ABC rules to curb paper price war

In 1991, the rules governing newspaper circulation figures were contained on just two sides of A4 paper. Any observer of the UK newspaper marketing and price wars in the past four years will not be surprised that new rules, drawn up last week, run to 38 pages.

Legal battles over subscription copies, voucher schemes, the issue of including discounted sales and the validity of bulk sales claims are among the reasons that the rules – drawn up by the Audit Bureau of Circulations in consultation with the Institute of Practitioners in Advertising and the Newspaper Publishers Association – have been made more comprehensive.

The new ABC national newspaper rules are designed to address the frustrations of advertisers and publishers and provide greater transparency for media buyers. There are rules on full and lesser-rate sales figures, tougher rules on bulk sales and the hardening of exclusion date rules.

The catalyst for change was the legal dispute between the Telegraph group, News International and the ABC. A stop-gap deal to accommodate pre-paid, non-postal subscription schemes was struck in July and opened six months of heated negotiation.

The only frustration for advertisers and buyers will be the decision to ignore demands for the release of daily circulation figures.

“The national newspaper industry already releases data on a more frequent basis from time to time, but there has to be a balance,” says NPA director Steve Oram. “But it would amaze me, if it [daily circulation figures] didn’t arise again.”

The site for that debate will be the small working party which has been set up to continue to oversee the implementation of the ABC rules. Its first meeting is scheduled for the spring.

The group is understood to comprise Tim McCloskey, deputy managing director at BMP Optimum; Theresa Colligan, group director at Zenith Media; Express Newspapers circulation director Don Gray; his counterpart at The Guardian, David Owen; plus two representatives from the ABC.

McCloskey says: “What we have got to do is to look into how much more relevant information we can get to the media buyers. If you ask a media buyer what they want they will say everything, but we must find what is actually needed, what is relevant and what is usable.”

McCloskey believes the changes to the rules will result in a greater transparency of the circulation figures. But ultimately the media buyers remain in the hands of NPA members and their decision to release additional information.

So how do the rules address the problems of lesser-rate sales figures, bulk sales and exclusions?

Price changes are a major issue, with The Times electing this week to cut its Saturday edition to 20p. The amended rules accept that newspapers can charge a different price every single day of the week and that the copies can be claimed as a full-rate sale.

But this is now subject to limitations. The reduction in price must run for two complete ABC audit periods – one period lasts for four-to-five weeks – before it can be claimed at full rate. The old rules provide for a 28-day period.

Richard Gentle, inspection supervisor at the ABC, says: “The idea is to draw a distinction between what is a short-term promotion and what is a change of price in a new pricing structure. Two complete audit periods will mean a minimum of eight weeks, and possibly as many as 13 weeks, before it [a change] can be included as the full rate.”

The issue of including bulk sales in ABCs is also being addressed. Between now and March 30, when the new rules come into force, publishers are to rewrite every single contract they have for bulk sales to incorporate new provisions on “footfall” for every flight or event where the copies are distributed.

This means customers will have to agree to supply the publishers with the number of people who could have received a copy (“footfall”) by, for example, catching the flight or attending the event. Where the “footfall” figure is not supplied those copies will be barred from the ABC figures. Where those statistics are supplied, circulation figures will be adjusted accordingly. It could result in some circulations being disallowed because they can’t be collected, refuse to be collected or because they don’t come in on time.

Rules on exclusions – where publishers claim that distribution has been affected by circumstances outside their control such as an act of God or printer – have also been overhauled.

Publishers now have to show that they have lost ten per cent, as opposed to one per cent, of their planned distribution or net sales by comparing the affected issue with figures from the previous four equivalent issues. “Bad sales dates will not be an excuse of exclusions under the new measures,” says Gentle, who admits the existing rules were abused.

He believes the new rules on bulk sales will inevitably affect circulation figures. Oram agrees and warns that once the figures are published under the new rules it would be like comparing “apples with pears”.

However, Oram argues that the ABC changes will have less of an effect on publishers’ price-led promotions. “I don’t think that the ABC rules will have that much of an effect on pricing levels. I think publishers decide pricing policy on the markets,” he says.

The working party will become the focus of future debate and disputes. It is hoped that it will have a similar effect as those for the magazine and regional newspaper sectors to regulate new types of promotions as they arise. What everyone is anxious to avoid is a repeat of last year’s legal action.

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