Newsletter on Serial Pricing Issues 086 (July 3, 1993) URL = http://hegel.lib.ncsu.edu/stacks/serials/nspi/nspi-ns086 ISSN: 1046-3410 NEWSLETTER ON SERIALS PRICING ISSUES NO 86 -- July 3, 1993 Editor: Marcia Tuttle CONTENTS 86.1 FROM THE EDITOR, Marcia Tuttle 86.2 READMORE JOURNAL PRICING PROJECTIONS FOR 1994 86.3 EBSCO PERIODICAL PRICING PROJECTIONS FOR 1994 86.4 FAXON SUBSCRIPTION PRICING PROJECTIONS FOR 1994 86.1 FROM THE EDITOR Marcia Tuttle, UNC - Chapel Hill, tuttle@gibbs.oit.unc.edu. The newsletter is happy to present journal pricing projections for 1994 from three major US subscription agents. Each of these companies presents its data in a different format, and the results may be somewhat different. For non-US newsletter readers, please notice that EBSCO has included pro- jections for European, Australian, and Canadian librarians. We will send updates from these and other agents whenever we receive them. 86.2 READMORE JOURNAL PRICING PROJECTIONS FOR 1994 Readmore, Inc., 22 Cortlandt Street, New York NY 10007-3194. To aid you in planning your 1994 library budget, we have contacted both domestic and foreign publishers and several New York-based foreign currency traders. And, as we have done in years past, we've summarized what they have told us and are making our preliminary predictions for the 1994 year. The following table illustrates the change in conversion rates over the past two price years. We have chosen the countries of the major interna- tional publishers as examples. The projected 1994 conversion rates are based on discussions with various currency experts. Since currency fluctua- tions are often the single most influential factor in pricing, we are pre- senting these estimates as the first part of the analysis. 1994 ESTIMATED CURRENCY RATES Average 1992-1993 Increase Increase (Decrease) Country 1992 1993 (Decrease) 1994 (est.) 1993-1994 UK $1.60/L1.00 $1.90/L1.00 18.7% $1.60/L1.00 (15.8%) Germany 1.80DM/$1.00 1.50DM/$1.00 16.7% 1.60DM/$1.00 (6.7%) Holland 2.02F/$1.00 1.66F/$1.00 17.8% 1.75F/$1.00 (5.4%) The good news for 1994 is that the US dollar is projected to remain strong for the fall renewal period which will be a major benefit to STM libraries. Four pricing factors comprise the elements of 1994 price projections. In- flation, the first, is subject to changing economic conditions in each country. Also, page and/or volume increases over the year affect cost. The third factor is the high rate of subscription cancellations. We expect publishers will increase their prices to recoup some of this lost revenue. Fluctuations in currency are the last factor. ELEMENTS OF PRICE INCREASES FOR 1994 PERIODICALS Increase Net Inflation Page Due To Unit Currency Increase Country Increase Increases Reductions Fluctuation (Decrease) US 3.2% 4.7% 2.2% -0- 10.1% UK 2.1% 5.1% 2.7% (13.2%) (3.3%) Germany 2.9% 4.8% 1.8% (6.7%) 3.9% Holland 2.8% 4.1% 2.8% (5.4%) 4.3% Projecting one average price increase for all types of libraries is mis- leading, as our analysis indicates that there are many differences in buy- ing patterns based upon the various types of institutions. The estimated annual increase for a library in 1994 is based on the mix between foreign and domestic titles. Our projections for price increases for each of the different library groups are outlined below. 1994 PREDICTED PRICE INCREASE by library group Medical School 7.0% Hospital 8.3% Academic 8.0% Corporate Business 9.2% Corporate Research/Development 6.8% We predict that the 1994 subscription year will be vastly improved over prior years. Instead of an average increase of 16% to 18%, we should see 7% to 9% increases in 1994. 86.3 EBSCO PERIODICAL PRICE PROJECTIONS FOR 1994 Used, with permission, from _At Your Service_, no. 25, June 1993. European and US publishers have indicated they will increase subscription prices by about 10.5 percent for 1994. However, actual cost increases or decreases will depend heavily on prevailing exchange rates in October and November and on fixed exchange rates set by some European publishers later this year. Earlier this year it looked as if libraries buying subscriptions with US dollars would see a break in the trend of double digit price increases for European publications. In March, the US dollar was 6.8 percent stronger against a composite mix of major European currencies (British pound, Dutch guilder, French franc, German mark and Swiss franc) than it had been last November, when most publisehrs were paid for 1993 subscriptions. If the dollar had maintained its strength against those currencies, libraries purchasing with US dollars would have paid only about 3.7 percent more for European publications than they did last year. But the dollar has weakened since March and is currently at about the same level it was last November. Therefore, libraries paying in US dollars would pay about 10.5 percent more (the basic publisher price increase) for European subscriptions if they were invoiced today. Because of the inevitability of currency fluctuation, EBSCO Subscription Services Division General Manager F. Dixon Brooke Jr. recommends libraries take a cautious approach to budgeting for 1994 subscriptions. "We are now recommending librarians who buy with US dollars budget for at least the publisher price increase of 10.5 percent. If one wanted to be optimistic one could budget for a little less, counting on the dollar to regain some of the strength it had earlier this year. However, projecting currency situations is dangerous, as many unforeseen and unpredictable events may affect exchange rates between now and October and November." The unpredictability of exchange rates is further evident in the strong fluctuations in the values of the US dollar and the British pound last year. Another yet undetermined variable is that of fixed exchange rates set by some European publishers in August or September. Last year these rates were fixed at a time when the US dollar was especially weak against European currencies. Improvements in the dollar's strength that occurred between then and November could not be taken advantage of by libraries ordering titles for which exchange rates had been fixed. The US dollar's current (early May) value is about 7-8 percent higher than it was when publishers set fixed exchange rates for most European currencies last year; about 18- 20 percent higher than it was for the rates set for the British pound. Therefore, if publishers were to set fixed rates now, most libraries pur- chasing with US dollars would realize a small price increase for European journals and would see a price reduction for British journals. However, as mentioned above, publishers will not set fixed exchange rates until a few months from now. Implications for Libraries Paying in Other Currencies Of course, when European titles are less costly for libraries paying in US dollars, US titles are more costly for European libraries. This year Euro- pean libraries will likely pay about 10.5 percent more for European jour- nals and at least that much more for US journals. Australian libraries should budget for at least the publisher price in- crease for European and US subscriptions as well. As of early May the Aus- tralian dollar was just a little more than 1 percent stronger against the composite European currency and the US dollar than it was last November. The Australian dollar has behaved similarly to the US dollar in its rela- tive strength to European currencies: the Australian dollar was also about 6 percent stronger in March than it had been last November, but by May had lost almost all its advantage. Canadian libraries, if invoiced in early May, would pay about 13 percent more for US subscriptions (10.5 percent publisher price increase plus a 2.3 percent decrease in the value of the Canadian dollar as compared to the US dollar since last November) and about 10.5 percent more for European jour- nals since the Canadian dollar is at about the same level it was last No- vember as compared to the composite European currency. 86.4 FAXON SUBSCRIPTION PRICE PROJECTIONS FOR 1994 Faxon Company, 15 Southwest Park, Westwood MA 02090. Since issuing our initial 1994 price projection in January and a revised version in March, Faxon has continued to monitor closely world economic conditions and publishing industry trends. In January, we predicted an overall collection increase of 3 to 5 percent; we now expect an overall increase of 6.2 percent. Base Price Page Currency Total Increase Increases Exchange Increase US Published Titles 3.0% 7.0% 0.0% 10.0% Non-US Published Titles 5.0% 8.0% -14.2% - 1.2% (Publishers with fixed currency exchange rates) Non-US Published Titles 5.0% 6.5% - 8.4% 3.1% (Publishers with variable currency exchange rates) Overall Collection Increase: 6.2% Our projection for titles published in the US remains virtually unchanged, with just a slight increase in inflation, for a projected increase of 10 percent. New economic data have caused us to revise our projection for non- US titles with fixed currency exchange rates to a decrease of 1.2 percent (we had previously expected prices to decrease by 10 percent because of a stronger US dollar). Expecting that the US dollar will weaken by the Fall, the gains on currency exchange will be lower for titles whose publishers do not set a fixed cur- rency exchange rate, resulting in net price increases of 3.1 percent. Economic Factors Influence Projections Two factors have caused us to adjust our projection. First, we now believe the US dolalr will increase _less_ against major currencies because the US economy has not performed as well as expected in the first quarter and because of unstable economic conditions throughout Europe. Second, we have increased the amount we expect publishers to raise their base prices because of inflation and higher cancellation rates, based on recent information from leading publishers. A Typical Collection Based on these projections, a typical US library with a 64% US and 36% non- US collection can expect an overall collection price increase around 6%. Libraries with a higher proportion of US titles should, of course, expect a somewhat higher rate of increase. Calculating the Increase In making its projections, Faxon looks 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. Faxon plans to continue to invest substantial time and resources into mak- ing these projections to help you with your planning and budgeting. Over the course of the year, we update our projections based on the status of the US 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 projections were made in May 1993. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Statements of fact and opinion appearing in the _Newsletter on Serials Pricing Issues_ are made on the responsibility of the authors alone, and do not imply the endorsement of the editor, the editorial board, or the Uni- versity of North Carolina at Chapel Hill. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Readers of the NEWSLETTER ON SERIALS PRICING ISSUES are encouraged to share the information in the newsletter by electronic or paper methods. We would appreciate credit if you quote from the newsletter. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ The NEWSLETTER ON SERIALS PRICING ISSUES (ISSN: 1046-3410) is published by the editor through the Office of Information Technology at the University of North Carolina at Chapel Hill, as news is available. Editor: Marcia Tuttle, Internet: tuttle@gibbs.oit.unc.edu; Paper mail: Serials Department, CB #3938 Davis Library, University of North Carolina at Chapel Hill, Chapel Hill NC 27599-3938; Telephone: 919 962-1067; FAX: 919 962-0484. Editorial Board: Deana Astle (Clemson University), Jerry Curtis (Springer Verlag New York), Janet Fisher (MIT Press), Charles Hamaker (Louisiana State Universi- ty), Daniel Jones (University of Texas Health Science Center), James Mouw (University of Chicago), and Heather Steele (Blackwell's Periodicals Divi- sion). The Newsletter is available on the Internet, Blackwell's CONNECT, and Readmore's ROSS. EBSCO customers may receive the Newsletter in paper format. To subscribe to the newsletter send a message to LISTSERV@GIBBS.OIT.UNC.EDU saying SUBSCRIBE PRICES [YOUR NAME]. Be sure to send that message to the listserver and not to Prices. You must include your name. To unsubscribe (no name required in message), you must send the message from the e-mail address by which you are subscribed. If you have problems, please contact the editor. Back issues of the Newsletter are available electronically. To get a list of available issues send a message to LISTSERV@GIBBS.OIT.UNC.EDU saying INDEX PRICES. To retrieve a specific issue, the message should read: GET PRICES PRICES.xx (where "xx" is the number of the issue). +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ *****ENDOFFILE*****ENDOFFILE*****ENDOFFILE*****ENDOFFILE*****ENDOFFILE*****