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ABC's Circ For Tomorrow

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Magazine publishers and media buyers last week roundly applauded the March 10 vote by the Audit Bureau of Circulations board to radically alter the rules governing how paid circ is measured and reported in publishers' biannual statements. Still, some lingering concerns remain.

While a major hurdle--the amount of disclosure required for discounted subscriptions--was finally addressed, the ABC recommendations would add another layer of complexity to publishers' "pink sheets." And as publishers cheer the move to eliminate the 50-percent-of-basic requirement (which qualified only those subs sold for at least half the basic price), advertisers will be scrutinizing statements to see if publishers have pumped up their circ with cheap subs.

"We got change and flexibility, but we also have a more complex statement now because we didn't delete anything--we added," says Time Inc. chairman/CEO Don Logan, a proponent of simplifying ABC's rules. "Everyone had to compromise. I guess it's a good trade-off. We'll see if it works."

Under the new guidelines, for the first time since the inception of ABC in 1914, paid circulation will be defined as "paid at any price." No longer will it be necessary for subscriptions to be valued at 50 percent of the basic cost in order to be qualified.

And as a concession to advertisers concerned about the quality of those lower-priced subscriptions, publishers for the first time will have to report their magazines' "net average" price, which will deduct the cost of promotions, as well as itemize how many copies were sold through marketing partnerships. Those subscriptions sold below 35 percent of the average price will be broken down in the statement by price points and unit sales.

The ABC board is slated to take a final vote on the rules in mid-July; approval is expected. The regulations could go into effect as soon as the six-month reporting period that ends on Dec. 31 of this year.

Media buyers will be closely eyeing the new ABC statements. "If all of a sudden a magazine's circulation goes up by a bump, and they take a similar bump in [ad] rate[s], we're going to have to find ways to dilute that," says Paula Brooks, managing partner and media services director at Margeotes/Fertitta & Partners.

The ABC board also voted to make changes in its newspaper guidelines. Under the new rules, which take effect April 1, newspaper publishers can count as paid circulation all copies sold for at least 25 percent of its basic price, as opposed to the current cutoff of 50 percent. "The media landscape has changed significantly in the last several years," notes Michael Lavery, ABC president and managing director on all the rule changes. "Advertisers are evaluating media on the basis of their performance, and so the issue of 'wantedness,' as defined historically by 50 percent of [the] basic [price], appropriately was reevaluated."