Clarification from ABC on Counting Electronic Circulation

The Audit Bureau of Circulations (ABC) issued clarifications explaining how electronic subscriptions are counted towards paid circulation. The basic rule was that any electronic edition of the newspaper, be it Web site or e-mail news service, that charged a minimum of 25 percent of the basic rate charged for the home-delivered print edition could be counted towards paid circulation. These clarifications seemed pretty straightforward, but like all good clarifications, further clarifications are in order.

An issue of clarification is the interplay that these rules are affected by the definition of a "premium" for auditing purposes. For example, if a newspaper charges for access to its Web site, but gives free access to print subscribers, would the value of the free access be calculated into the price of the paid circulation for determining the minimum price to charge for the electronic subscription? The answer to this question is no, if the free access is not a "premium."

Free access for print subscribers to a paid online edition is not considered to be a "premium" if three conditions are met. First, the Web site must come from the same editorial "home" as the printed version. Second, access to the online edition should be in the form of an e-mailed newsletter or online service, such as placed on the World Wide Web CD-ROMs of the newspaper are not qualifying exceptions. Third, publishers must properly disclose these offering on their statements to ABC.

The rationale behind this approach is that a newspaper’s electronic edition is either paid circulation or an inducement for readers to purchase the print edition, but not both.

An important point to note is that this analysis is due to a temporary exception to the definition of "premium" under ABC rules. It is possible for this exception to lapse in 2003.

Another important change in ABC’s interpretation of its rules affects electronic subscription reporting.

ABC’s definition of "paid circulation" permits newspaper publishers to report CD-ROM and e-mail edition circulation to educational institutions based upon the number of user licenses sold, not the actual number of "copies" distributed. To qualify as circulation, the licenses must be sold for no less than the 25-percent rate described above and the sales must be adequately documented and reported to ABC.

New ABC policies also permit newspapers that distribute their electronic editions to schools as part of their Newspaper in Education programs in the form of e-mail or CD-ROMs to count students as paid circulation if a minimum of 30 students pay at least the 25-percent minimum rate as described above.

Newspapers are advised to contact their ABC representative to discuss how these clarifications make an impact on their reporting.

Germick is director of new business development for the Pennsylvania Newspaper Association. Reprinted from View Source.