The national newspaper industry is bracing for an historic shakeup following Crikey‘s revelations last month that tens of thousands of copies of leading metro mastheads were sitting idle each day in high school staff rooms and university campuses.

The Audit Bureau of Circulations convened its annual general meeting yesterday and announced that a special rules subcommittee would review current circulation definitions that enable cut-price secondary and tertiary sales to be hidden from advertisers in a publication’s average net sales figure.

The committee is likely to recommend that the so-called “campus copies” and high school sales be broken out from the headline figure to let advertisers and agencies better gauge their annual multi-million dollar ad spend.

Today, the allegations were reported for the first time in the Fairfax press, with both The Age and The Sydney Morning Herald carrying news of the review in their business pages.

In mid-September, Crikey published a leaked Fairfax internal email and other secret documents showing that in 2004 and 2007 The Age was sending 40,000 daily copies — around 20% of its circulation — through the bulk channels. The email, marked confidential, said that if the 40,000 figure ever became public, The Age would have to write down the value of its advertising by the same amount.

The initial revelations were followed up with further reports in Crikey and Mumbrella that thousands of copies of The Age and The Sydney Morning Herald were sitting unread on pallets at Melbourne and Sydney University during the institutions’ mid-semester breaks.

And as Crikey reported two weeks ago, the ABC subcommittee, headed by bureau chairman Stephen Hollings, will also probe former Herald Sun editor-in-chief Bruce Guthrie’s claims in his book Man Bites Murdoch that his newspaper was sending up to 100,000 copies a day through schools, universities and events to keep its daily circulation above the magic 500,000 figure. Around 75,000 of those sales are believed to end up at educational institutions through deals costing as little as $20 a year.

Owing to a loophole in the current ABC rules, the cut-price copies are not broken out from the headline average paid net sales figure because they are technically deals with individual subscribers. The current “education” category only includes bulk sales to institutions and amount to well under 1% of a publication’s daily circulation.

Since the last major rule change four years ago event, airlines, hotels, and sales direct to institutions — but not individual deals with teachers and students — are required to be broken out from the headline figure.

The Bureau’s chief, Paul Dovas, said he would wait until the investigation was complete before speculating on potential reforms. The subcommittee will report to the ABC’s executive committee by mid-November and will be represented by the ABC’s core membership — advertisers, agencies and publishers.

Representatives of the Media Federation of Australian and the Australian Association of National Advertisers are believed to be exceptionally keen to create a new bucket encompassing the cut-price copies.

Peter Fray

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Peter Fray
Editor-In-Chief of Crikey

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