ABC Board Defers Implementation of ?Hybrid? Subscription Rules

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By: Mark Fitzgerald

Audit Bureau of Circulations’ Newspaper Committee isn’t ready yet to pull the trigger on rule changes for accounting for so-called hybrid subscriptions in which subscribers receive a print newspaper some days and a digital edition on others. The rules, requiring incremental or individual pricing of the digital editions to qualify as paid, were to go into effect Oct. 1, but will be delayed “until additional input is gathered,” ABC said Tuesday.

ABC for now will retain its current standards for U.S. newspaper digital editions, qualifying as “paid” editions that charge at least one cent.

In July, ABC had given tentative approval to rule changes that would require a 5% incremental or itemized pricing model to qualify hybrid and “bundled” subscriptions as paid. If newspapers did not collect the incremental amount for each product in the subscription, they would be allowed to qualify the circulation as paid or verified based on a “progressive register, activate and fulfill model,” ABC said.

In a bundled subscription model, a newspaper offers both a print and digital subscription and intends to count multiple paid circulation units per day.

“The offer of two or more subscriptions to the same newspaper, regardless of delivery format, falls under the qualification standards of the multiple subscription rule and requires newspapers to collect at least one cent per subscription to qualify the circulation as paid,” ABC said.

In its meeting last week, ABC’s Newspaper Committee gave approval to a rule change allowing replica and non-replica digital copies delivered for Newspapers In Education programs or for employee or delivery copies, to be included in verified circulation.

Final approval was given to rules for the new “branded” edition category of circulation, which is defined as “an edition that displays a name different from the ABC member newspaper name on its front page.” One example might be The Dallas Morning News’ “Briefing” newspaper, a digest of content from the newspaper that is delivered to non-subscribers in certain areas.

Here are the rules pertaining to branded newspapers and other announcements from ABC. (More information, including example, is available on ABC’s Website.)

* A branded edition is defined as an edition that displays a name different from the ABC member newspaper name on its front page.
    * A branded edition logotype should be consistent with the member newspaper’s basic logotype on all branded editions and the word “edition” must also be displayed.
    * A branded edition that is published in a different format than that of the member newspaper (broadsheet versus tabloid) will be noted in the explanatory paragraph of ABC reports with an inclusion of the distribution and the average number of copies.
    * A branded edition may be in a foreign language.
    * A branded edition may be distributed in a digital format but it must have a print foundation.
    * A branded edition does not need to be reported separately if the circulation for all branded editions is less than three percent of the newspaper’s total average paid and verified circulation (including branded editions) and less than 2,000 copies per issue. Additionally, newspapers that participate in ABC’s Community Newspaper Audit service are not required to report branded editions separately.
    * A branded edition is subject to review by ABC’s managing director, who may deny or approve a branded edition. The managing director can also require separate reporting of an edition as a branded edition based on subjective factors, including the editorial content of an edition versus the editorial content of the member newspaper.
    * A branded edition’s qualifying circulation is limited to circulation that does not overlap with households subscribing to the member newspaper, meaning only the circulation delivered to households that do not subscribe to the member newspaper will be counted on ABC reports.

The rule also provides the following clarification regarding digital editions:

    * Replica digital editions must be consistent in character and content with the print version of the newspaper. It must include the great majority of the editorial and advertising content that is available in the print edition, but it may include updated news reporting.
    * Non-replica digital edition circulation must also be consistent in character and content as the member newspaper but advertising content may differ. Digital non-replica copies must be reported by platform (e-reader, mobile, website, etc.).
    * All digital edition circulation that is eligible for reporting in the paid or verified circulation categories is limited to restricted access websites and cannot include public access websites.

Final Approval Given to Numerous Other Outstanding U.S. Newspaper Rule Changes
Final Passage – Effective Oct. 1, 2010
The Newspaper Committee voted unanimously to give final approval to numerous outstanding rule changes that were given initial approval in July. All of the rule changes are related to the work and recommendations of the NAA/ABC Vision Committee. Below is a complete summary of the final rule changes:

    * A 1.2 Permissions and Prohibitions – Modify rule to govern publicity issues regarding newspapers comparing like data elements (e.g., paid, verified). Newspapers that want to use data incorporating branded edition circulation must include the circulation data of the branded editions used to arrive at the total average circulation number.
    * C 1.2 Prices – Modify language from electronic editions to digital editions.
    * C 2.1 Circulation Averages – Modify rule to allow for multiple “power days.” Also modify to allow U.S. newspapers to report an executive summary and require sub-paragraph detailed reporting for print, branded, and digital editions. Finally, exempt CNA newspapers from the executive summary disclosure and permit a “total print” number.
    * C 2.2 Morning, Evening, All-Day and Sunday Designations – Eliminate the requirement for newspapers to include a general description of policies on local display, classified and national advertising.
    * C 2.7 Days Omitted from Averages – Allow an edition to be eligible for omission provided that it counts toward the 10 allowable omitted days.
    * C 3.2 Educational Programs — Modify rule to require educational copies to be supported by affidavits and add qualifications for home delivered NIE.
    * C 3.3 Other Verified Distribution – Adds a stipulation requiring advance notification to ABC of all targeted home delivery distribution via the Preprint Projection Center. Allows for digital edition service, if the subscriber accesses the copy. Expands verified distribution to publisher-controlled venues, including honor boxes and ongoing hawker distribution as long as distribution is consistent in volume and location.
    * C 5.3 Combination Sales – Modify rule to allow for digital edition service in Joint Distribution Agreement (JDA) situations, to be based on the requirements of Rule C 5.10 Subscriptions Involving Digital Editions.
    * C 5.11 Vacation Paks – Modify rule to exclude digital editions from vacation paks.
    * C 5.13 Subscription Offer Based on Acceptance Unless Declined – Modify rule to allow digital editions to be used in frequency conversions, based on the qualification standards outlined in C 5.10 Subscriptions Involving Digital Editions.
    * C 5.14 Transfers on Consolidation – Modify rule to require new activation and access when two or more newspapers merge.
    * C 5.15 Purchase of Subscription List – Modify rule to require new activation and access when a newspaper sells its subscriber list to another newspaper.
    * C 7.9 List of ZIP Codes and Towns Receiving 25 or More Copies — Modify rule to require that branded and digital editions be reported separately in this analysis.
    * ABC Policy Regarding the Sale of Carrier-Delivered Circulation and Single-Copy Sales of Newspapers – Modify policy to allow newspaper to qualify digital editions. Only those digital editions accessed by the subscriber will qualify for inclusion on ABC reports.

New Optional Report Format Detailing Total Print Metrics Approved
Unanimous Consent – Effective Oct. 1, 2010
The Newspaper Committee also approved a new optional report format that allows newspapers to separately report total print and digital metrics. A prototype of this report format is available on ABC’s website.

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