In May 2012, Britannica announced that it will discontinue the print publication of its multivolume Encyclopedia sets after 244 years. The writing had been on the wall for many years. The sale of Encyclopedia had reached an all-time peak of about $650 million but that had collapsed by over 80 percent over the next 20 years .
Britannica had become the undisputed king of reference libraries, with over 2,500 door-to-door salesmen peddling the expensive Encyclopedia sets to families across the world. However, it struggled to find a place in the digital age. In late 1980s, Microsoft had offered to work with Britannica on developing a version of Britannica’s Encyclopedia for PCs. Britannica refused and Microsoft went on to partner with Funk & Wagnall’s to launch the highly successful ‘Encarta’ – Microsoft’s CD-ROM encyclopedia . Britannica’s sales fell precipitously, it went bankrupt and was bought by a Swiss investor who ended its door-to-door sales operations. When Wikipedia emerged five years later, it was only a matter of time before Britannica had to rethink its strategy if it wanted to survive.
How Britannica responded
Britannica realized that despite all the troubles it still had a unique offering – a large volume of content generated by a ‘rigorous editorial process’. This was in contrast to the increasingly popular Wikipedia whose content was driven by user-provided data and hence its accuracy was questionable.
Britannica decided to change its business model to align it with Britannica’s core strengths. Firstly, it decided to focus on educational institutions – who else needed information which was verifiable and accurate! Britannica launched multiple products for schools under its ‘Digital Learning’ initiative . Operationally, it had to re-deploy a large sales team to target educational institutions. Moreover, it had to not only digitize its content but also make it more relevant for the digital medium – Britannica shifted towards shorter articles, online quizzes, listicles and also focused on user interface and design. As a result of this push, the global educational business now represents 90 percent of the company’s revenues and virtually all of its profit . It caters to more than half of the 112,000 K-12 schools in the United States .
Secondly, Britannica opened half of its online database to public at no charge (earlier all content was paid). As a result, online site visits tripled . The bigger audience has meant that Britannica’s revenue from digital advertising has increased from 5% to 25% of total online revenues (which includes subscription and advertising revenue) . Operationally, Britannica had to redesign its content for websites – increase focus on overall user experience.
Additional steps that Britannica could take
Britannica has done a good job of finding its niche in terms of its value proposition. However, there is significant scope of further refining its operating model.
Firstly, Britannica needs to focus more on Search Engine Optimization (SEO) as it is an important driver of ensuring greater number of site visits and hence greater advertising revenue. Currently, Britannica is not doing a great job at it. As a test, I decided to google ‘Albert Einstein’. The first suggestion, was of course, a Wikipedia article. The Britannica article did not come up on the first page – it was in the top half of the second page.
Secondly, Britannica needs to cast a wider net for content generation. Britannica has just 4,000 contributors  as opposed to Wikipedia which has over 29 million registered editors in addition to an unknown number of anonymous contributors . Though Britannica prides itself in having a rigorous editorial process – it can still use more contributors for generating initial content which can later be edited. In a business where having more content will mean more site visits and hence more advertising revenue – this ‘democratization’ of initial ideas can be a low-cost way of generating more content.
Thirdly, Britannica is limiting its user base by offering content only in English. Its main competitor, Wikipedia, is present in over 284 languages . Offering more languages will contribute towards increasing user base which can drive higher subscription as well as higher advertising revenue. This will also allow Britannica to launch its ‘Digital Learning’ products in other markets as well.
In a world where information is so easily accessible, it is interesting to see how an ‘information aggregator’ is creating a new value proposition around how reliable and rigorous its information is. It will be interesting to see if in the future years Britannica is able to maximize the revenue potential of this new brand identity.