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ABC Signs Off On New Circulation Rules

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NEW YORK -- The Audit Bureau of Circulations gave final approval to a sweeping overhaul of magazine circulation rules, opening the way for publishers to try new marketing efforts as they confront a steady decline in circulation.

Separately, the group also passed guidelines defining electronic sales of newspapers, allowing publishers to create and sell new, electronic editions of their publications and still have them count as paid circulation.

The revision to the magazine rules, the most far-reaching for that industry since the Audit Bureau was formed in 1914, received initial passage in March. Newspaper circulation rules have also been overhauled, and those changes received final approval in March.

The magazine rule changes were given final approval Saturday, with only minor revisions, at another meeting of the Audit Bureau's board at a resort in Pebble Beach, Calif.

David Leckey, a member of the ABC board and circulation director at Hachette Filipacchi Magazines, said in an interview from the meeting site that the measures were passed unanimously by the board's 34 members, which include publishers of magazines and newspapers, as well as advertisers.

"It's certainly the most significant change I've seen since I've been in the business," Mr. Leckey said. "This was something that no one rushed into. It's been an effort, but it's something that will benefit both publishers and advertisers."

At the heart of the rule changes was the abolition of the "50%" rule, which stated that no copy could be counted as paid circulation that was sold at less than half of the basic price.

Now, copies sold at any price can be counted as paid circulation, but with greater disclosures of how much money is actually being charged for subscriptions. Advertisers want to see that information in order to gauge the level of reader interest in a particular magazine.

Publishers have been seeking greater flexibility in how they discount and promote magazine subscriptions in order to combat a steady erosion in circulation as other media such as cable TV and the Internet compete for readers' attention.

With the ability to price magazines more cheaply, publishers will now be able to try new ways of attracting readers such as giving away subscriptions at little cost with season tickets to sports events or with memberships to health clubs.

For newspapers, which are also facing difficulties in keeping readers, the new guidelines governing electronic editions provide an important basis for reaching out to readers in emerging electronic media.

"This opens a huge window of opportunity for newspapers," said Mary Jacobus, head of the ABC's newspaper committee and publisher of the Duluth News-Tribune of Minnesota. "I think this will be very actionable stuff."

The Audit Bureau has discussed electronic editions in the past, but Ms. Jacobus said the new guidelines set clear definitions of what constituted an electronic edition of a newspapers as well as how they could be sold.

While newspapers are just beginning to experiment with electronic sales models, Michael Lavery, president of the Audit Board, said the new guidelines should open the way for increased use of electronic formats as demand for them begins to swell among readers.

Electronic editions of newspapers will need to be clearly identified as a version of the main paper, but the editorial and advertising can vary, just like in regional editions of newspapers, Mr. Lavery said in an interview from Pebble Beach.

They can be delivered by any electronic means - e-mail, the Web or CD-ROM, for example - and will have to conform to the same rules as print versions in order to be counted as paid circulation, namely, to be sold for at least 25% of the basic price.

Mr. Lavery said magazine publishers were also considering ways to define and sell electronic editions.

Copyright (c) 2001 Dow Jones & Company, Inc.