Faxon 1996 Price Projection (Ron Akie) ERCELAA@ctrvax.Vanderbilt.Edu 27 Jan 1995 02:31 UTC
Date: Thu, 26 Jan 1995 19:00:35 -0400 From: Ron Akie <AKIE@FAXON.COM> Subject: Faxon 1996 Price Projection Faxon 1996 Subscription Price Projections Preliminary Projections - January 1995 Based on the latest information on publisher price increases, world economic conditions, and current and projected values of the U.S. dollar, Faxon is projecting the following changes in journal subscription prices for 1996 subscriptions. Please note that these are preliminary projections based on current conditions and are subject to change as the year progresses. North American European Titles Titles Page Inflation 2.5% 3.0% Paper/Postage 3.0% 3.0% General Inflation 2.5% 2.0% Cancellations 2.5% 3.0% Currency Changes N/A 7.5% Total Increase 10.5% 18.5% Typical Overall Increase 13.1% (based on 67% U.S., 33% European collection) The increases detailed in each category above represent the net effect that each component is expected to have on the final subscription price. For example, European title page increases in total are expected to be closer to 6%, but the net effect on the price will be 3%. Key Assumptions * Page Inflation: Even with tighter editorial standards, increased manuscript submissions will result in more published pages again next year. * Paper and Postage: After several years of stability, paper prices have sky-rocketed due to very limited inventories. Postal costs have also risen. * General Inflation: Inflation in both Europe and the U.S. has been accelerating and is expected to continue to rise at moderate levels. * Cancellations: Publishers continue to see increased subscription cancellations and must therefore allocate increasing fixed costs over a shrinking unit base. * Currency: The U.S. dollar has fallen approximately 10% against key European currencies since last year. We have recently seen some strengthening of the US dollar since the Federal Reserve Bank has raised interest rates, and we expect this to continue. At the time publishers set their 1996 prices, we expect the U.S. dollar will be approximately 7% below last year's level and will strengthen further into the Fall. 1995 actual subscription price increases. For 1995 subscriptions, Faxon's May 1994 price projections proved to be within 1% of the actual increases: Faxon Projection Actual 1995 May 1994 Increase North American Titles 9.9% 9.8% European Titles 10.4% 9.6% Typical Overall Increase 10.5% 9.7% Calculating our projections. In making our projections, we look at many factors including consumer price inflation by country for major publishers; paper costs and futures; and postal rates. In addition, we survey publishers on their expectations for page and volume increases, and we consult economic and financial experts. Over the course of the year, we update our projections based on the status of the U.S. dollar, conversations with financial experts and communications with publishers. So, if you are using our projections, please be sure you have the latest information available. These price projections were made in January 1995.