Definitions and frequently asked questions.
Average Annualized Price - The average price of individual subscriptions sold in a 12-month period, presented as a one-year subscription. This calculation is made by taking the average per-copy price multiplied by the frequency for the period covered by the average price being reported.
Average Per-Copy Price - The average price of individual subscriptions sold in a 12-month period, presented on a per-copy basis.
Combined Issue - Two issues mailed in the body of one copy of the magazine. For instance, for a monthly title, the July and August issue bound and mailed together entitled “Combined July/August.” This typically represents two revenue issues.
Double Issues - A single issue which contains extra editorial or enhanced content and is considered by the publisher as two issues of the publication. Double issues are listed only once in total circulation by issue in the publisher’s statement and reflected as one issue in the calculation of average total circulation. Based on the practices of the publisher, double issues may be reflected as one or two issues in the calculation of the frequency for average price. Publisher’s serving double issues should explain in the notes paragraph the impact of the “frequency” due to the service of double issues.
Frequency - The number of issues that a magazine tells its subscribers that it publishes each year. Frequency is often referred to as “revenue issues.” This frequency is reported in the header of the publisher’s statement. The stated frequency for the period covered by the average price is that value which is used for annualizing the average per-copy price.
Gross Average Price - Optional reporting for publications reporting individual paid subscriptions. Source of sales categories in the average price calculation are the same as those in reporting net average price. This calculation reflects only those subscriptions sold within the U.S. and Canada. Gross average price includes the value of all premiums sold with subscriptions.
Net Average Price - Mandatory reporting for publications reporting individual paid subscriptions. The following sources of business should be included in the average price calculation:
- Individual subscriptions
- Association subscriptions
- Club/membership deductible subscriptions
- Partnership subscriptions
The following sources of business should not be included in average price:
- Transferred subscriber names or purchase of a subscriber list
- Sponsored sales
- Verified circulation
- Multi-digital circulation
- Club/Membership - nondeductible
- Subscriptions sold outside the U.S. and Canada
Net average price reflects total gross production revenue for a 12-month period less revenue from credit cancelled orders and premium values associated with subscriptions sold.
Special Issue - Issues published outside of the regular frequency with editorial content that may vary from the usual content of the regular issues. These issues, although reported in the Media Intelligence Center, are not included in the average of total average circulation. Based on the practices of the publisher, special issues may or may not be included in the frequency of the publication. Publisher’s serving special issues, and including the issues in the average price calculation, should contact their audit manager for guidance in reporting and disclosure.
Average Price Worksheet
Do your average price calculations on this worksheet and submit it to AAM with your filing materials.
Frequently Asked Questions
When must average price be reported for new AAM clients?
For publications newly admitted to AAM, reporting of average price is mandatory with the third publisher’s statement following the initial audit. Therefore, if your initial audit covers the period of six months ended June 30, 2016, the reporting of average price is required to be reported on the December 2017 publisher’s statement for the average price period covering 12 months ending June 30, 2017.
How should the annualized frequency be calculated for publications with a frequency change during the average price period?
For publications which undergo a frequency change during the period in which the average subscription price calculation is made, there are two options for determining the frequency used for analyzing the average price:
- The frequency of the publication at the end of the average price period may be used. The notes paragraph should contain a disclosure regarding the details to include the old and new frequency and timing of this change
- The frequency for annualizing may be based on a weighted average of the frequencies in effect for the period covered by the average price. For example, if the average price covers 12 months ending December 31, 2016, and the frequency changed in March 2016 from six to 10. The weighted frequency used by the publisher would be nine (six issues for three months plus 10 issues for nine months, total divided by 12 months in period).
What impact does international sales have on average price reporting?
For U.S. and Canadian based publications, all sales which occur in the U.S. and Canada shall be included in the average price calculation. For these U.S. and Canadian based publications who have sales outside of North America, those sales of international subscriptions should be excluded from the average price calculation. Reporting of average price is optional for International-based publications with titles sold predominately outside of North America.
In determining the average per-copy price and annualized price, how many decimals should be carried in making the calculation?
The prices portion of the publisher’s statement will report the average per-copy and annualized prices rounded to the closest cent (i.e., $xx.xx). In making your calculation, you may carry forward more decimal places than covered by rounding to the closest cent. Therefore, in determining your per-copy price, assume you have $500,000 in net revenue and 43,000 in copies. The per-copy average price would be $1.1627906 and reported on the publisher’s statement as $1.16 average per-copy price (rounded to the nearest cent). The annualized price, assuming 12 issues per year, would be $1.1627906 multiplied by 12 or $13.53.
If you choose to annualize by $1.16 per copy multiplied by 12 issues or $13.92, AAM would accept this calculation. AAM asks that you are consistent in the practice which is applied.
Why does AAM require publisher clients to submit the average price worksheet with the filing of the publisher’s statement?
Due to the complexity of calculating average price, AAM requires that publishers provide a summary of how the calculations were made, allowing for a cursory check to be done prior to release of the statement. This check does not constitute an audit of the figures being presented; instead, it allows for a check of the logic used for the calculation prior to the release of the publisher’s statement.
How are digital subscriptions reported in average price?
Digital subscriptions that are reported as paid subscriptions in total average circulation in the publisher’s statement should be included in the average price calculation formula.