• by March 13, 2001

(AP) - Magazine publishers and advertisers have agreed to overhaul rules governing how circulation is calculated, giving publishers more leeway in discounting subscriptions as they try to stem a decline in circulation.

In return, publishers will have to provide more detailed data to advertisers on their twice-yearly circulation reports, including the average price of subscriptions and how many are sold at deep discounts as part of promotional drives.

The changes, which follow a separate revamp of circulation rules for newspapers agreed to last fall, were approved at a weekend board meeting of the Audit Bureau of Circulations, a Schaumburg, Ill.-based publishing industry group.

The changes now go out for review and comment by the ABC's members, which include publishers and advertisers. They will go up for final review at the body's next board meeting in mid-July, and could be implemented retroactively as soon as July 1, ABC spokesman John Payne said Monday.

The most significant proposal calls for eliminating the "50%" rule, under which a publisher must receive at least half of the magazine's basic price for a subscription in order for it to count as paid circulation.

Publishers have been pressing for a revision to the rule, which dates from the founding of the circulation body in 1914, saying it impedes their efforts to gain new readers by offering discounted and promotional subscriptions.

The advertising industry agreed to discard the rule, meaning that magazines sold at any price can count as paid circulation. As part of the deal, publishers will now have to disclose more information on how they sell magazines and at what prices.

The new disclosure rules will require publishers to provide a net average price for all subscriptions, and additional data will have to be provided for copies sold at less than 35% of that price. Also, publishers will have to disclose more detail on bulk copies, such as ones that are given away in public places or with club memberships.

The goal of the additional disclosures is to give advertisers a clearer picture of how interested readers are in receiving the magazines by judging how much they're actually paying for them.

The changes come at a time when magazine companies are battling a long-term slide in circulation, whose effects on their business had been masked by robust advertising revenues over the past 10 years.

"It's a very tough time for the circulation business," says Dan Capell, an industry analyst who follows circulation issues. "Now that advertising is going soft, these problems are going to be more apparent."

Magazine publishers have been badly hurt by the troubles at two sweepstakes houses which had provided about one-fourth of their new subscriptions as recently as five years ago, Capell said.

American Family Publishers has gone under and Publishers Clearing House has sharply curtailed its business after both companies were targeted by lawsuits claiming deceptive busi