Magazine Lists Unfazed by New Circulation Rules
Under the ABC rules that took effect last July 1, magazine subscriptions can be sold at any price as paid circulation, but publishers must make greater disclosures of how much money is being charged for subscriptions. Previously, publications sold at less than 50 percent of the basic subscription rate could not be counted as paid circulation.
Though some expected the number of paid subscribers on magazine lists to rise with the addition of low-price subscriber names, that is not the case.
"If you look at the statements that have come out, there's almost no business listed at low prices," said Dan Capell, editor of Capell's Circulation Report. "People may be running some tests here and there but there's no significant volume by any title that I've seen at significantly lower prices."
At least one circulation professional confirmed Capell's assessment.
"We need time to create new programs around the rule changes and test them in an appropriate way," said Ken Godshall, senior vice president of partnership marketing and new business development at Time Inc., New York. "We are attempting to evaluate the potential in each area but wouldn't say that the new rules have had a material impact on circulation results thus far."
Many publishers are working with the ABC to get pricing promotions approved before testing, he said. The rules had not changed for a long time, and mailers want to ensure that test promotions follow the new rules.
A list broker who works with several publishing clients said the new ABC rules have not affected list plans yet.
"In all honesty, it hasn't been an issue on the forefront for my mailers," said Heather Maylander, senior vice president at American List Counsel, Princeton, NJ. "I'm sure it's important to the circ people. It just hasn't been an issue on how we're approaching the list side."
Mailers are still trying to recoup losses from Sept. 11 and deal with the upcoming postal rate increase, she said.
Even so, the new rules eventually might affect list counts and perhaps list pricing.
Though preliminary price tests have not generated significant numbers from a list management perspective, one list professional had ideas about future scenarios.
"It's a little too early to analyze how we're going to price it out but the way I theorize it will be is as a sliding rate structure," said Alan Zamchick, list director at Hachette Filipacchi, New York.
If you have a list that goes for $85 per thousand based on an average subscription price of $16.97 for 12 issues, for example, the base rate might drop to $80/M or $75/M for an offer made at a lower price point.
However, this issue isn't on most list brokers' minds yet.
"List brokers aren't really asking about this," Zamchick said. "I think that the circulation clients will have to bring it to their brokers' and list management professionals' attention."
Still, some brokers probably won't have to deal with it. Maylander said catalog brokers rent few magazine names. And brokers often have other priorities when looking at publishing files, Godshall said.
"I think brokers focus on direct mail-sold subscriptions as well as selectivity, so the newer kinds of circulation aren't really a concern to them yet," Godshall said.