Encyclopedia Britannica was built on the troops of kit-carrying door-to-door salesman who cajoled concerned parents into investing big money in an encyclopedia set to turn their children into budding intellectuals. But with the advent of the digital age, pricey leather-bound information has quickly become obsolete, and a limping Britannica has been reassessing its core business. With today's preview launch of its new flagship product - the Encyclopedia Britannica Internet Guide - Britannica is transforming itself from information provider to navigation director, and taking on Excite and Yahoo in the process.
"Encyclopedia Britannica is a brand in search of a product," explains Philip Evans, SVP of Boston Consulting. "The old Encyclopedia Britannica brand was a thing you bought to soothe your conscience - a cross between a piece of furniture and an act of parental contrition. But it was also a navigator ... and Encyclopedia Britannica is extraordinarily well placed to be the navigational brand for certain kinds of information."
The EBIG Internet directory, which will be available for general consumption in early 1998, is modeled after an Excite or Yahoo, and spun out of the related links that Britannica included in Britannica online. Britannica's staff of 25 pedigreed experts in various fields has reviewed, rated, and categorized the Web according to its organization system. Although the guide currently has 65,000 sites in it - as compared to Magellan's 60,000 - the emphasis is on quality of information, not quantity (for comprehensive surfing, an AltaVista search is included).
Sites are also organized in an extended outline, broken more academically and comprehensively than a Yahoo-type. "Education" for example, includes "education reform," "education assessment," and "forms of education" as sub-categories. A search on van Gogh will turn up specific indexed artworks, a biography, and general resources.
"[Other Internet guides] have moved away from providing really descriptive reviews of sites - we consider that our core value proposition," explains editor Diana Simeon Spadoni. "The distinction is that encyclopedic information only goes so far - our 14 categories go beyond" the scholarly topics of the books into more social and community information.
Britannica's re-invention of itself as an Internet directory comes after several years of turmoil in the encyclopedia industry brought on by he digital age. First, CD-ROMs made shelf-space irrelevant by fitting 32 volumes onto one disc. The major encyclopedia companies attempted to adapt themselves to that technology by digitizing, and Britannica, Grolier, and World Book now all offer CD-ROM products alongside the Encarta goliath. Next, along came the Internet: With gigabytes of far-reaching (albeit disorganized) information at their fingertips for free online, why would consumers spend over a thousand dollars on a leather-bound book set - or a CD-ROM, for that matter - that could be outdated within a few years? The major encyclopedias quickly stepped up to launch online products - some for free, like Encarta, or for subscriptions, such as Britannica's online EB database.
But analysts say the Internet has severely affected revenues. PC Data reports that while CD-ROM encyclopedia sales increased 23 percent between 1995 and 1996, revenues dropped substantially as the companies slashed their prices - from an average of US$53.13 in 1995 to $35.95 in 1997.
Arguably the most revered and respected of the encyclopedias, Britannica has also been among the most expensive, and as such suffered from severe price slashes. The Britannica CD-ROM price was cut from $1,000 per unit to $500, and then to $150 in April, which triggered sales to double. As of this month, the cost is $125 plus a rebate. Britannica also disbanded its diligent home sales force in 1996, moving both the CD-ROM and the book version into retail stores this year. Simultaneously, Britannica last month lowered its prices for Britannica Online from $150 a year to $85 a year (or $8.50 a month); currently, the site has 11,000 subscribers. The Britannica directory is expected to step in and take the brand beyond encyclopedias.
"Encyclopedia Britannica is moving beyond its content - the Britannica Internet Guide offers us the opportunity to take our editorial capabilities and organization to other content," explains Joan Julian, vice president of online services for Britannica. "I see the Britannica of the future as a broker between our marketplace - people looking for serious information - and helping them find an answer."
Unfortunately, Excite and Yahoo have been helping people find answers for even longer. To compete with them for an online audience, Britannica has to offer itself for free to start with, while it explores the usual slate of revenue through premium services, transactions, and sponsorships. Explains Julian, "The first goal is to build critical mass and gain awareness.... We're looking at other viable [business] models that don't involve writing a check for $1,500. That will mean a much bigger audience."
Other encyclopedias are also eyeing Internet directories as well. Encarta - which accounts for 60 percent of all encyclopedia CD-ROMs sold - is offering its own version of an Internet directory with Encarta 98. Encarta owners will be able to search a database of 400,000 pre-selected sites "chosen for quality" by Microsoft and Infoseek. For now, it's not a standalone product.
"When users want to search for information on a topic, we feel the value of an encyclopedia is important to provide general information," says Encarta marketer Paul Major. "If you divorce Web sites from the encyclopedia these sites have less value since you don't get the background on the subject you need."
In the meantime, Britannica will be competing most directly with Excite's popular Magellan guide, which also has "experts" reviewing and ranking Web sites. But while Britannica is late to market, what it has that Magellan as yet doesn't, Boston Consulting's Evans points out, is an internationally recognized name that's interchangeable with knowledge.
"I don't doubt the brand fits with what they're doing. The question is whether there's a business model," Evans says. "Encyclopedia Britannica didn't make money off scholarly information - they made money off guilt."
