Time Inc., Hachette Will Count Public Copies as Paid Until Summer

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NEW YORK ( -- Magazine publishers, start your cursing. The Audit Bureau of Circulations gave you until next summer to stop classifying the magazines left around beauty salons, airports and doctor’s offices as paid copies, but then American Media had to spoil that grace period last week, unilaterally deciding to adopt the stricter definitions early. Now everyone is looking for others to do the same.

Instead, the biggest publishers are riding out their final months under current rules -- and deepening the well of mistrust among media buyers.

“There’s so much out there about the way publishers are avoiding reporting the true circulation,” said Richard Klein, exec VP, SLG Advertising. “Our job is to make sure that when we run an ad that the ad is being read. With some of the circulation, I feel the ads aren’t read as much as they would be if they were in traditional subscriptions or traditional purchases off the newsstand.”

Public-place skepticism
It was precisely that skepticism about public-place copies and other kinds of sponsored circulation that prompted the Audit Bureau to create a new “verified” category for them, effective in the first half of 2006. But publishers are still preparing reports for the last half of 2005 and could -- as David Pecker’s American Media plans to -- strip public-place copies out of their “paid” totals. Most would rather not.

Time Inc., the country’s largest magazine publisher, mailed a letter to advertisers last week saying it will again use the “paid” category for the second half of last year to include copies that sponsors received but did not pay for. It had actually asked the Audit Bureau to implement the “verified” category for the period, but was rebuffed and will therefore detail the nuances in a supplemental form called the “statement plus.”

“We believe that this approach will meet our commitment to afford advertisers transparency into the nature of our sponsored-sales circulation,” reads the letter, which was signed by John Squires, co-chief operating officer. “Time [Inc.] will report such subscriptions as ‘verified’ as soon as that category becomes available in the publisher’s statements for the period ending June 30, 2006.”

In the same letter to advertisers from Time Inc. last week, the company also said it had wrongly reported 48,442 copies in average paid circulation across eight magazines for the first half of 2005-when in fact the company had paid a distributor to take that many off its hands.

After deducting those copies from the paid totals, Ski and Skiing missed the circulation guarantees they had made to advertisers.

The other affected titles, which still met their guarantees or never made any, are In Style, Money, Real Simple, Time, Motor Boating and Yachting. The company said any similar adjustments for 2004 will show up in pending reports from the Audit Bureau of Circulations.

Time Inc. subpoena
Time Inc. received a federal subpoena last summer that sought information on its circulation practices; the company has said it is cooperating.

Hachette Filipacchi Media U.S., which publishes titles including Elle and Car and Driver, will also wait for the Audit Bureau to adopt the new rule, “as we’re supposed to,” said President-CEO Jack Kliger. Wenner Media will do the same, “as is the industry practice,” a spokesman said.

Rodale, however, is still deciding what to do. Hearst Magazines and Conde Nast Publications representatives declined to discuss the subject.

No effect
Some magazines don’t anticipate being affected. “Maxim, Stuff and Blender don’t have any verified circulation or sponsored public places to report for the second half of 2005,” said Charles Mast, consumer-marketing director for those titles at Dennis Publishing.

Ian Scott, president-CEO, Bauer Advertising Sales, said Bauer Publishing USA has never reported its public-place copies. “It’s something we’ve never believed is right,” he said.

For its part, American Media left six of its magazines short of the “paid” circulation they had guaranteed to advertisers, if only by a few percentage points. Those titles include Shape, which will classify about 34,000 copies as “non-paid” because of the decision, and Star, which will move 29,000 copies to the “non-paid” column.

Larger adjustments
Some magazines will have to make larger adjustments once the new rule takes effect. In its statement on the first half of 2005, for example, Time Inc.’s People en Espanol counted as “paid” 55,455 copies distributed to waiting rooms and offices and another 50,880 distributed free to addresses provided by the U.S. Hispanic Chamber of Commerce. That’s about 23% of its reported paid circulation of 462,099.

Media buyers said they wished that more publishers would adopt the spirit of the rule instead of waiting for its official arrival. “It’s very simple,” said Robin Steinberg, senior VP-director of print investment, MediaVest. “The more transparent and honest they are early on, the better off we are in the long run. We just want to know. We want to know what circulation is acquired how, who’s paying for what and, more importantly, understand the differences.”

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