The granddaddy of A-to-Z information faces a tricky problem: how to take advantage of sweeping advances in information technology even as those advances threaten to make its core product–general reference material–a commodity.
Even before the Internet, the encyclopedia business was under high-tech fire. Microsoft led the assault, introducing its Encarta Encyclopedia CD-ROM in 1993 and selling it primarily through computer manufacturers that bundled it with PCs. At least 50 million computers around the world have been sold with Encarta, according to Microsoft. Privately held Britannica won’t disclose figures, but spokesman Tom Panelas admits sales have fallen from their peak, reportedly $650 million in 1990.
The knockout punch, however, was the Internet, itself a vast compilation of indexed information. Suddenly consumers had a world of facts at their fingertips. Of course, the medium had a fundamental weakness: it was filled with unreliable data. With Britannica’s authoritative entries and trusted name, this should have been the company’s big advantage in the Internet business.
The company made its Web debut in 1994 with Britannica Online, a subscription service for colleges and universities. In 1995 Britannica extended the service to consumers, offering a subscription for $150 a year and eventually ratcheting down the price to $50 a year. In October 1999, with only about 60,000 people signed up, Britannica decided to offer itself at britannica.com free of charge, relying on advertising for revenues. A couple of months later, it repositioned itself as a portal and even advertised during the 2000 Super Bowl. But as the site tried to become a portal, it strayed from its branded competence with features like weather and stock information, and advertising revenues weren’t strong enough to cover all the expenses. “The portal strategy was [a] strategy they pulled out of the air,” says former britannica.com managing editor and editorial director Rodger Brown. “And they didn’t give anything enough time to work.”
Now Britannica officials say the company is going back to its roots, focusing on education and reference. It plans to launch britannicaschool.com in June, several months behind schedule. The subscription site will include the encyclopedia, curriculum materials and other educational tools for grades K-12–a market also targeted by Encarta, which offers only part of its encyclopedia online, and World Book, which charges for access.
In the last few weeks, other Web publishers have decided to revive the subscription model. Both salon.com and variety.com are pushing pay-per-view content. New York Times Digital is preparing to beef up its “premium” offerings. (The main newspaper will still be free online.) “It’s healthier for a media company to have multiple and diverse streams of revenue,” says Scott Rosenberg, Salon’s senior VP of editorial operations. For Britannica, the challenge remains: can it convince people that its content is good enough to deserve payment, even as other sources give the stuff away?
