Faxon Price Projection Update Ron Akie 24 Apr 1995 22:42 UTC
News Release For Immediate Release Contact: Ron Akie <AKIE@FAXON.COM> (617) 329-3350, ext. 292 1996 SUBSCRIPTION PRICE PROJECTION UPDATE Falling US Dollar Means Steeper 1996 Increases April 24, 1995, Westwood, MA -- Since we released our initial price projection for 1996 subscriptions in January, the US dollar has fallen dramatically. In the interest of providing librarians objective information, whether the news is good or bad, to help in planning and budgeting, we have revised our projection for 1996. We now expect that a typical collection will see an overall increase of 14.8 percent, versus our original projection of 13.5 percent. The US dollar is 9 percent weaker against the key European currencies than we thought it would be at this time and shows few real signs of significant recovery. We think it is prudent, therefore, to add an additional contingency of at least 5 percent to the Currency Exchange component of the price increase for European titles. January 1995 Projection April 1995 Revision North American European North American European Page Inflation 2.5% 3.0% 2.5% 3.0% Paper/Postage 3.0% 3.0% 3.0% 3.0% General Inflation 2.5% 2.0% 2.5% 2.0% Cancellations 2.5% 3.0% 2.5% 3.0% Currency Changes N/A 7.5% N/A 12.5% Total Increase 10.5% 18.5% 10.5% 23.5% Typical Overall Increase: 13.1% 14.8% (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: As explained above, the continued decline in the value of the US dollar will mean substantial price increases on European subscriptions. This factor is a direct result of global economies and currency markets and is fundamentally beyond the control of publishers or agents. Revised 24 April 1995