Electronic paid/requester subscriptions can count as valuable add-ons in certain circumstances

The ability to count electronic subscriptions on the annual postal Statement of Ownership, Management and Circulation, PS Form 3526, has been established since 2012. I have not revisited the subject since then, when a third page was added to the form to make counting possible.
Newspapers selling e-subs, as commonly abbreviated, wanted to be able to count them on their sworn statement as legitimate proof to advertisers of the additional circulation. NNA worked for three years through various channels to make it happen.
It recently came to my attention that current interpretation of the rules surrounding e-subs might be broader than first thought.
Although complex, I want to try my best to explain the ins and outs of e-subs for paid and requester newspapers.
You are not required to report your electronic subscribers to USPS at all. You may report all or none or any amount in between, depending on your business needs. If you do decide to report, there are rules you must follow.
First, the rules from the Domestic Mail Manual: DMM 207.6.5 ELECTRONIC COPIES
Copies of Periodicals publications distributed through email or by accessing a password-protected website may be counted toward an approved or pending general or requester publication’s eligibility for Periodicals prices. The following conditions additionally apply:
a. Electronic copies that may be counted toward a publication‘s eligibility for Periodicals prices:
1. Must be paid at a price above nominal rate for publications approved in the General category; or
2. Must be requested in writing or by electronic correspondence for publications approved in the Requester category.
b. Electronic copies of a Periodicals publication for which access is offered free in conjunction with printed copies of the same issues may not be counted when determining total circulation for the publication.
c. At least 40% of the total circulation of each issue must consist of printed copies distributed to paying subscribers or requesters, as applicable. Up to 10% of the distributed copies used to qualify or remain eligible for Periodicals prices may be copies that are paid or requested to be sent electronically.
d. If less than 60% of a Periodicals publication’s total circulation consists of printed copies distributed to paying subscribers or requesters, as applicable, annual Postal eligibility audits must be conducted by a certified audit bureau.

CAN E-SUBS EXCEED 10% OF HARD COPIES?
Yes, they can.
To qualify as a Periodical, one must have a minimum of 40% print copies counting as paid distribution, whether by mail, contract carrier or single copy sales. One can count 10% electronic copies to reach the minimum 50% paid/requester rule.
The key word here is “count.” Most newspapers operate at higher percentage levels of paid print copies. For instance, requester Periodicals may operate at 50-55% requested print copies, then add another 10% electronic to keep them above 60% and avoid an audit.
Periodicals reporting under 60% paid are subject to audit by USPS to ensure that they are meeting the 50%-plus-one paid rule — thus, the terminology of 40% paid print copies and 10% electronic to meet 50%.
The Postal Service’s position is that “the number of electronic copies a publication distributes has nothing to do with us. It is only the number of electronic copies they claim, if they claim them.” That quote is from Chuck Tricamo, manager of the Pricing and Classification Service Center in New York City, who approved this column.
If a newspaper falls below the 40% hard copy paid/requested subscriptions and uses e-subs to hit 50%, they are forced to use an outside auditing firm to verify their circulation. Most community newspapers do not wish to pay the expense of third-party auditing firms. And most have more than 50% of their distributed print copies paid (by all methods, including subscriptions, single sales and bulk sales).
If a newspaper meets the 50% paid of print/requester copies (depending on category), then they can add paid e-subs without a limit set on the total, using 10% to get above the 60% necessary to avoid an eligibility audit with the rest as add-ons. Lines 16a-d on page three of a PS Form 3526 are where e-subs are reported.
And a newspaper with more than 60% of its print copies paid can also add unlimited e-subs on the 3526.

DUPLICATE PRINT AND ELECTRONIC COUNT ONCE
A newspaper distributing a free electronic version or granting web site access in conjunction with the print subscription can only count as one subscriber, not two. A subscription or request for the electronic edition must be separate from the print copy subscription.
The nominal price mentioned in the DMM refers only to a price that is at least 30% of the basic price set per term. USPS does not set minimums that a Periodical can charge.

MAX HEATH, NNA Postal Committee, is a postal consultant for Landmark Community Newspapers LLC and NNA members. Email maxheath@lcni.com.