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By: Lucia Moses


by Lucia Moses

No one disputes that the industry is moving toward readership as a
yardstick. But some executives worry that a proposal to increase the
percentage newspapers can discount their copies and still count them
as paid will undermine the value of paid circulation and favor big

Some say expanding the allowed discount from 50% to 75%, as considered
by Audit Bureau of Circulations (ABC), could unleash predatory pricing
by big metros against small suburban competitors. Proponents believe
changing the 86-year-old rule will give them more marketing flexibility
while giving advertisers the disclosure they seek.

Michael E. Phelps, vice president/sales and marketing for Lee Enterprises
Inc. and a member of a task force that helped formulate the proposed
change, was among those unhappy about the outcome. ‘Clearly, the
regulations favor larger metros and national papers because of their
sheer scale,’ he said.

James W. Hopson, the ABC’s board representative for papers under 15,000 circulation, said doing away with the 50% rule will not only hurt small
papers but also diminish the value of what has been one of the industry’s
key strengths. ‘Paid circulation has continued to be one of our most
meaningful selling points for advertisers,’ said Hopson, who recently ran
Thomson Newspapers’ Ohio group and is now publisher of the Wisconsin State
Journal in Madison.

Matt Spahn, director of media planning and analysis for Sears, Roebuck &
Co. and an ABC board member, dismissed that argument. He said as long as
newspapers disclose what they’re selling papers for, advertisers don’t
mind if they have the ability to discount. ‘What we’re interested in is
degree of wantedness,’ he said. As for worries that small newspapers would
face a competitive disadvantage, he said they can lower their basic price.

Small newspapers can take some comfort in the experience of Canada, where
papers have been allowed to count as paid copies sold for as little as a
penny since 1998, but few have taken advantage of it, said Russ Mills,
publisher of The Ottawa Citizen. One difference: Unlike the United States,
Canada relies more on readership surveys than on circulation, he said.

ABC members still have plenty of time to comment. The board will consider
the proposed changes for first passage at its annual meeting in November
and then for final passage in March, with any changes taking effect as
early as April 1.


Lucia Moses ( is an associate editor for

(c) Copyright 2000, Editor & Publisher

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