BPA Amends Circulation Reporting Rules

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BPA International, the New York-based auditing firm, has announced that it has completed the 18-month process of amending the century-old definition of paid circulation.

The change, effective Jan. 1, would enable publishers to report as paid circulation subscriptions that sell for less than 50 percent of the cover price. The BPA previously followed the 50 percent basic rule, which was established by the U.S. Postal Code almost 120 years ago and stated that no subscription could be reported as paid unless it was sold for at least half its cover price.

The new reporting rules allow publishers to disclose subscription sales at all price points and set different tiers to signify the percentage of cover price charged. The BPA's board of directors enacted the new rules for both consumer magazines and business publications at a special policy meeting Oct. 16, according to the organization.

The change was pushed through as a way to offset an increasingly struggling circulation marketing industry.

"There have been several changes in consumer marketing with respect to consumer magazines in particular," said Glenn J. Hansen, BPA president/CEO. "Publishers can no longer rely upon sweepstakes, clearinghouses and other traditional marketing sources to expand their circulation. BPA believed that we needed to respond to these issues and help our membership keep pace with what was happening in the marketplace."

The catalyst for the change, however, came not from a consumer or trade magazine member, but from one of BPA's Canadian newspaper members, The Toronto Star. In 1999, The Toronto Star successfully lobbied the BPA's Canadian subsidiary to change its definition of paid newspaper circulation from the 50 percent rule to multiple price points. That move, said Richard Murphy, a BPA senior vice president, led the BPA board to instruct the organization to begin a study of the 50 percent rule's impact on print magazine members.

Over a 10-month period, the BPA investigated the matter with its U.S., Canadian and European advisory boards, and "all were unanimously in favor of new rules and reporting format," Murphy said. The key to getting the paid circulation changes approved was finding a balance that allowed for more reporting flexibility without discouraging publishers that still charge 50 percent or higher.

"The ruling adds flexibility to publishers in meeting their rate base," said Michael Goldstein, founder and president of subscription service Magazine-of-the-Month. "However, there is still considerable incentive for publishers to continue to carry higher paying circulation."

Other circulation executives displayed even stronger support for the long-anticipated change.

"For years we've had to say no to many marketing opportunities because of the old rule," said Susan Allyn, associate circulation director at international publisher EMAP Petersen. "Now we have the freedom to extend our print brand to include other products and services without being penalized, as long as we disclose all the information requested by the BPA."

While the changes go into effect at the start of 2001, BPA circulation statements will not showcase the new reporting format until the June 2001 cycle.

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