The board at the Audit Bureau of Circulations agreed in late July to craft rules for a new audit prototype that would substantially change the look and detail of the reports advertisers use to monitor newspaper circulation.
The proposed audit report addresses one longstanding bone in the craw of some newspaper publishers: the rule that to count as paid circulation copies must be sold for at least 50% of the "basic" or standard price set by the newspaper.
A page of the existing prototype divides overall paid circulation, formerly reported as a single number, into numerous categories -- such as copies sold at or above 50% basic price and copies sold between 25% and 50% of basic price.
The proposed audit format also features a detailed breakdown of "third-party" circulation, or copies not directly paid for by the consumer, such as newspapers given away at hotels.
The next procedural hurdles for the new audit format come at the ABC's annual meeting in Toronto Nov. 15-18. Should the board agree to this "first passage," final passage could come in March.
In that case, the changes would go into effect April 1, 2001, and will first be seen on the ABC's statement covering the six-month period ending September 30, 2001. They would mark the first major changes in the 50% rule -- a cornerstone in how paid circulation is determined -- since 1914.
The prototype marks a compromise between publishers advocating "open pricing," in which copies are counted as paid circulation as long as they're not given away free, advertisers who want greater disclosure and publishers who prefer no change at all.
"Any amount of specificity we can evaluate at our own choice is certainly worth pursuing," said Valerie Muller, senior VP-director of print services at MediaCom, New York. "The danger is there are a lot of lazy people on our side of the desk who are not going to take into account" all the nuances of a new circulation report "and a lot of publishers who will take advantage of that."
EXPECTED TO PASS
Two newspaper executives intimately involved with the process said privately that they expect the measure to pass.
"This is moving in the direction towards open pricing. It's just a matter of time," another exec said.
A similar proposal, albeit one based on "open pricing," is under discussion among the ABC's magazine members.
But consensus within the magazine industry may be hard to come by. Unlike local newspapers, magazines typically are national ad vehicles in hotly contested niches.
"Publishers are looking at [proposed changes] tactically and saying, `Does this help me more than my competitor?' " said one magazine circulation executive.
The net result? On this issue, the exec said, magazine publishers "are not ready for prime time."