Journals Performance Review

Publications Committee Meeting6 January 2010

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Points of Review

• Revenue Key Indicator Update Financials

• Expense Key Indicator Update Direct and Indirect Expenses Net Margin

• Looking Forward

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Key Indicators: Institutional Subscribers

• Institutional subscribers experienced a 5% decrease in FY09.

* Data based on September results.

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Subscription Rates: Institutions

• Since FY07, subscription rates have increased 5-6% each year.

• FY10 Rates:

AIAAJ: $1,640 JA: $900 JGCD: $915 JPP: $990

JSR: $850 JTHT: $720 JACIC: $380

Institutional Subscriber Mix by Revenue Source

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• Since FY08, the majority of Institutional subscriber revenue has been generated from customers that prefer some or all content delivered in an online format.

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Key Indicators: Member Subscriptions

• After declining the last two years, the number of member subscriptions increased slightly in FY09.

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Subscription Rates: Members

• Subscription rates for members remained at the same levels in FY10.

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Key Indicators: Geographic Breakdown

• In FY09, domestic subscribers accounted for 65% of total subscriptions.

• The percentage of non U.S. subscribers has gradually increased over the past five years.

* Data includes Member and Institutional Subscribers

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Revenue Trends

• Although Journal revenue declined 3% in FY09, Journals revenue has grown 11% since FY05.

• All products experienced a slight decrease in revenue, with the exception of the Journal of Propulsion and Power, which remained flat.

Revenue by Source

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• Institutions generated 82% of all Journals revenue.• “Other” sales include online transactional sales of Journal articles and reprint sales.

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Key Indicators: Manuscripts Accepted

• The overall number of manuscripts accepted declined 4% in FY09.

• While domestic manuscripts accepted remained flat in FY09, the number of

non U.S. manuscripts accepted declined by 7% in FY09.

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Key Indicators: Pages Published

• In FY09, the total pages published for Journals increased 2%.

• All Journals remained flat or experienced an increase, with the exception of the AIAA Journal, which experienced a 7% decline in number of pages published. .

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Direct Expenses

• Direct expenses include costs for paper, printing, outside production, postage, honoraria, and color printing offset.

• After experiencing two years of shrinking expenses due to lower production costs and higher collections for color printing, direct costs increased 6%, or $54K, in FY09.

• Increases in expenses in FY09 were due primarily to an increase in Honoraria ($27K), paper ($14K) and print production ($13K).

Direct Expense Breakdown

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• Although printing costs run about 18% of total costs, they are offset by color printing collections.•“Other” costs include committee expenses, consulting fees, office supplies, software, travel, and temporary staff support (designers).

Direct Operating Margin

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• Direct Operating Margin = Revenue less Direct Expenses• Journals direct margin declined 6% in FY09 due to slight revenue decrease and an increase in direct expenses.

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Indirect Expenses Breakdown

• Indirect expenses include salaries, benefits, general and administrative costs and shared services allocations.

• The comparison of indirect expenses is not consistent year to year due to modifications in financial reporting practices to allocate all indirect costs to all projects.

• Publications Process is an expense account that falls under VP Publications and is then allocated to Books and Journals.

• In FY09, Publications Process consisted of $31K in direct costs that covered staff travel ($13K), committee expenses ($15K) and miscellaneous expenses like postage, society dues, and professional subscriptions. The remaining expenses included Labor & Benefits ($358K), and allocations ($462K).

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Putting It All Together…Net Margin

• Journals net margin has declined primarily due to a change in allocation methodology and an increase in indirect costs such as medical and fringe benefits, although direct margin did decline in FY09.

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Looking Forward

• Continue to incentivize institutional customers to subscribe to the “complete” collection without requiring a bundled purchase.

• Explore flexible subscription options for non-traditional or developing markets

• Concerted focus on international library consortia• Continue emphasize archives• Monitor the print-online tipping point and timing• Appropriate expense discipline• Proactively plan for public/open access models for federally

funded research content

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