journals performance review aerospace sciences meeting 2013 january 2013 michele dominiak

Journals Performance Review

Aerospace Sciences Meeting 2013January 2013Michele Dominiak

2

Points of Review

• Revenue Key Indicator Update Financials

• Expense Key Indicator Update Direct and Indirect Expenses Net Margin

• Looking Forward

3

Key Indicators: Institutional Subscribers

• Institutional subscribers decreased 6.6% in FY12 after a 4% increase in FY11.

* Data based on September results.

FY08 FY09 FY10 FY11 FY120

500

1000

1500

2000

2500

3000

3500

JACICJTHTJSRJPPJGCDJAAIAAJ

Institutional Subscribers

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Subscription Rates: Institutions

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

• FY13 Online Rates:

AIAAJ: $1935 JA: $1,060 JGCD: $1,080

JPP: $1,165 JSR: $1005 JTHT: $850

JACIC: $445

• Rates for Members have not changed since FY07. They are currently price at almost a 95% discount from list price (on average)

FY08 FY09 FY10 FY11 FY12 FY130

500

1000

1500

2000

2500

AIAAJJAJGCDJPPJSRJTHTJACIC

Institution Subscription Rates

Subscription Mix by Format Type

5• The trend toward “Online Only” products continued into FY12.

FY08 FY09 FY10 FY11 FY120%

20%

40%

60%

80%

100%

120%

43% 38% 33% 31% 29%

31%

27%25%

22%20%

26%35%

42% 47% 51% OnlineBothPrint

Subscription Revenue Mix %Institutions + Members

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Key Indicators: Member Subscriptions

• FY12 saw a 15% decline from FY11 in Member Subscriptions


500

1000

1500

2000

2500

3000

3500

4000

4500

5000

JACICJTHTJSRJPPJGCDJAAIAAJ

Member Subscribers

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Key Indicators: Geographic Breakdown

• In FY12, domestic subscribers accounted for 61% of total subscriptions.

• The percentage of non U.S. subscribers increased slightly by 2% in FY12.

* Data includes Member and Institutional Subscribers

FY08 FY09 FY10 FY11 FY120%

20%

40%

60%

80%

100%

120%

66% 67% 63% 63% 61%

34% 33% 37% 37% 39%

Non U.S. Domestic

Geographic Subscriber Breakdown

Revenue Trends by Source

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• Institutions generated 82% of all Journals revenue in FY12.• In FY11, part of the increase was due to a set up issue in netFORUM discovered

for some of the Journals. As a result, revenue that should have been recognized in FY10 was recognized in FY11.


-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

Other

Transactional

Archives

Page Charges

Institutions

Members

Journals Revenue Breakdown by Source

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Revenue Trends by Journal

FY08 FY09 FY10 FY11 FY120.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

35.4% 35.1% 36.5% 33.5% 35.1%

13.7% 13.4% 13.3%12.5%

14.2%

14.6% 14.4% 13.6%14.6% 12.6%

11.7% 12.1% 12.2%12.7% 11.0%

11.3% 11.4% 11.7%10.3% 11.8%

6.8% 6.8% 6.3%7.5% 6.9%

1.4% 1.4% 1.5%1.4% 1.5%

4.4% 5.1% 4.7% 7.2% 6.2%1% 0% 0% 0% 1%

PSJArchivesJACICJTHTJSRJPPJGCDJAAIAAJ

Revenue Breakdown by Journal as a Percentage

AIAA Financial Terminology

• Revenue: Income from sales of AIAA’s products and services, such as professional member dues, Journal subscriptions, and conference registration fees

• Direct Expenses: Expenses specifically associated with a particular product, such as staff travel, printing, paper, promotion, food and beverage, audio visual (excludes labor).

• Direct Operating Margin: Revenue less direct expenses

• Labor: Manpower charged to a project based on our time accounting system. Includes salaries, payroll taxes and fringe benefits.

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AIAA Financial Terminology

• Allocations, also called Indirect Expenses: Expenses necessary for general operations which cannot be readily assigned to a particular activity and are therefore allocated proportionately throughout programs. Includes IT, Office Services, General and Administrative (Executive, H/R, Accounting), and Program Support expenses such as Customer Service, Marketing, Design Team and Business Development. Allocation Methodology: Step down, sequential method

– Office Space: Based on office space occupied– IT: Based on laptops required per employee– G&A: Based on labor charges– Program Support: Based on labor + direct expenses

• Expenses: Include all expenses – direct, labor, and allocations

• Net Margin: Revenue less all expenses11

12

Direct Expenses

Category Includes

First Copy Outside production costs

Peer Review Honoraria, EIC expenses, software (e.g. S1)

Print Paper, printing, postage, color offset

Miscellaneous Promotion, staff travel, committee expenses, training, supplies, agent commissions, Atypon, etc


200,000

400,000

600,000

800,000

1,000,000

1,200,000

Direct Expense Breakdown

Misc

Print

Peer Review

First Copy

Direct Expense per Page

13

• The shift between FY08 and FY09 represents the tapering of subsidies, and the beginning of total cost accounting implementation and allocation to the product lines. FY08 and FY09 ScholarOne Manuscript costs were part of the AMS/Web Allocation. Beginning in FY10 the Journals recognized these as direct costs.

• FY09 and FY10 costs increased due to Honoraria increases and the addition of direct expenses for Software.

• Direct Costs per Page remained the same in FY12 from FY11.


20

40

60

80

100

120

Direct Costs per Page

$

Direct Operating Margin

14

• Direct Operating Margin = Revenue less Direct Expenses• FY12 saw an 8% decrease in DOM due to lower revenues

(direct costs remained approximately the same)


500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Journals Direct Margin$

15

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.


200000

400000

600000

800000

1000000

1200000

1400000

AMSCustomer ServiceDesignCatalogPubs ProcessMarketingBusiness DevG&AMISOffice ServicesP/R Taxes & BeneftsDirect Labor

Indirect Expense Breakdown

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Putting It All Together…Net Margin

• With lower revenue and higher allocations, Journals net margin is down from FY11 but still continues to generate a strong product net margin for the Institute.

FY08 FY09 FY10 FY11 FY12$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

Journals Net Margin

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Looking Forward

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

• Concerted focus on international library consortia and sales• Continue to emphasize archives• Monitor the print-online tipping point and timing• Aggressively market the new platform and its ease-of-use to

search and discover content• Capitalize on our new partnership with Turpin Distribution

Continue to investigate and proactively plan for public/open access models for federally funded research content

• Work with authors to enhance existing product with supplemental material

journals performance review aerospace sciences meeting 2013 january 2013 michele dominiak

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