[rhkocatas]

There have been many questions asked about how the magazine subscription industry works. I will try to answer some of the most frequently asked questions here as well as field any ones that you may have.

Can any company sell magazine subscriptions?
No. In order to sell a magazine you need authorization from the publisher. There are varying kinds of magazine authorization, some of which allow online sales where others don't. The majority of online magazine resellers (We counted about 110 last time we looked) are not authorized and publishers are actively moving to get their titles removed from these rogue sites.

Is uSubscribe.com authorized?
Yes. We are fully authorized to sell the titles we carry and furthermore we are authorized to sell them online. While we do not maintain authorizations directly with the publishers we fulfill our orders through a company called MSC (Magazine Subscription Center) in Tennessee. This company also handles all credit card processing and customer service for us.

How can I tell a website that is authorized versus one that is not?
Unfortunately it is not easy to do without really knowing the industry. There are only a handful of company's authorized to sell magazines online. The ones I know for certain include MagazineOutlet.com, Amazon.com, Magazines.com, and of course, uSubscribe.com.

Who is not authorized or illegal?
For legal reasons we will not name names here however if you as an affiliate are unsure ask the Company to provide a letter stating that they are authorized to sell all the magazines listed on their site online. This will protect you in case they are not and a publisher writes you a letter. Also if you get a Cease & Desist letter we would recommend you either change or remove your links as soon as possible.

Why do some sites sell magazines for so much less then uSubscribe.com?
These again are rogue agents that are not authorized or in many cases running a scam. A good rule is if it sounds too good to be true it probably is. Magazine publishers set the price that authorized agents can sell their titles for. That being said the amount of money someone pays for a magazine subscription is an important demographic indicator for advertisers and for publishers who make the majority of their money from these advertisers. In the world of affiliate marketing you can think of this as traffic quality. High quality traffic converts better then low quality traffic and is therefore more valuable. In publishing, the amount a subscriber is willing to pay to get the magazine every month is directly correlated to the quality of the subscriber in the advertisers eyes.

Is this why you do not offer coupons?
Yes. In order to stick to the publishers pricing guidelines we may not offer coupons at this time. We are working with the Audit Bureau of Circulations to see what types of promotions may be allowed.

So how can other site make money selling for such a low price?
When a publisher needs to increase their circulation they will lower the wholesale cost (remit) to the agents to give them more marketing dollars to spend on things like direct mail, telemarketing, and affiliate commissions but they expect the agent to maintain their price. What illegal agents will do is they simply try to lower the price to under-cut a legitimate company like ours. Another example is that they will sell a magazine subscription on eBay for 25% lower then the authorized price and then process the order through an affiliate program like ours and pocket the difference between their discount and commissions. Our agreement prohibits this behavior as it jeopardizes our relationship with publishers, which is not acceptable. There are many ways to "clear" a magazine subscription by not playing by the rules.

What are publishers doing about rogue agents?
Different publishers are handling the situation differently. Some are writing Cease & Desist Letters to the site operators and their affiliates. Others are going so far as to use the Millennium Digital Copyright Act to file legal suits against these agents. We suspect that this will become the preferred tool of choice as it carry's a minimum mandatory fine per copyright violation. Since these agents are not authorized directly by the publish or any legitimate extension thereof they do not have the right to use the magazine covers.

Do you have any good industry resources that I can read online?
State of Online Sub Sales- FEB 2004 (http://circman.com/ar/marketing_state_online_sub/index.htm=)
The Untapped Potential of Online Sub Sales - JAN 2004 (http://circman.com/ar/marketing_untapped_potential_online/index.htm)
Cut-Rate eBay.com Subs Irk Circulators - JUN 2002 (http://circman.com/ar/marketing_cutrate_ebaycom_subs/index.htm)
Publishers Ineffectual at Taming the Wild, Wild Web - NOV 1999 (http://circman.com/ar/marketing_publishers_ineffectual_taming/index.htm)
Policing the Net: Publishers Crack Down on Online - DEC 1999 (http://foliomag.com/mag/marketing_policing_net_publishers/index.html)
Magazine Publishers of America Site (http://www.magazine.org/home/)
The Audit Bureau of Circulations (http://www.accessabc.com/)

If you have any other questions please post them here! And of course one last question.....

How can I join your program and start earning 40%-60% on magazine sales? http://abw.infopop.cc/infopop/emoticons/icon_biggrin.gif
By Clicking Here (http://www.usubscribe.com/befree/befree.cfm)

[Nova]

Good information! Thanks!

Where can I sign up?

Time to get those links up!

[Drewbert]

So there's some sort of price-fixing cartel racket going on here? :^)

[rhkocatas]

Don't joke..there are people who say exactly that! The way the publishers view it we are not resellers of their product (meaning that we don't buy inventory and then have to sell it) but rather are their agents. We have about as much flexibility on pricing as a travel agent does...best we can do is help you find a magazine with similar content for less money.....GO JET BLUE!

[Spencer]

How many of these subscription agents sell customer names to mailing lists? Is this a big part of their income? I've wondered about this and the "free" magazine subscriptions, as I recently bought a package deal for the family. A couple of other magazines were thrown in as well. Sure enough, two days after receiving one of my bonus magazines, I received some junk mail that pertained to the same topic as one of those particular mags. Thanks

[rhkocatas]

No figures are available as to how many agents sell names but it happens quite often. Don't know who you bough your package through but don't forget that list rentals are a BIG part of the magazine publishers model. If you started getting email spam then it was the agent you bought from. If it was snail-mail it could have been either.

We do not currently sell name and address information and we will NEVER sell email information.

One more thought....Snail Mail List rental is not just part of the magazine business but just about every business. Nice thing is that the price of a stamp usually keeps it from getting anywhere out of control. If I got as much snail-mail junk as I do spam my postman would have a hernia!

[Spencer]

Yeah I pretty much take it for granted that any time I get a magazine subscription, I would be getting all kinds of offers in the mail. One of my favorite was shortly after I subscribed to The Dupont Registry of Fine Homes, I was receiving all kinds of solicitations for Lear Jet Leases and $50,000 cruises. Guess they thought I actually had the money to buy the homes listed in the magazine!

[northernstudio]

Recently I received a cease & desist notice from Bowtie, Inc. concerning my links through netMagazines.com. Some of the titles : Cat Fancy, Dog World, Dog Fancy. 15 titles in all.

Before replacing these titles by signing up with uSubscribe, I contacted the circulation manager to make sure that you are not a "rogue agent" as you put it. The response:

"I do not have uSubscribe.com as an authorized agent (they may be submitting orders through authorized agent)."

So what's the scoop? You offer these titles through your site. Is it safe use links to these titles or would I receive another C&D notice? Are you a "rogue agent" also or are you channeling orders through an authorized agent?

Thanks.

Wayne

[kkcoolj]

Hey, why not put a modified version of the FAQ up on the main website? It would be good to educate the customer...

[rhkocatas]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Reha -
Is uSubscribe.com authorized? -- YES!
Yes. We are fully authorized to sell the titles we carry and furthermore we are authorized to sell them online. While we do not maintain authorizations directly with the publishers we fulfill our orders through a company called MSC (Magazine Subscription Center) in Tennessee. This company also handles all credit card processing and customer service for us.
<HR></BLOCKQUOTE>

Per my original post we do not have our own relationships but we clear through our partnership with MSC (who is authorized for Internet Subscription Sales) which is the parent of Magazines.com. I promise you if you contact them again and ask them if Magazines.com is authorized they will say yes.(In fact if you do talk to Bowtie again please feel free to post their answer here). I should also add that all of our private label partners would also not be known to the publisher as authorized. The way that publishers issue C&D orders to rogue agents is that they place orders on the sites to see how they are "cleared" or fulfilled. If they find the source unauthorized then the C&D is sent.

I know that your next question is going to be Why are you not directly authorized?". Well in simplest terms it is more cost effective for use to use this third-party and we find that they create a better customer experience as they provide us with additional services such as customer service, credit card and check processing, cover scanning and much more. As long as they continue to offer compelling economics, we will continue to use such third party aggregators (Note that even Amazon.com which now sells magazines uses a similar clearing arrangement with Synapse, a division of AOL Time Warner, to fulfill their orders)

So in anticipation of your third question, "Then why shouldn't I just join their program?", my answer is that we view ourselves as a technology platform for magazine subscriptions that is designed to provide affiliates with all the tools they could need to promote magazines. We place a tremendous amount of effort in our program and I think you will find that most of our affiliates are with us because of our high conversions. We of course welcome you to try their program (otherwise we would never mention it here) and compare your results.

I hope that makes you feel more at ease in doing business with us. Feel free to fire away any additional questions either here or via PM.

Reha

http://66.132.187.8/smilies/idea.gifMaybe this concept is worthy of its own thread?

[northernstudio]

Thanks for the response, Reha. As the circulation manager at Bowtie suggested you might, you do submmit orders through an authorized agent. In fact, though I didn't note it previously, she mentioned several companies that they recommend, one of which is the one you use to clear orders for their publications.

Thanks again for the clarification.

Wayne

[Andy Rodriguez]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by NorthernStudio:
Thanks for the response, Reha. As the circulation manager at Bowtie suggested you might, you do submmit orders through an authorized agent. In fact, though I didn't note it previously, she mentioned several companies that they recommend, one of which is the one you use to clear orders for their publications.

Thanks again for the clarification.

Wayne <HR></BLOCKQUOTE>

Wayne, if you ever have any questions, be sure to ask us, we will be happy to present all our authorizations. We want all of you to promote with confidence and not be worried about cease and desist letters....

[rhkocatas]

Recent article on this subject.

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> Rogue Sub Agents Are Getting Away with Murder, Speakers Say
By Barbara Love
Unauthorized agents are still selling subs and getting away with it, according to panelists at the Circulation management Conference & Exposition.

"I was astonished to find out the extent to which people are running around selling subs and getting away with it," said Jill Meyer Vollman, attorney, Frost Brown Todd. "They are selling on different terms and conditions and attaching all kinds of bells and whistles publishers didn't or never would have agreed to, and somehow getting away with it." She found it puzzling.

How is this happening?

"Simply because they are getting away with it," she said. "They are getting away with it because there is layer upon layer of different people involved, and a number of people in the chain and that makes it very difficult to ever track down how a rogue agent has been selling your title for three years and you never knew about it."

Time Inc. has been able to deal with the problem. So, to a lesser extent, has Hearst. But smaller publishers do not have the time and resources to track down and shut down the unauthorized agents.


Attorneys General aren't cracking down for several reasons. Why? The amount of money is too small, they expect others to do it, or they are too busy with do-not-call legislation, speculated Vollman.

The Federal Trade Commission is aware of the problem, according to Vollman, but is not doing anything for one of two reasons: Either it doesn't realize it is a nationwide problem or chooses to leave it to the states.

'I can see I did the right thing when I eliminated all my agent sources because I just couldn't deal with fraudulent agents," concluded Janet Leigh Dick, circulation and marketing director for New Mexico magazine.
<HR></BLOCKQUOTE>
Click Here for Original Souce (http://circman.com/ar/marketing_rogue_sub_agents/index.htm)

[rhkocatas]

Rogue Agents: What Can Small Pubs Do? (http://circman.com/ar/marketing_rogue_agents_small/index.htm)

by Barbara Love


Unauthorized agents plague both large and small publishers. But small publishers have a much harder time dealing with the problem.

Take Claretian Publications, publisher of U.S. Catholic. The firm was victimized by a rogue agent operating out of Oregon under several names, according to promotion manager Chuck Rash.

Rash chased the operation down “five or ten� times, but had no luck stopping the practice. Then the same people moved to California and started the same practice there. “Everyone is after them,� Rash said.

He added: “We contacted them and they were extremely arrogant. They have had to have gotten the list from one of our renters, but we are careful who we rent to. We didn’t do anything legal because this doesn’t go anywhere. I was with a publication before and we sued. The attorney general said ‘Join the crowd.’�

These agents are all over the place, according to Rash. There’s another one selling his publication, U.S. Catholic, out of Colorado.

Some agents have become very bold. Instead of using an agency name to sell, one is now using the magazine name as the source.

“By using U.S. Catholic, they really give the impression the offer comes from us,� Rash said.

Rash responded to the agency, which offered him U.S. Catholic at $17.00, when the authorized price is $22.00. He also received an offer to subscribe to People magazine, presumably from People, but upon calling he found out he was talking to an agency that offered him any one of 500 magazines at discounts.

“Can you tell us what we can do to stop them?,� he said. “We’re just a small non-profit magazine.�

“It is tough on the smaller publishers,� acknowledged Jill Meyer Vollman, attorney with Cincinnati-based Frost Brown Todd, who has been working on this problem for a number of publishers. “It takes a lot of extra time, but there are things that can be done.�

Monitoring is the key to controlling rogue agents, she said. “A publisher has to closely monitor who is on their authorized list and make sure that the agents they are using watch who’s authorized. Everyone in the chain has to have communication about who is allowed and who is not allowed in.�

Even fulfillment has to know--although ideally the order should be eliminated before it gets that far.

The bottom line is: “Make sure everyone stays on top of it.�

Vollman continued: “If agents accept non-authorized subscriptions from sub agents, they have to be called on that. A lot of publishers have narrowed the list of agents they use. They will not deal with agents who will not weed out unauthorized sub agents.�

There is some resource for publishers who feel they have been hurt by I.C. Marketing out of Oregon, Vollman related. That company settled a lawsuit with Oregon attorney general Hardy Myers (See CM August issue p.14). On the Oregon attorney general’s Web site there is a description of the written decision that defines the limits for that agency.

“I.C. agreed to certain terms,� she said. “If that company is not following the agreement, a publisher could contact the attorney general.�

“That’s good to hear, but these people that have been selling unauthorized subs for our magazine moved to California,� said Rash.


Original Article Here (http://circman.com/ar/marketing_rogue_agents_small/index.htm)

[rhkocatas]

Below is an article regarding the fallout from unauthorized agents. Be sure that any program you promote is authorized. The article is from Circulation Management Magazine. Due to the construct of their urls I could not post the url here but you can find the article by going to www.circman.com


Agent Documentation Issues and Rate Base Miss at G+J
BY: MEGHAN HAMILL AND KRISTINA JOUKHADAR

12.01.05
--------------------------------------------------------------------------------

G+J USA announced today that an independent subscription-selling agent, Publishers Communication Systems failed to provide sufficient documentation of payment...


G+J USA announced today that an independent subscription-selling agent, Publishers Communication Systems of Coral Springs, Fla., failed to provide sufficient documentation of payment for a number of G+J titles in the second half 2003 and early 2004, causing ABC to reclassify 165,000 of its 2003 subscriptions as "non-paid."

Because of this reclassification, Parents and Child will miss rate base for the second half of 2003 by 0.82 percent and 2.7 percent respectively. G+J’s other titles were affected too, but the rate base guarantees did not fall below the promised numbers in 2003.

Cindy Still, executive VP consumer marketing, who joined G+J in March 2004, says that after the company's bad audit experience last year, G+J has set very high standards for itself and for the industry going forward. It has taken this opportunity in particular to be proactive--announcing the audit problem to the press in advance, calling 150 of its advertisers to personally inform them of the problem, filing a lawsuit with PCS, and setting an example for other circulators.

The 2004 subscription orders will be reviewed with the ABC, with further plans to release more information by the end of February. Many of G+J's titles are expected to fall short of their rate bases for 2004, for example Parents, by 3.4 percent; Child by 9.9 percent; Family Circle by 2.8 percent; Inc. by 3.8 percent; and Fast Company by 2.5 percent. The company has initiated subscription marketing activities to replace the reclassified subscriptions.

In an effort to give PCS an incentive to increase sales of subscriptions to G+J magazines during 2003, PCS was offered a promotional payment for each individually-paid subscription procured by PCS on certain G+J titles. The terms of the agreement stated that PCS had to confirm all paid subscriptions to G+J and ABC with appropriate documentation.

Stevens and PCS reported and represented to G+J that PCS and its subagents had sold in excess of 400,000 individually paid subscriptions to G+J magazines, and submitted invoices claiming in excess of $725,000 in promotional payments for 2003.

During ABC’s audit of G+J's 2003 circulation figures, PCS was asked to provide documentation that the subs were ordered and paid for by individuals. When the company could not supply the documentation, ABC reached the conclusion that the majority of subscriptions submitted by PCS were not individually paid within the meaning of ABC's rules.

Ramifications for Other Consumer Pubs
It is unfortunate that ABC uncovered the PCS problem first at G+J, because the company has already had more than its share of audit problems last year, for example with Rosie. But beyond that, the audit results represent a much bigger problem--one that could cause rate base shortfalls for virtually every ABC-audited publisher who uses agents.

One consumer circulator who has used PCS as an agent for years, estimates that less that one percent of their subs have come from PCS. This circulator estimates that from 1/2 to 1 percent of all ABC-audited circulation may, at this time, come from PCS.

“The sad fact is, this is not something a publisher could have controlled. An agent is authorized to sell subscriptions and collect money for them.” What is still missing, says this circulator, is communication from ABC to say what documentation is required to qualify an order as paid through a sub agent. “You can’t demand the documentation if you don’t know what you want from them. We need a statement in writing from ABC.”

This circulator went on to say that the audit bureau is requiring from companies like PCS and other sub agents, to provide them with the same kind of easily verifiable documentation as a fulfillment company would.

But PCS doesn’t have the same facility as a fulfillment company to tie an order back to a specific customer and when they paid, what specifically they paid for (possibly not one, but five subscriptions), and they can’t account for the balance in the same way.

[kkcoolj]

If I'm not mistaken, it is now (or has been) required for all agents and sub-agents to be "registered" to sell Time Inc titles -- more stringent than some other publishers. In addition, a W-9 must be filed for each agent/sub-agent entity as well.

Could you confirm this? And if so, how are affiliate and private labels being addressed in this scenario?

Thanks!

[rhkocatas]

KK:

Time does require this registration. Private labels (and affiliates) are not considered Sub Agents as they do not collect any money from the customer. If you were doing the credit card merchant processing you would need too be registered.

Reha

[kkcoolj]

Thanks for the answer! And to confirm, Magazine-Agent.com *IS* registered as an official agent/sub-agent?

[kkcoolj]

Also, do you know anything of the cesure by the ABC of Synapse a couple of months ago due to violation of rules?

[rhkocatas]

Magazine-Agent is registered as a sub-agent.

ABC (The Audit Bureau of Circulations) is now going back to all agent sources and auditing subscriptions. An audit typically consists of picking a group of subscriptions and requiring the agency to show the original credit card transaction that charged the customer so that it proves they paid full price. If they cannot produce proof then the subscriptions are counted (for advertisers) as unpaid.

Don't remember the specifics regarding the Synapse censure. What I do know is that it was lifted last week.
http://www.accessabc.com/press1/ma0305.htm

[MichaelColey]

The customer doesn't have to pay full price to be counted as a paid subscriber, do they?

http://www.accessabc.com/bylaws1/bylaw2426_1.htm#F11
Article 1. F. 1. 1.

"(b) Subscription Sales: On term order for any period the subscription must be paid for at not less than one cent."

[rhkocatas]

Michael:

That is only part of the definition. You should continue to read the rest of that same link with respect to pricing. In the most general terms publisher's guarantee two datapoints to advertisers, (1)Circulation/Rate Base and (2)Minimum Average Price.

Lets make up a SIMPLE example of a golf magazine that has Calloway as an advertiser. This golf magazine guarantees Calloway a rate base of 1,000,000 readers and an average and a minimum average price of $12 per year/subscription.

If after ABC audits the books they find that more then 1% (or 10,000 subscribers) paid less then $12 then those subscriptions are dropped from the rate base. Lets say that 25,000 subscriptions were sold at $10. (Note this counts even if the magazine is listed at $12 and the customer has a coupon for $2 off). Calloway would now be entitled to a refund as the magazine did not meet its required goals with respect to the reach of its advertising. This refund may be equal to the proportionate shortfall or 2.5%

This seems to be what is happening at G&J.