubs.

The following are examples of calculations to determine the number of allowable verified airline copies:

Example A:
Airline XYZ conducts 100 flights per day for the month of June.

• 100 x 30 (the number of flights per day multiplied by the number of days in the month of June)
• 3,000 x 2 (the number of flights per month multiplied by two, the number of copies that may be distributed per issue, per flight)
• = 6,000 (this is the maximum number of copies per issue, per magazine that can be distributed to Airline XYZ)

Since 6,000 is less than the 8,000-copy maximum, the total number of verified copies that may be distributed to Airline XYZ for the month of June is 6,000 per issue, per magazine.

Example B:
Airline JKL conducts 300 flights per day for the month of June.

• 300 x 30 (the number of flights per day multiplied by the number of days in the month of June)
• 9,000 x 2 (the number of flights per month multiplied by two, the number of copies that may be distributed per issue, per flight)
• = 18,000 (the maximum number of copies that may be distributed to airline is 8,000 per issue, per magazine)

Since 18,000 is more than the 8,000-copy maximum, the total number of verified copies that may be distributed to Airline JKL for the month of June is 8,000 per issue, per magazine.

ABC staff will apply these revised standards pending formal approval by the full ABC board at its March 2008 meeting. For all airline copies, the publisher must continue to demonstrate that a contract is in place with the airline that specifies the following through an affidavit: distribution location, title of the publication requested and number of copies requested for each publication.

NEWSPAPERS

For Information
The ABC board endorsed a set of strategic recommendations for U.S. newspapers that aim to provide advertisers with more useful information, streamline the ABC audit process, simplify reports, and create more straightforward, intuitive circulation-qualification standards. The pending changes reflect the collaborative recommendations of the NAA/ABC Qualification and Reporting Task Force representing nearly two-dozen newspaper and advertising executives.

While specific rules and implementation details will be further defined at the March 2008 meeting, the board did endorse several high-level recommendations. It is expected that these changes will be phased in over the next three years in the U.S., including:

• Revise the definition of paid circulation so that it is more straightforward and clearly represents payment by an individual reader or specialized distribution channel. Paid circulation will continue to be reported separately on ABC Publisher’s Statements and Audit Reports.
• Adopt a paid/verified reporting model where “other paid circulation” (such as third-party sales and copies distributed to schools and newspaper employees) will be reported in a newly established “verified” category and not as part of paid circulation.
• Implement a flexible pricing model where a newspaper copy will be considered paid by ABC regardless of the price for which a copy is sold. This is similar to the pricing models currently in use by ABC’s periodical and Canadian newspaper members.
• Reclassify copies distributed at hotels and subscriptions purchased by businesses for a group of employees to a new paid-circulation category.
• Modify ABC Publisher’s Statement and Audit Reports to provide a summary of total average circulation (both paid and verified copies) and a list of copies by distribution channel.
• The board also deferred action on Rule C 5.13 Subscription Offer Based on Acceptance Unless Declined. Instead of granting final passage to the modifications originally made in November 2006, the board will further review the rule as part of the aforementioned Qualification and Reporting Task Force recommendations for consideration at the March 2008 meeting. The board will seek to modify the rule to allow newspapers more flexibility to convert current home subscribers to a greater frequency.

The board will also consider the above strategic changes for adoption in the Canadian market after review and input from ABC’s Canadian membership.

For Information
The board endorsed a new circulation-forecasting tool that will assist newspaper advertisers in the media planning process. The tool will be especially helpful to insert advertisers by allowing them to better gauge distribution projections in advance of actually producing and printing the inserts. Hosted by ABC as a centralized database, the forecasting tool is expected to be available in early 2008.

OTHER DEVELOPMENTS

The following individuals were elected to the ABC board and will serve two-year terms (unless otherwise noted):

U.S. Advertiser Division

• Brett N. Dennis, T-Mobile
• Vikki Schwartzman, L’Oreal USA
• Craig M. Sinclair, Walgreen Co.
• Patricia Wilkinson, The Home Depot

U.S. Advertising Division

• Alec Gerster, Initiative Worldwide
• Robin Steinberg, MediaVest USA
• David R. Verklin, Aegis Media Americas
  
  One-year term:
  • Lannie Dawson, Martin|Williams Advertising

U.S. Business Publication Division

• James H. (Jay) McGraw, The McGraw-Hill Companies
  
  One-year term:
  • Rob Fisher, American City Business Journals

Canadian Group

• Canadian Advertising Agency: Robert Troutbeck, Troutbeck-Chernoff
• Canadian Periodicals: Brian Segal, Rogers Media

U.S. Farm Division

• Gary L. Vorpahl, W.D. Hoard & Sons Company

U.S. Magazine Division

• John H. (Jack) Griffin, Meredith Corporation
• John Squires, Time Inc.

U.S. Daily Newspaper Division

• Robert W. Althaus, Gannet Co. Inc. (Class 6—Daily newspapers having from 25,000 to 100,000 net paid circulation published in the United States.)
• Steven B. Rossi, MediaNews Group Inc. (Class 7—Daily newspapers having less than 25,000 net paid circulation published in the United States.)
• Howard G. Sutton, The Providence Journal Company (Class 5—Daily newspapers having from 100,000 to 250,000 net paid circulation published in the United States.)

U.S. Weekly Newspaper Division

• Kirk Davis, GateHouse Media New England (Class 8—All weekly newspapers [newspapers published less than four times a week])

ABC Board Officers (one-year terms)

• Chairman—Donald J. Miceli, Kraft Foods
• Vice Chairs—Merle K. Davidson, J.C. Penney Corporation Inc.; Alec Gerster, Initiative Worldwide; David W. Leckey, American Media Inc.; Brian Segal, Rogers Media
• Secretary—Craig M. Sinclair, Walgreen Co.
• Treasurer—John Squires, Time Inc.