PRESS RELEASE
FROM: Laura Ralstin
EBSCO Subscription Services
Corporate Communications
(205) 991-1492
Updated Price Projections for 1997 Subscriptions
Birmingham, Ala. U.S.A. -- Recent world events affecting currency
markets have changed the outlook on 1997 journal subscription prices
for buyers in several countries. Since EBSCO's preliminary projections
in February, projected prices for U.S. journals have increased for
subscribers billed in British pounds, Dutch guilders, French francs,
German marks, Spanish pesetas and South African rands. Projected
increases for European journals will be higher than last projected for
subscribers paying with German marks and South African rands and lower
for those paying with Canadian dollars, Italian lira and U.S. dollars.
Major events that are currently affecting currency markets include:
(1) The changing political landscape in Great Britain, resulting from
the Conservative party's loss of a large number of seats in Parliament,
has contributed to the pound's decline of approximately 3 percent
against the U.S. dollar as compared to its value when publishers were
paid last year. The pound's value remains stable against major European
currencies.
(2) An interest rate cut by the German central bank along with
continued uncertainty about Germany's economy (e.g., unemployment is at
a post-World War II high) and the country's ability to meet monetary
union criteria have caused the mark to lose ground to the U.S. dollar.
(3) Political changes in South Africa and resulting uncertainty
regarding the direction of the country's monetary policy caused the
rand to hit a record low in May. The rand remains weak against all currencies.
(4) Recent elections and expected changes in Australia's fiscal policy
have caused the Australian dollar to surge against the U.S. dollar and
most other currencies.
(5) The U.S. dollar is gaining strength, due in part to changing
outlooks on the strength of the U.S. economy, which eliminated pressure
that might have been on the Federal Reserve to lower short-term
interest rates. Additionally, the establishment of a republican
presidential candidate and presumed outcomes for the 1996 election have
contributed to the stronger dollar. However, increasing inflation fears
could slow or reverse the dollar's strengthening trend.
Publishers have indicated to EBSCO that base price increases will be
slightly lower for 1997 subscriptions than they were for 1996
subscriptions. (The base increase is the increase in the price of the
subscription without regard to the effect of currency conversion when
the subscription is bought by a subscriber in another country.) Based
on information received from publishers during the first half of this
year and on historical price increase data, EBSCO projects a base
increase of 9 to 11 percent for 1997 subscriptions.
Ultimate price increases always depend on the value of the currency in
which subscribers are invoiced as compared to the currency in which
journals are priced when publishers are paid for the next year's
subscriptions.
Projections by subscriber billing currency
Projected increases for libraries and organizations invoiced in various
currencies are listed in the box on the next page. For U.S. journals,
projections are based on the estimated base price increase of 9 to 11
percent and the current, relative value of the customer billing
currency compared to the U.S. dollar.
For European journals, projections are based on the estimated base
price increase of 9 to 11 percent and the current, relative value of
the customer billing currency compared to that of the local currencies
of major European publishing centers.2 Ranges shown are for European
journals published outside the corresponding country for each billing
currency (e.g., the projected increase for customers invoiced in
British pounds does not apply to U.K. journals).
Mid-May exchange rates were used for these projections.
Conservative budgeting
As always, EBSCO recommends all customers add 2 to 5 percent to the
estimated price increases for non-domestic journals to protect their
budgets from a weakening of the currency in which they are invoiced
between now and when subscription rates are set or publishers are paid.
PROJECTED PRICE INCREASES BY CUSTOMER BILLING CURRENCY
Customer Projected Projected
Billing Increase for Increase for
Currency U.S. Journals European
Journals
______________________________________________________________
Australian dollar 6.0 - 8.0% 2.0 - 4.0%
Belgian franc 15.0 - 17.0% 10.0 - 12.0%
British pound 12.0 - 14.0% 7.0 - 9.0%
Canadian dollar 10.0 - 12.0% 7.0 - 9.0%
Dutch guilder 14.0 - 16.0% 10.0 - 12.0%
Finnish markka 17.0 - 19.0% 13.0 - 15.0%
French franc 13.0 - 15.0% 9.0 - 11.0%
German mark 14.0 - 16.0% 10.5 - 12.5%
Italian lira 8.0 - 10.0% 7.0 - 9.0%
Japanese yen 11.0 - 13.0% 8.0 - 10.0%
New Zealand dollar 7.0 - 9.0% 5.0 - 7.0%
South African rand 25.0 - 27.0% 20.0 - 22.0%
Spanish peseta 12.0 - 14.0% 9.0 - 11.0%
Swedish krona 11.0 - 13.0% 7.0 - 9.0%
U.S. dollar 9.0 - 11.0% 6.0 - 8.0%
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Released: May 14, 1996
