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Encyclopaedia Britannica

What has happened to Encyclopaedia Britannica?

Encyclopedia Industry History & Structure


What are the keys to success in this model?
How are encyclopedias created, produced, and sold?

What is Britannica place in the industry in 1990?


How big is the industry? What is EBs market share, and likely profit share?

Industrial evolution in the 1990s


New Technologies- CD Rom New Competitors - Microsoft

Why did Encyclopaedia Britannica turn down Microsofts offer in 1985?


Traditional way of selling threatened
Potential revenue leakage from cannibalization Damage to premium perception Low penetration of PCs and uncertainty of benefits of multimedia Risky partner with different goals

What factors made Encyclopaedia Britannica ripe for disruption?


Product Place

Price

Promotion

What features of a digital content are difficult for a legacy incumbent to imitate?

Could Britannica have done anything to salvage its business?


Management Experience Capital structure constraints Infrastructure cost Hybrid coverage
Organization diseconomy of scope Channel strategies, sales rep vs retail Marketing: commission vs advertising-led Pricing strategies premium price vs mass price Production & Product Development: New media, new scope, new depth

How would you rate top management in this case?

Epilogue to Encyclopaedia Britannica case


Encyclopaedia Britannica Encarta

Britannica lost half it revenue in 3 years Sold to new owner Online version grew to be moderately successful in institutional subscriptions, but no consumer traction Editorial costs cut drastically, no new editions 2012 Britannica abandoned the printed encyclopedia business

Success as CD-Rom for a few years but declined when the internet arrived Transition to online advertising drives model but did not generate significant revenue Mid 2010 Encarta loses its place as online venture to Wikipedia

Did the broader book and magazine industries face a similar challenge to business at turn of century?

Are they facing a similar challenge now?