---------- Forwarded message ----------
Date: Fri, 26 Jan 1996 13:21:55 GMT
From: Keith Renwick <KDRENK@FS3.LI.UMIST.AC.UK>
Subject: JOURNALS INFLATION

One aspect of the journal inflation problem has not, as far as I am aware,
been investigated or costed, yet is fundamental to the situation in which
librarians find themselves.

Each year an unspecified number of libraries cancel journal subscriptions,
often the more expensive titles (partly because savings are easier to
achieve with the minimum amaount of effort). It also seems to be the case
that the more expensive the journal, the higher the increase in
subscription price. Is this due to the fact that more expensive titles
have higher overheads or are published by the multinationals?

An undisclosed proportion of our subscription increases are due to
cancellation of subscriptions and the increased unit costs which ensue
from that. Faxon have indicated in their recent projection for 1997
subscriptions that cancellations will account for around 4.5% of
subscription increases next year. Has anybody projected this for a few
years ahead to calculate the increasing cancellation element of
subscription price increases?

As a simple example:

A title costing stlg1,000 may have a subscription base of 100, of which 5
may decide to cancel due to lack of funds, etc. Of the subscription price
(including profit) 80% of costs are estimated to be fixed, which amounts
to 1000 x 5 x 80% = 4000.

This will have to be divided among the remaining subscription base of 95
libraries, adding stlg42.10 (4.2%) to the price.

The following year the price will be stlg1042 (I have ignoring additional
price increases) resulting in another 5 cancellations and no new
subscriptions, therefore 80% of those costs will have to be recouped from
only 90 libraries as follows:

1042 x 5 x80% = 4168 divided by 90 = stlg46.31(4.6%).

The point is that within 5 years, assuming five cancellations each year,
no new subscriptions and no other increases, the subscription cancellation
element of price increases will have increased from 4.2% to 6.3%.

I haven't projected these figures any further, but I'm sure the picture is
obvious.

Would any publisher care to produce a figure for subscription cancellation
increases on particular titles? I await the figures with interest!

Keith D. Renwick,
Head of Technical Services & Administration,
UMIST Library & Information Service,
P.O.Box 88,
Manchester M60 1QD.
Tel : (44) 161-200 4940
Fax : (44) 161-200 4941
E-Mail : K.Renwick@umist.ac.uk