---------- Forwarded message ----------
Date: Wed, 17 Jan 1996 15:59:24 -0400
From: Teri Harrison <HARRISON@FAXON.COM>
Subject: Faxon's 1997 Preliminary Subscription Price Projections
January 1996
The Faxon Company has released the following 1997 Preliminary Subscription
Price Projections. And for those of you attending ALA Midwinter in San
Antonio who are interested in subscription pricing trends, please consider
attending Faxon's popular Pricing Trends Seminar on Sunday, January 21,
1996 from 1:30 to 2:30 p.m. in the San Antonio Convention Center, Room
204. For a printed copy of the following projection, stop by Faxon's
booth #353 any time during exhibit hours.
Faxon's 1997 Preliminary Subscription Price Projections
Based on the latest information on publisher price increases, world
economic conditions, and the current and projected values of the US
dollar, Faxon is projecting the following changes in journal subscription
prices for 1997 subscriptions
Please note that these are preliminary projections based on current
conditions and are subject to changes as the year progresses. We are
projecting an approximate overall increase of 9.3 percent for a typical
collection. This estimate is based on our expectation that a strong US
dollar will keep increases for European journals below 10 percent.
North Continental
America Europe U.K. Other
General Inflation 2.8% 2.5% 2.1% 2.0%
Publishing Factors
Paper 0 0 0 0
Postage 0 0 0 0
Page/Volume Increase 3.0% 3.5% 3.5% 2.0%
Cancellations 4.5% 5.0% 4.5% 3.0%
Currency 0 0 to -3% 0 to -3% 0
TOTAL 10.3% 8.0 to 11.0% 7.1 to 10.1% 7.0%
TYPICAL COLLECTION INCREASE*
% of Budget $ x Increase = Total
North American 60% x 10.3% = 6.18
Continental Europe 25% x 8.0 to 11.0% = 2.0 to 2.75
U.K. 10% x 7.1 to 10.1% = 0.71 to 0.10
Other 5% x 7.0% = .35
TOTAL INCREASE 9.24 to 9.38%
* To determine the overall increase for your own collection, multiply the
% of Budget $ of your collection for each category above by the Increase
listed and add the resulting numbers, as illustrated above.
Key Assumptions
Paper and Postage: We do not expect any direct increase due to either of
these factors for 1997. In fact, paper prices will probably be lower.
Page/Volume Increases: Increased manuscript submissions and pressures to
publishers will continue to increase publishersU costs, even with more
stringent publication criteria. We are estimating 3 to 3.5% increase for
this.
Cancellations: Subscription cancellations and shifts to other
technologies will continue to be a major factor in publishers'
price-setting decisions. While we did not generally see massive library
cancellation projects for 1996 subscriptions, the gradual erosion of
subscriptions continues to affect publishersU costs in a direct way. We
will be better able to provide a more accurate estimate of this factor
later this year, once publishers have completed their analysis of their
1996 orders and cancellations.
Currency: We expect the US Dollar to remain stable or stronger through
1996. Many analysts believe that 1995 marked the end of a ten-year
downward trend for the US dollar. Sustained moderate economic growth, low
inflation, the prospect of a balanced budget and a strong influx of
foreign investment will all help the dollar.
At the same time, European countries are likely to cut their interest
rates to spur sluggish economies, and Germany, in particular, will likely
try to keep the Mark reigned in for the benefit of the European Monetary
Union. These factors will also contribute to a stronger dollar.
For the purpose of this very early projection, we are therefore projecting
that the US dollar will remain at least as strong as in 1995 and could
possibly strengthen further through the year. This will mean that US
libraries should see no increase due to currency exchange for 1997
subscriptions. In fact, if the dollar does strengthen, it is possible
that the currency effect will be positive, offsetting the base price
increases.
