Is the ratebase doomed?

“The rate base is really just an anachronism,” said Rebecca McPheters, who is president of McPheters & Co., a consulting and research firm. “The value to the advertiser is not the number of copies or how they are paid for or distributed, but rather who reads it and who buys the advertiser’s product. It would be a very brave thing for Time to do and would be an exciting development for the industry.”

There is a frisson running through the magazine business about the possibility that Time magazine may lead the way in abandoning the longstanding habit of guaranteeing a minimum number of paid subscribers to advertisers.

A story in Mediaweek is but one part of the coverage. Time is considering dropping the rate base altogether. This has partly been prompted by the new, tightened rules imposed by the Audit Bureau of Circulations (ABC). Where, previously, publishers had been able to lump in "public place copies" and other controlled of so-called "negative-option" subs with their paid base, now they have to break them out as "verified". This has meant that advertisers (who knew well how the game was played) are using the change to question the rates they are paying.

Time's most recent circ figures show that it has 4 million, but of those 350,000 are "verified". It could save a significant amount of money if it dropped its guarantee and let circ slide to the area where its crosstown rival Newsweek is (just over 3 million) and concentrated instead on other audience measures (metrics, to use the accepted term) such as reader engagement. In other words, emphasize quality rather than quantity. The magazine is to make its decision by November. Time would be joining almost 50 other ABC-audited titles which have already made the move. But if Time goes, a lot of other mainstream, well-known consumer magazines will follow suit, not just within Time Inc., but in other large players such as Hachette and Meredith.

Robin Steinberg, senior vp, director of print investment for MediaVest said “The question is, will advertisers agree to a different form of measurement that is exclusive of circulation? And if other magazines follow suit, will buyers just move money to different media?”

In Canada, ratebases have rarely been a factor. Because of the smaller market, Canadian magazines have emphasized instead measured readership totals through such devices as the Print Measurement Bureau. It just makes the numbers look bigger.