Method and system for managing magazine portfolios

Details Method and system for managing magazine portfolios Method and system for managing magazine portfolios

1999-07-30

2001-12-18

Cosimano, Edward R. (Department: 2161)

Data processing: financial, business practice, management, or co

Automated electrical financial or business practice or...

C707S793000, C707S793000

Reexamination Certificate

active

06332124

ABSTRACT:

FIELD OF THE INVENTION
The present invention relates generally to enabling a consumer to service multiple magazine subscriptions previously purchased through different publishers and sources and, more particularly, to a method and a system of automatically organizing subscriptions and subscription information by household.
DESCRIPTION OF THE RELATED ART
The magazine industry is old (200 years and counting), diversified and large. The industry will generate roughly $25 billion in sales this year from the sale of advertising, single copies on the newsstand and subscription sales. This year, Americans will purchase over 300,000,000 subscriptions and spend $8 billion to buy them. Using the broadest of measures, there are over 3,000 magazines published, although only about 600 are tracked by trade organizations such as the Audit Bureau of Circulations (ABC).
The industry is diffuse in other ways too, such as the ways it sells and services subscriptions. Subscription services are typically outsourced to third party subscription providers who warehouse subscriber (i.e., consumer) names; manufacture mailing labels; print, mail and process renewal notices and bills; and provide consumer service.
Similarly, publishers often outsource subscription marketing. Today 60% of all new subscriptions are provided by third party marketers known in the trade as subscription agents or “agents”. Typically, the agent is allowed only to sell the initial subscription and is required to “turn over” the consumer to the publisher for renewal. It is also the trade practice to require the seller to handle related consumer care. Thus, were a consumer to Time Magazine, who bought her subscription through Publisher Clearing House (PCH), to direct a service complaint to the publisher—Time, Inc. (Time), Time would likely refuse service to that individual and instead refer that consumer back to the subscription provider. While the remedy appears draconian, the rationale is grounded in logic. Time does not share subscription data with PCH; does not have a system link to PCH; and PCH, for its part, returns the courtesy and shares only essential subscription data.
This is not the only area where the magazine industry under-serves the consumer. Magazines will mail 7, 10, even 15 renewal notices and place phone calls starting only weeks after someone subscribed and not ending until months after the subscription was cut to badger consumers into renewing. They will also send multiple dunning notices to pester consumers to pay for the renewal bought on credit. The refusal to service consumers and the oppressive renewal and billing process results in an enormous inconvenience for consumers in managing their portfolio of magazines.
On average, each American household enjoys three subscriptions to Time, Sports Illustrated, National Geographic or to any one of hundreds of other well-known magazine brands. But like any product, consumption follows a bellshaped curve. Only 20% of American homes subscribe to no magazines, but over 10 million subscribe to 7 or more. When we multiply all the foregoing renewal notices and bills by the average number of subscriptions, the average American home receives over 30 reminders annually from publishers. Heavy readers can receive more than 100!
The renewal and billing process creates more confusion for the consumer. It has a significant effect on their magazine experience. Renewals and bills are mailed at such a furious pace that consumer responses and publisher solicitations will cross in the mail even if consumers respond the first day they get a renewal notice. It is not unusual for a consumer to discover that he paid for a subscription years into the future. What if consumers wanted to reduce their subscriptions or correct an overpayment? They would have a difficult time fixing it. Call the publisher? Publishers publish everything but their phone number. Call the publishers' outsourced service bureaus? Only if you bought the subscription directly from the publisher. If the consumer purchased one of the tens of millions of subscriptions that are bought each year from a subscription agent, the service bureau would refuse to serve the consumer.
The “system”, as it exists today, is oppressive and confusing for the consumer. The return rate in the publishing industry is abysmally high—a tribute not to the quality of their products but the malignance of their marketing proposition. The “system” is also much more costly than it needs to be. On a net renewal subscription basis, publishers spend roughly 30% of what they collect on retention promotions. That is many, many times higher than for credit cards, cable television, home delivered newspapers, or online services.
The Audit Bureau of Circulations (ABC) serves as the magazine industry “referee”, counting the magazine sales that count toward a publisher's rate base. A publisher's advertising revenue is based on its rate base. A sale or renewal qualifies to be counted toward a publisher's rate base if the dollar amount committed from the consumer exceeds half of the publisher's established price known as the basic rate. Thus, for every sale above the half basic rate, a publisher benefits as that subscription is counted towards the rate base.
Purchases above the half basic rate can also benefit the consumer. As established by ABC, dollars committed by a consumer in excess of the half basic rate in a qualifying multiple-subscription purchase can be applied to one or more additional subscriptions at no extra cost. For example, if a consumer pays full basic rate for two subscriptions (e.g., $30 each or $60 total), then the consumer is entitled to an additional subscription having a half basic rate equal to that of the paid subscription to a maximum of amount paid in excess of the collective half basic rate (e.g., $30). Thus amount in excess of the half basic rate is applied to meeting the half basic rate of the additional subscription. Because ABC views a multiple subscription purchase or renewal as a single event, when a consumer purchases multiple subscriptions, the amount in excess of the half basic rate for each subscription may be aggregated and applied to one or more additional subscriptions. In the magazine industry vernacular, such additional, subscriptions available at no extra cost are known as “add-ons”.
While add-ons provide some level of an incentive for consumers to purchase subscriptions, add-ons are not broadly available. Because a consumer purchases and renews subscriptions through many different sources, the consumer is often unable to accumulate in a single event enough dollars in excess of the half basic rate to qualify for an add-on. Additionally, consumers typically do not know they are entitled to add-ons and, therefore, do not press for them. Consequently, a need also exists for an improved method and system for providing consumers with the incentive to purchase and renew subscriptions.
SUMMARY OF THE INVENTION
The present invention satisfies the foregoing needs. In one embodiment of the present invention, magazine subscription information is collected from one or more fulfillment houses. The collected subscription information is organized or associated together by household. In another embodiment, the organized subscription information is made available to a consumer of a particular household so that the consumer may make changes to all subscription information associated with the household. In yet another embodiment, the consumer associates a credit card or other account with the household subscription information, and the account is charged for the household subscriptions.


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