Fairfax is clear of breaching the audit rules – now change those rules
Yesterday saw the Audit Bureau of Circulation clear Fairfax of breaching its rules.
For whatever reason, although Mumbrella first raised some of the issues, the announcement did not reach us. I now have it though.
And I also have also a widely circulated internal email sent by Fairfax’s Sydney CEO Lloyd Whish-Wilson with the subject heading “SMH v Tele and Mumbrella”.
First though, a recap.
This murky issue got onto the agenda when Crikey published an old internal email relating to circulation of Fairfax’s The Age. It was clear that the author felt that it would be damaging for the true shape of the company’s circulation model to reach the market.
The issue was that a proportion of the paper’s circulation was “campus copies” – editions of the paper delivered to universities as very cheap subscriptions . Crucially they could still be measured as paying subscribers rather than educational copies.
Then I had a tip-off and headed to the University of Sydney where I shot this video featuring the Sydney Morning Herald:
It happened to be during the mid term break, although the information I received was that a similar pile of newspapers could be found on any given week.
So to yesterday’s announcement from the ABC which stated that it had investigated and found that there had been no rule breach in either case.
And that’s the problem. Under the rules, in order for a paid sale to count as a paid sale, it does not need to end up in a reader’s hand.
That’s where the industry has a credibility problem. The ABC has been diligently enforcing a set of rules that allow loopholes.
Clever circulation people from all publishers work to get as high a number as possible onto the certificate within the rules – even if there are loopholes you could drive a newspaper delivery truck through. Their job is not to help media agencies work out how many copies really go into people’s hands.
In the announcement clearing Fairfax, that’s hinted at. After saying how the finding reaffirms how much everyone trusts each other, Initiative’s Tracie Michael, deputy chair of the ABC, is quoted as saying: “The investigation has highlighted the potential for greater transparency in the reporting of subscriptions and in particular those delivered to third party addresses.”
I’ll say.
And that’s where the real action is going to happen. A sub-committee of the ABC is currently meeting on a weekly basis to review the rules.
Hopefully the outcome will be transparency over what proportion of readers pay the cover price (or at the very least above half price) to get their newspaper. It may come as something of a surprise that this does not already exist.
If this transparency now happens, I can see that number become the key negotiation metric – not the headline number.
And that’s where the next potential problem comes along. Yesterday, Sydney’s Daily Telegraph had to issue a retraction:
“Last Friday, November 12, The Daily Telegraph issued a statement in relation to the latest ABC newspaper circulation audit.
“In this statement we stated sales of The Daily Telegraph on Saturday (excluding bundled, event, education, accommodation and airlines distribution) had overtaken those of The Sydney Morning Herald for the very first time.
“The ABC has advised us that publicising broken-out categories in this manner is not permissible under their guidelines, and we correspondingly withdraw this statement.
“Average net paid sales of The Daily Telegraph on Saturday for the September audit period were 325,000+.
“For the same audit period, average net paid sales of The Sydney Morning Herald on Saturday were 332,066.
So in other words, the ABC’s members are not allowed to publicise what seems to me to be a helpful comparison. How does that act in favour of advertisers, I wonder?
Meanwhile, as I mentioned, Fairfax’s Whish-Wilson sent a note out to what appears to have been most of the company. A number of people helpfully forwarded it to me. In it he concluded:
“A video on the trade website Mumbrella showed us delivering papers during the spring break. The supplies were an error. The campus did not reduce supply as it normally would and we did not pick up the mistake. The copies were not, and would never have, been audited.”
“Would never have been audited”? Now of course we’ll never know for sure, but as the papers were hours away from recycling when we came across them, I’d love to know the methodology through which they’d have been excluded. And as I say, my tip-off did not relate to spring break.
Not that this matters in the scheme of things. What matters now is that the numbers are broken down more transparently. And that those numbers are easily available.
That means the ABC making available the broken out numbers when it publishes its quarterly trend report summaries – something that does not routinely happen at the moment. Burying them in the certificates and leaving agencies to do their own detective work would not be the full transparency being talked about.
Here’s hoping the ABC rises to the challenge.
Tim Burrowes
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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Hi Tim.
You’re 100% right that credibility is the key issue here.
When the rules were re-drafted in 2006, subscriber copies were basically of two sorts. The first was individual copies to a person’s home address. The second was copies to an office – not a specific person, but to a specific address.
The distribution of printed newspapers (and magazines) has changed dramatically since then as publishers rightly strive to get their product in as many consumer’s hands as possible. One of these new distribution channels for subscriptions was “campus copies”. In essence, many, many students paid for an upfront annual subscription. These copies were heavily discounted, and remembering my uni days I wish I had have had that same opportunity back then.
The difference is that the “campus copies” are not distributed to a specific address. It is up to the student to show their subscription card and pick it up from the common distribution point. Of course, not every student subscriber will pick up their copy every day (and they tend to pick it up last thing in the day) which overstates the number. Conversely, I bet many copies are picked up without a student who is not a paying subscriber. I think we all agree that this subscriber number therefore is a very rubbery cohort of the actual number of copies that end up in a student’s hands.
Traditionally we have assumed that subscriber copies were always delivered. That is, the newsagent’s throwing arm was accurate enough to hit the front lawn every time from the car. (By the way, did you know it is illegal to throw anything from a moving car!). While we can’t guarantee 100% delivery every day, it is a perfectly acceptable assumption that a subscription copy is delivered. The same goes for office subscriptions – in fact the number of eyeballs will exceed the number of office copies in most instances.
Where the assumption collapses is with “campus copies” and the like, where there is a bulk delivery, and not a specific delivery. Clearly, NO-ONE is happy with this defect in the rules – hence the urgent review being undertaken.
Regarding the instance which you videoed at Sydney Uni, what I am aware of is that if the number of copies delivered to the campus exceeded the number of subscriptions, then the audit would only allow the subscription number through. (Conversely, if the deliveries were less than the subscriptions, the delivery number would be used for the audit). Yep, either way the number was too high by what we all understand a paid copy to be. Yep, the number was within the existing (but soon to be amended) rules. No, not all those pallets counted towards the audit. No, those extra copies would never have passed audit if they exceeded the number of subscriptions.
The thing is, this is clearly a valid mode of distribution and we can’t allow a rule to define what can and cannot be used for distribution models. It is also clearly quite different to traditional subscription copies, therefore they will need to be broken out and transparently separately reported as part of the rule revision.
And finally, the 2006 rules revision – which created the various ‘buckets’ for sales – also presented the opportunity for publishers to aggregate the ‘buckets’ to come up with a “winning number”. It was agreed at the time that having multiple #1s in the market at the same time was not a good look, therefore all PR was to be based on Average Nett Paid Sales and not some other construct which could confuse the marketplace. Of course subscribers and agencies have full data and can construct the quantum than most closely meets their clients needs. I believe this principle still applies.
Cheers … and on with the rules rewrite!
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Hi Tim,
I am sorry that you did not receive this in the original send – you were on the list but due to some email issues we were having not everyone appeared to have received the email. This was not intentional! and of course you must know that you are one of our favourite media reporters.
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