Average Price Definitions and FAQ
Key definitions and impact on reporting of Average Price
Average Annualized Price - The average price of individual subscriptions sold in a 12-month period - presented in a manner reflecting a one-year subscription. This calculation is made by taking the average per-copy price times the frequency in place 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 the “Combined July/August.” This typically represents two revenue issues.
Double Issues - A single issue which contains extra editorial or enhanced contents and which is considered by the publisher as two issues of the publication. Double issues are listed only once in paragraph 4A, Issue-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 note in the explanatory 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 as well as in paragraph 3A. Duration of Subscription Sales. The stated frequency for the period covered by the average price is that value which is used for annualizing the average per-copy price in paragraph 2A.
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
- Public Place/Sponsored sales
- 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 paragraph 4A, Issue-by-Issue in the publisher’s statement, are not included in the average in paragraph 1 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 should note in the explanatory paragraph the inclusion or exclusion of the special issues for their average price calculation.
Other Frequently Asked Questions
New member to AAM, when must average price be reported?
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 6 months ended June 30, 2003, the reporting of average price (paragraph 2A) is required to be reported on the December 2004 publisher’s statement for the average price period covering 12 months ending June 30, 2004.
Publications with a frequency change during the average price period, how should the annualized frequency be calculated?
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 which should be used for analyzing the average price: (1) the frequency of the publication at the end of the average price period may be used. The explanatory paragraph should contain a disclosure regarding the details to include the old and new frequency and timing of this change. (2) 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 covered 12 months ending December 31, 2002, and the frequency changed in March 2002 from 6 to 10 . The weighted frequency used by the publisher would be 9 ( 6 issues for 3 months plus 10 issues for 9 months, total divided by 12 months in period). The explanatory paragraph should contain a disclosure regarding the details to include the old and new frequency and timing of this change.
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 publication who have sales outside of North America, sales of international subscriptions (those outside North America) should be excluded from the average price calculation.
For International based publications, those titles which have sales predominately outside North America, reporting of average price is optional. In place of an average price reporting, international publications shall provide for special reporting in a paragraph 3D of AAM publisher’s statement reflecting a summary of those titles sold at Publisher’s Suggested Price, Higher and Lower than Publisher’s Suggested Price. In addition the sales prices shall also be reported.
Publications with a change in publisher’s suggested price, should this change in price be reported in paragraph 2A?
Paragraph 2A reports the publisher’s suggest price in effect for the average price period. The publisher’s suggested price in effect at the end of the period covered by the average price is that price which will appear in paragraph 2A. If a change in publisher’s suggested price occurs during the average price period, the publisher may opt to report in the explanatory paragraph a notation regarding this change and provide the old publisher’s suggested price and the date of the change.
In determining the average per-copy price and annualized price, how many decimals should be carried in making the calculation?
Paragraph 2A will report the average per-copy and annualized 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, assume you have $500,000 in net revenue and 43,000 in copies. The per-copy average price would be $1.1627906 and be reported on the ABC 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 times 12 or $13.53.
If you chose to annualize by $1.16 per copy times 12 issues or $13.92, AAM would accept this calculation.
AAM asked that you are consistent in the practice which is applied.
Why does AAM require publisher members to submit the average price worksheet with the filing of the publisher’s statement?
The average price is a relatively new reporting metric for periodical members of AAM, as it became a mandatory item for reporting with the December 31, 2001 period. This calculation for many publishers is not a simple calculation to make and, therefore, AAM found that it is appropriate during the initial years in making this reporting to require publishers to submit a summary of how the calculation was 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 to be made prior to release of the publisher’s statement.
How are electronic edition subscriptions reported in average price?
Electronic editions which are reported as paid subscriptions in paragraph 1 of the publisher’s statement should be included in the average price calculation formula. Current reporting requirements do not report average price of electronic editions and print edition sales separately.
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