PRC OKs Paid Circulation Proposal

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The Postal Rate Commission approved a U.S. Postal Service proposal designed to ease standards covering when a magazine's circulation counts as paid.

The decision, which was filed on Aug. 30, now goes to the USPS Board of Governors for final approval.

The USPS on July 6 proposed that payment of only 30 percent or more of the basic annual subscription price of a magazine - rather than the current 50 percent or more - is required in order for a subscription to qualify as a legitimate paid subscription.

If a periodical has 100,000 subscribers, charges a basic annual subscription rate of $40, and meets all other requirements, a nominal subscription rate under current terms would be less than $20 -- therefore, to satisfy the current paid circulation test at least 50 percent of the copies would have to be sent to people who have paid at least $20 for a subscription.

Under the recommended change, the nominal rate would be one that is less than $12--therefore, at least 50 percent of copies would have to be sent to people who have paid at least $12 for a subscription.

The proposal affects the definition of a nominal rate subscription but does not alter a requirement that at least 50 percent of a publication's copies be distributed to people who paid more than a nominal rate.

The change would let publishers take advantage of the elimination of a similar nominal rate definition in the bylaws of national audit bureaus that was designed to offset subscription losses from sweepstakes legislation, the USPS said.

These Audit Bureau of Circulations and BPA Worldwide rule changes abolished the "50 percent" rule holding that no copy sold at less than half the basic price could be counted as paid circulation, regardless of the USPS rule. As a result of the changes, which took place in 2001 and 2000 respectively, copies can be sold at any price as paid circulation, but publishers must make greater disclosures of how much money is being charged for subscriptions.

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