Paid Individual Subscriptions

Ensure your individual subscription promotions qualify as paid circulation.

 

This guide explains and clarifies the rules and guidelines governing promotions for Canadian newspapers that generate paid individual subscription circulation on AAM documents. This guide is not intended to be all-inclusive, but provides general guidance on the most common initiatives.

To qualify digital copies as paid circulation, please see the digital editions guide.

It is the publisher’s responsibility to ensure that initiatives comply with all AAM rules and guidelines. Upon request, AAM provides a confidential review of clients’ programs. If you are developing an initiative that is not addressed in this guide, please contact AAM.



Definitions

Individual Subscriptions

Individual subscriptions refer to subscriptions purchased by individual consumers for personal use. A subscription is defined as the purchase of more than a single issue of a newspaper.

Individual subscriptions are often delivered to subscribers in one of the following methods:

  • Carrier: Individual who delivers the newspapers on foot
  • Motor route: Individual who delivers the newspapers via a motor vehicle
  • Mail: Copies delivered via Canada Post.
  • Digital editions: Copies delivered digitally. See the digital editions guide.

Paid Circulation

AAM defines paid circulation as subscriptions and single copies paid at an amount of at least one cent, net of all considerations.

While AAM Rule C 101.1 Paid Circulation Defined is the primary rule defining paid circulation, it is not the only AAM rule a newspaper must consider when creating paid, individual subscription promotions. Rules governing premiums, combination sales, frequency conversions, etc. also exist. A newspaper must consider all pricing rules applicable to the program they are developing.

 

Apartment Programs

Newspaper subscriptions included with the cost of monthly apartment rent are eligible for inclusion as paid individual subscriptions.

Qualification

For the subscription copies included with the monthly apartment rent, the lease (or lease addendum) for the apartment must:

  • State the term (monthly) and frequency of the subscription.
  • State the amount of the rent per month allocated to the subscription (subscription value).
  • Ask the tenant if they wish to receive the subscription (yes and no response options).
  • State that if the subscription is declined, a refund for the subscription value will be provided.
  • Exclude any reference to the subscription as free, no additional cost or other synonymous language.

Pricing

The subscription value must be at least one cent, net of all considerations.

Promotional Material

The promotional material is the lease addendum. Therefore, it must comply with the requirements stated above.

Reporting

Circulation generated from apartment programs is classified as paid individual subscriptions in AAM’s database and documents.

 

Charitable Donations

Newspaper subscription offers promoting a donation to charity are eligible as paid individual subscriptions.

Pricing

When a portion of the newspaper’s subscription price is donated to charity, the consumer must pay no less than one cent, plus the amount presented to the consumer as a donation.

See AAM Rules C 105.7 Sponsored Subscriptions and C 101.1 Paid Circulation Defined.

Promotional Material

All promotional material must:

  • State the term and frequency of the subscription.
  • State the purchase price.
  • Indicate the specific amount of the donation and name of charity.
  • Reflect a qualifying price

Reporting

Circulation generated from the sale of subscriptions including a charitable donation is classified as paid individual subscriptions in AAM’s database and documents.

 

Combination Sales

Combination sales are defined as two or more different publications sold as a package during new, renewal or billing efforts, and each publication in the sale is a priced product (newspaper or periodical). Combination subscriptions are eligible as paid individual subscriptions.

Pricing

A publication may create a solicitation piece for combination sales as follows:

  • Promoting only the sale of the combination package.
  • Promoting the combination package and a subscription to one or both the publications individually (optional). ­

If the solicitation material promotes the sale of only the combination package, then the purchase price offered to the subscriber must be a minimum of one cent per subscription, net of considerations.

If the solicitation material also includes a subscription to one or both the publications individually, then the purchase price offered to the subscriber for the combination must be a minimum of the following:

  • 100 percent of the selling price for the subscription with the highest individual subscription price involved in the sale.
  • One cent for each additional subscription in the sale, net of considerations.

Promotional Material

All promotional material must:

  • State the publications involved in the combination package.
  • State the term for all publications in the package (and frequency for newspapers involved).
  • State the purchase price for the combination package.
  • Reflect a qualifying price.
  • Exclude reference to any of the publications as free, no additional cost or other synonymous language.

A subscription to each publication in a combination package must be generally available for sale in the marketplace independently. See AAM Rule C 105.3 Combination Sales.

Reporting

Circulation generated from combination subscription sales is classified as paid individual subscriptions in AAM’s database and documents.

 

Contests

Subscriptions offering purchasers the opportunity to enter a contest and win a prize are acceptable. Offering an individual the chance to enter a contest does not impact the qualification of a paid subscription.

If the winner of the contest is a subscriber, then he or she has received a gift as a direct result of purchasing the newspaper. Since there is only one winner who affects only one subscription, the impact to paid circulation is immaterial.

If the newspaper held a significant number of contests or offered a significant number of prizes over the course of the audit period that impacted circulation materially, AAM may consider the contest to impact paid circulation. Disclosure of these contests is not required.

See also AAM Rule C 105.5 Contests and Coupons.

 

Discounts

Discounts represent subscriptions sold at a price lower than basic.

Pricing

Subscriptions of the newspaper may be sold at a price of at least one cent, net of all considerations. See AAM Rule C 101.1 Paid Circulation Defined.

Promotional Material

All promotional material must:

  • State the term and frequency of the subscription.
  • State the purchase price.
  • Reflect a qualifying price.

Reporting

Circulation generated from discounted subscription sales is classified as paid individual subscriptions in AAM’s database and documents.

 

Easy-Pay Programs

Easy-pay programs are defined as programs where a subscriber continuously pays for the subscription through automatic billing to a debit or credit card. The subscriber will continue to receive the newspaper until they contact the publication to cancel service or future payment (billing).

Easy-pay programs are subject to all the same AAM rules and guidelines as all paid individual subscription offers including premiums, discounts, combination sales, etc. If you are considering an easy-pay offer, please see the other promotion types discussed in this guide.

 

Free: Part of a Single Subscription Term Stated as Free

Subscriptions presenting part of a subscription term as free are eligible as paid individual subscriptions for the entire term. This includes offers using the terms trial, risk-free, no additional cost, bonus, no extra charge or other synonymous language.

The circulation associated with the entire delivery period is eligible as paid circulation if the promotional material presents a perceived cost to the consumer for the entire subscription term. This is accomplished by stating the full-delivery term and subscription cost in the contract portion of the order. See AAM Rule C 101.1 Paid Circulation Defined.

The contract portion of the order is the material the consumer returns to the publisher such as:

  • The direct mail card.
  • The portion of a solicitation flyer mailed to the publication.
  • The online order page.
  • The point of verbal agreement in a telemarketing script or inbound call.

Pricing

AAM rules require subscribers pay at least one cent, net of all considerations, for the entire delivery term of the subscription, inclusive of the weeks or months presented as free.

Promotional Material

All promotional material must:

  • State the term of the subscription that is paid and the term that is free.
  • State the frequency of the subscription.
  • State the purchase price.
  • Contain language in the contract portion of the offer that states the full delivery term and purchase price of the subscription.
  • Reflect a qualifying price for the entire term of delivery.

For easy-pay offers, if part of a term is presented as free, then the promotional material must contain language that implies value to the free term with a paid portion of the offer. For example, if it solicits “Choose easy pay and get the first 4 weeks free,” the value can be implied by stating, “That’s the first 8 weeks for the price of 4.”

Reporting

When part of the subscription term is presented as free to the consumer, the result is an offer at a discount. The circulation is classified as paid individual subscriptions in AAM’s database and documents.

 

Frequency Conversions (Upgrades)

There are two types of frequency changes:

  • Forced conversion
  • Frequency upgrade

The expiration date of the subscription should not be extended because of a frequency change unless it is done with renewal or billing efforts where the consumer agrees to a new extended term.

Definitions

Forced Conversions

A forced conversion is when the newspaper eliminates a subscriber’s current frequency of delivery and begins service of a new one as a replacement. By eliminating the frequency, the newspaper forces the subscriber to receive a new upgraded frequency.

A frequency may be eliminated for a defined geographic area. After the date the frequency is eliminated, subscribers may not remain on the eliminated frequency for any reason. The former frequency must not be reinstated for at least three months. See AAM Rule C 105.12 Subscription Offer Based on Acceptance Unless Declined.

Frequency Upgrades

A frequency upgrade is when the newspaper wishes to service subscribers a greater frequency. Notice of a change in frequency must be sent to the affected subscribers prior to the start of the upgraded service.

The amount of money originally paid by the subscriber must equal no less than one cent, net of considerations.

Promotional Material

For a forced conversion, all subscriber notifications must:

  • State the current frequency has been eliminated and identify the new frequency that will be delivered.
  • Identify the date the frequency change is effective.
  • Exclude reference to the additional days of delivery as free, no additional cost or other synonymous language. Rather, it should state that the additional days are included with the cost of the current paid subscription.

For a frequency upgrade, the promotional material must:

  • State the new frequency that will be served.
  • Contain a clear and conspicuous notice informing subscribers they can opt-out of this upgraded delivery.
  • Provide clear and simple instructions on how to opt-out.
  • Exclude reference to the additional days of delivery as free, no additional cost or other synonymous language. Rather, it should state that the additional days are included with the cost of the current paid subscription.

Reporting

Circulation generated due to forced conversions and frequency upgrades is classified as paid individual subscriptions in AAM’s database and documents.

 

Gift Subscriptions

Gift subscriptions are purchased by a consumer and given as gifts to other individuals as a normal expression of friendship.

Subscriptions purchased by a business entity to promote its professional or business interests shall not be considered gift subscriptions. This distribution is considered qualified circulation. See AAM Rule C 103.3 Other Qualified Circulation.

Pricing

A qualifying price for the sale of two or more subscriptions to the same newspaper is one cent per subscription, net of all considerations.

Promotional Material

All promotional material must:

  • Identify the number of subscriptions in the sale.
  • State the term and frequency of each subscription.
  • State the purchase price.
  • Reflect a qualifying price.
  • Exclude reference to any of the subscriptions as free, no additional cost or other synonymous language.

Reporting

Circulation generated from gift subscriptions is classified as paid individual subscriptions in AAM’s database and documents.

 

Joint Distribution Agreement

A joint distribution agreement (JDA) is a situation when a newspaper publishing fewer than seven days a week wants to distribute copies of another newspaper on days it does not publish.

Qualification

If a newspaper wishes to enter a joint distribution agreement, the following requirements must be met on the date the agreement becomes effective:

  • The service of the joint days must be effective for all subscribers.
  • All frequencies of the newspaper must include the joint day(s) of delivery
  • It may only enter a joint distribution agreement for no more than two days on which it does not publish.

Pricing

All current subscribers affected must have paid a minimum of one cent, net of all considerations. All new and renewal subscription offers must reflect a qualifying price of no less than one cent, net of all considerations.

Promotional Material

All promotional material must:

  • State the two newspapers involved in the joint distribution agreement.
  • State the term and frequency of the joint distribution service.
  • State the purchase price.
  • Reflect a qualifying price.
  • Exclude references to either of the newspapers as being free, no additional cost or other synonymous language.

Reporting

Circulation generated from joint distribution subscriptions is classified as paid individual subscriptions in AAM’s database and documents.

 

Multiple Subscriptions to the Same Newspaper

Multiple subscriptions of the same newspaper sold to one individual for personal use are acceptable as paid individual subscriptions.

If multiple subscriptions are purchased by a business to promote their professional interests, the copies are only eligible as qualified circulation. See AAM Rule C 103.3 Other Qualified Circulation.

Pricing

A qualifying price for the sale of two subscriptions to the same newspaper is one cent per subscription, net of all considerations.

Promotional Material

All promotional material must:

  • Identify the number of subscriptions involved in the sale.
  • State the term and frequency of each subscription.
  • Offer a single subscription for a lower price.
  • State the purchase prices.
  • Reflect a qualifying price.
  • Exclude reference to any of the subscriptions as being free, no additional cost or other synonymous language.

Reporting

Circulation generated from multiple subscription sales is classified as paid individual subscriptions in AAM’s database and documents. 

 

Premiums

Premiums are any item or incentive offered to consumers enticing them to purchase a subscription. The premium item could be anything provided free or at a discount as a direct result of the newspaper purchase.

The following items are not considered premiums:

  • Coupons in the newspaper (ROP and FSI).
  • Part of the subscription term. See the section on part of a subscription term stated as free.
  • Free or discounted access to archives or back content.
  • Free or discounted access to online content or digital editions from the same editorial home of the publication.
  • Anything sent free by mail with the subscription offer or sample merchandise that can be ordered and received regardless if a subscription is purchased.
  • Items offered to current paid subscribers as an incentive to convert to payment method for a future subscription.

See also AAM Rule C 105.1 Premium Defined.

Pricing

When a premium is offered with a subscription, the consumer must pay at least one cent, plus no less than the full value of the premium.

The full value of the premium is considered the highest of the following:

  • Stated value (value stated on the promotional material).
  • Retail value (price it would cost a consumer to buy the item in the public marketplace).
  • Cost to publisher (cost to obtain or produce the item).

In some cases, an item may not be sold to the public and the promotional material will not state a value. In those cases, the cost to the publisher would be used to determine the premium value. However, if more than one value exists, the premium value is always considered the highest value for AAM qualification.

See AAM Rules C 101.1 Paid Circulation Defined and C 105.2 Premiums with Subscriptions/Single-Copy Sales.

Promotional Material

All promotional material must:

  • State the term and frequency of the subscription.
  • State the purchase price.
  • Identify the premium being offered with the sale of the newspaper.
  • Reflect a qualifying price.

The premium gift may be presented to the consumer as free.

Reporting

Circulation generated from subscriptions sold with premiums is classified as paid individual subscriptions in AAM’s database and documents.

 

Previous Sunday

The program commonly referred to as the previous Sunday program is when a consumer is offered a copy of the most recent Sunday paper with the purchase of a new subscription. This Sunday is additional to any Sunday copies included in the new subscription term and is eligible as paid individual subscriptions.

Qualification

To claim the previous Sunday as paid circulation, the following requirements must be met:

  • Must be offered to only new subscribers.
  • The consumer must act to accept the previous Sunday copy (opt-in).
  • The previous Sunday may not be reported as free, no additional cost or other synonymous language.

Pricing

To claim the previous Sunday as paid circulation, the consumer must pay at least one cent for the new subscription (including the previous Sunday), net of all considerations.

Promotional Material

All promotional material must:

  • State the term and frequency of the new subscription.
  • Require the subscriber to act to accept the previous Sunday (opt-in).
  • State the purchase price for the new subscription.
  • Reflect a qualifying price.
  • Exclude reference to the previous Sunday as free, no additional cost or other synonymous language.

Reporting

Circulation generated from new subscriptions inclusive of a previous Sunday is classified as paid individual subscriptions in AAM’s database and documents. 

 

Sale of a Subscription with Other Services

Subscriptions sold with other services such as cable television, Internet or phone service are eligible as paid individual subscriptions.

Qualification

When a subscription is offered with the sale of another service, the following is required:

  • The decision to purchase the subscription must be separate and distinct from the purchase of the other service.
  • The consumer must act (opt-in) to accept the subscription.
  • An incremental cost for the subscription must be charged to the consumer above the cost of the other service.
  • The invoice, receipt or billing statement for the other service must itemize the subscription cost separate from the other service.
  • The other service must be available for sale without the newspapers.
  • The cost of the other service on its own must be less than the cost with the newspapers by a qualifying price for the newspapers.

Pricing

A qualifying price for a subscription sold with other services is one cent, net of all considerations.

Promotional Material

All promotional material must:

  • Offer the consumer the choice to purchase the subscription as a separate decision from purchasing the other service.
  • State the term and frequency of the subscription.
  • State the purchase price for the subscription.
  • Reflect a qualifying price.
  • Exclude reference to the subscription as being free, no additional cost or other synonymous language.

Reporting

Circulation generated from subscriptions sold with other services is classified as paid individual subscriptions in AAM’s database and documents.

 

Subscriber Loyalty Programs

A subscriber loyalty program represents reward programs designed to promote brand loyalty by demonstrating appreciation to subscribers.

If a newspaper’s loyalty program meets all the following conditions, the program shall not be subject to the premium rules:

  • Requires enrollment initiated by the subscriber. Automatic enrollment is not permitted.
  • Rewards take the form of either merchandise or points redeemable for merchandise.
    • May include benefits such as, but not limited to, access to archives of the newspaper, other editorial content generated by the newspaper, community calendars, discounts to retailers, VIP access to events, and access to newspaper sponsored events and services.­
    • Cannot include access to paid print or digital subscriptions of other publications.
    • Rewards cannot be converted to cash or accepted as payment for a subscription to the newspaper.
    • Rewards provided to a new subscriber in the first 90 days of their term may not exceed the price they paid for the subscription.
    • The newspaper may designate eligibility for membership in the program and level of membership available.
    • See AAM Rule C 105.1 Premiums Defined.

If a newspaper’s loyalty program does not meet all the conditions listed above, then the following applies:

  • When membership is offered to subscribers as a free benefit or gift for subscribing, the membership is viewed by AAM as a premium and is subject to all premium rules. See AAM Rule C 105.2 Premiums with Subscriptions/Single-Copy Sales.
  • The newspaper must make membership in the program available to nonsubscribers (for a price).
  • The price at which the membership is sold to nonsubscribers is considered the premium value.
  • Per the premium rules, all subscribers receiving membership in the program must have paid at least one cent, plus the full premium value. 

 

Subscriptions Purchased with Award Points

Subscriptions purchased with award points are eligible as paid individual subscriptions.

See AAM Rule C 105.9 Subscriptions Purchased with Award Points.

Qualification

The qualification requirements for subscriptions purchased with award points primarily focuses on the structure of the reward point program and are as follows:

  • The award programs must:
    • Build brand loyalty of discretionary goods and services and increase the sales of a host organization.
    • Require an enrollment process.
    • Require points be earned as a result of specific incremental actions by the consumer.
    • The consumer must be fully informed of the actions necessary to earn points including volume of points for each activity.
    • Make accrued points available for future redemption.
    • Make a consumer’s account status accessible on a regular basis.
  • The consumer must be fully aware of all items that may be obtained for the redemption of points.
    • All items offered must have a stated value in points or dollars.
    • At least 20 percent of all items offered for the redemption of points must be non-publication items.
    • At least half of all the non-publication items must be commercially available.
    • The value of each commercially available item must be equal to or greater than the average value of all publications available.
    • The program may provide an initial award of no more than 35 percent of the points needed to obtain the least expensive product or service in the program.
  • Each point must have a monetary value.
    • The product value divided by the assigned point value equals the per-point value.
    • The point value must be consistent for all award items.
    • If the points have an expiration date, the program must allow time for sufficient accumulation of points to redeem the highest valued item.

Pricing

A qualifying price for a subscription purchased with award points is one cent, net of all considerations. This can be determined by multiplying the per-point value for points in the program by the number of points required for the acquisition of the newspaper subscription.

Promotional Material

All promotional materials for the award program must reflect the requirements listed above.

The promotional material to encourage consumers to redeem their points for subscriptions must:

  • State the term and frequency of the subscription.
  • State the number of points required to obtain the subscription.
  • Reflect a qualifying price (based on per-point value times the number of points required to obtain the subscription).

Reporting

Circulation generated from subscriptions purchased with award points is classified as paid individual subscriptions in AAM’s database and documents.

 

For the Audit

For all paid individual subscription efforts, a newspaper must maintain a file for each audit period containing examples of solicitations used. See AAM Rule B 101.1 File Copies, Subscription Promotion Offers.

This includes, but is not limited to:

  • Direct mail pieces
  • Order forms
  • Telemarketing scripts
  • Radio scripts (or recordings of radio advertisements)
  • Television scripts and storyboards (or recordings of television advertisements)
  • Print outs of website pages
  • Point-of-purchase materials (signs, posters, etc.)
  • Advertising campaigns (run of press and free standing insert)

The newspaper should be able to identify the internal promotional code assigned for each specific and unique promotion.

In addition to a review of the promotional material, the auditor will perform actions including, but not limited to, the following:

  • Evaluate the financial relationship such as wholesale rates, credits and debits issued, and collection procedures between the newspaper and its home-delivery contractors.
  • Review a selection of subscriber accounts for detailed testing. Therefore, access to the records of any agents and subscribers will also be required. These records may include, but are not limited to copies of invoices, draw sheets, collection reports, debit and credit memos, payments and bank deposits.

It is expected that the publication will respond in a timely manner to all auditor requests for documentation supporting circulation claimed as paid individual subscriptions.

It is the publisher’s responsibility to ensure that initiatives comply with all AAM rules and guidelines. Upon request, AAM provides a confidential review of members’ programs. If you are developing an initiative that is not addressed in this guide, please contact AAM.

Previous Article
Public Access Copies
Public Access Copies

Counting apartment, event and rack distribution.

Next Article
Group Subscriptions
Group Subscriptions

Employee copies must meet certain requirements to be classified as paid group circulation.

Do you have questions or want to learn more?

Contact AAM