Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Inventory management
Reexamination Certificate
1999-11-09
2003-03-18
Rice, Kenneth R. (Department: 3627)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Inventory management
C705S014270, C705S016000
Reexamination Certificate
active
06535857
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention generally relates to the distribution of periodicals, and more particularly to a method for distributing a periodical in such a way that new subscription orders are filled quickly.
2. Discussion of the Related Art
It has been reported that each year over one billion single-issue copies of magazines are sold through over 165,000 retail points of sale in the United States. As is known, the cost of a single issue, or the “cover price,” is often as much as four times higher than the pro rata price of a single issue through a subscription. Despite the higher prices, consumers are often willing to purchase single issues from retail outlets because of convenience and timeliness.
However, some consumers decide to forgo the advantages of newsstand copies and purchase longer-term subscriptions to periodicals. There are a wide variety of well-known methods for subscribing to a periodical. For example, if a consumer wishes to subscribe to a magazine, the consumer may purchase a single issue at a retail outlet and mail back a “blow-in” or “bind-in” card enclosed in the magazine issue. Publishers place blow-in subscription cards by loosely inserting the cards into periodicals, such as magazines, using a method of air injection. Publishers insert bind-in cards into the periodicals by, for example, binding subscription cards into issues during the printing process. Publishers, acknowledge that these subscription cards are the most profitable means for the publisher to gain circulation. Nevertheless, various shortcomings arise from the traditional methodologies, which do not promote, and in fact hinder, consumers of single issues from subscribing to the periodicals.
One such shortcoming involves lost revenues to the retailer. Retailers carry single-issue periodicals predominantly for impulse purchases. However, if a consumer purchases a single-issue periodical at a retail outlet and then subscribes to the periodical by a blow-in or bind-in card, the retailer earns no additional revenue from the subscription. In addition, subscription cards contained in retail copies encourage consumers to buy a subscription that deprives the retailer of potential revenue from future single-issue sales to that consumer. Thus, retailers have no incentive to encourage purchasers of single issues to purchase subscriptions.
Several other shortcomings affect the consumer. For example, the initiation of a subscription by a blow-in or bind-in subscription card requires much time and patience on the part of the consumer. Such a subscription frequently takes weeks for processing. Indeed, federal rules require, when appropriate, that magazine publishers denote a waiting time disclaimer: “Allow 4-8 weeks for your first issue to be mailed.” In addition, due to processing and delivery delays, the consumer may not actually receive the first issue of the magazine for ten to twelve weeks from the date of subscription. The uncertainty of when the first issue of the subscription will arrive often results in missed issues. In addition, purchasing subscriptions using subscription cards creates a risk of loss to the consumer because the consumer must deposit the subscription card in the mail, after which the consumer often has no record or invoice of the transaction.
Still other shortcomings for the consumer arise from the method of payment. Payment under the traditional subscription method constitutes an inconvenience for the consumer because the only way to enclose payment with a blow-in or bind-in subscription card requires that the consumer enclose the card and payment in an envelope with accompanying postage. Even if a toll-free number is provided for initiating the subscription, the call itself inconveniences the consumer. Furthermore, if payment is not made at the time of ordering, a two-step process is required: first, the submission of the blow-in or bind-in card, and second, the payment of a bill. This two-step ordering process is not only inefficient but also wastes the consumer'valuable time. Furthermore, when paying the bill, the consumer must again correspond with the magazine publisher, paying an invoice by check and returning the payment by mail. Due to processing and delivery delays, the consumer may even receive multiple invoices of the bill, even though payment has already been made. These incidents of inefficiency not only inconvenience the consumer and increase the costs and efforts of the magazine publisher, but also may jeopardize the goodwill of the magazine in the consumer'mind.
Another shortcoming for the consumer, regarding the method of payment, relates to the inability to pay with cash. There is presently no ready means for a consumer to subscribe to a periodical and pay with cash, except for the enclosure of cash in the mail, which is discouraged. The transmittal of cash in the mail, however, presents a threat of loss. Indeed, even the United States Postal Service warns consumers against sending cash through the mail. This inconvenience is particularly meaningful because some consumers may not wish to pay for a subscription to a controversial magazine by check or credit card, as these forms of payment serve as records of the transaction.
Still another shortcoming for the consumer in dealing with the method of payment involves the cost of the initial single-issue periodical. If a consumer subscribes to a periodical by responding to a blow-in or bind-in subscription card, the consumer loses the benefit of paying the lower subscription price for the first issue. Normally, the consumer initially purchases the single-issue periodical at full price, after which he pays the discounted price for the subscription. Thus, even when the consumer chooses to subscribe to a periodical following a single-issue purchase, the consumer always loses the initial investment of the purchase price of the single issue.
Yet other shortcomings affect the periodical publishers. Under the traditional subscription methodologies, publishers suffer reduced subscription revenues from consumers who might have purchased a subscription at the time they purchased the single-issue periodical at a retail outlet. Because the sale of periodicals at retail outlets depends primarily upon impulse sales, the inability to initiate an instantaneous subscription is believed to reduce subscription volume for periodical publishers. Also, outside the retail environment, a consumer may subscribe to a periodical in response to direct correspondence or indirect solicitations through the mail, telephonically, or through electronic means, such as e-mail. Nevertheless, under these circumstances, due to processing and mailing delays, the consumer still has no access to the current issue of the periodical, and the publisher loses these single-issue sales.
There have been various attempts to overcome these and other shortcomings. Indeed, U.S. Pat. No. 5,926,796 (hereinafter the '796 patent) alleges that various “attempts” have been made to solve the problems associated with initial periodical subscriptions. One attempt described in the '796 patent involved the sale of gift subscriptions at retail outlets. The consumer could purchase a box containing a gift card to be sent to the recipient, a magazine activation card to be sent to a processing center, and the envelopes for both sets of cards. The consumer would send the gift card to the recipient and the activation card to a processing center. The retailer would retain a percentage from the purchase price and remit the balance of the payment to the processing center. Upon receipt of the activation card from the consumer and the payment from the retailer, the processing center would take a percentage from the payment and forward the card and the balance of the payment to the magazine publisher.
This attempt allegedly fails to even address, much less overcome, the inconveniences associated with the traditional subscription methodologies. For example, this attempt provided no solution for the lengthy processing time req
Clarke, III James O.
Crook Tom
Kramer James
Magazines.com, Inc.
Rice Kenneth R.
Thomas Kayden Horstemeyer & Risley
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