In a Digital World, Encyclopedias Strive for Relevance

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The last doors slammed shut on encyclopedia salesmen years ago.

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Beginning in the early 1990s, many parents decided that instead of shelling out hundreds of dollars for a weighty set of books, the digital encyclopedias that came bundled with their home computers were adequate for their children's research reports and other schoolwork.

Traditional encyclopedia publishers put their door-to-door sales forces out to pasture, and then struggled with a variety of challenges in creating digital products. They faced a brand-new competitor—Encarta—whose encyclopedia exists in digital form only and is produced and backed by the powerful Microsoft Corp. They have engaged in costly experiments in offering their content free on the Internet before deciding on the subscription model. And perhaps most challenging of all, they have had to prove their relevance in an age when there are millions of sources of information available to students on the Web.

But don't close the book on the hardcover volumes just yet. For one thing, brand names that have been around a long time (since 1768 for the Encyclopaedia Britannica and since 1917 for the World Book Encyclopedia) are proving to be valuable assets amid the information glut.

Plus, parents, teachers, and librarians seem to agree that just because a lot of free information is on the Web, that doesn't make the global computer network a safe place for children to roam freely. Encyclopedias, in contrast, are viewed as safe and trustworthy places for even the youngest of students to do their research.

And while printed encyclopedias are rarely sold one volume a week at the supermarket anymore, they have made a bit of a comeback, especially in sales to schools and libraries.

"We're not seeing the level [of print sales] of the 1980s, when we had thousands of people going door to door, but it is rebounding," said Patti Ginnis, the senior vice president of sales and marketing for Chicago-based Encyclopaedia Britannica Inc.

Selling to Schools

Britannica was founded in Edinburgh, Scotland, in 1768 and was purchased by American owners in 1901. In 1996, the private Benton Family Foundation sold the company to Jacob Safra, an Israeli investor known for backing Woody Allen movies.

Under Mr. Safra, Britannica spent a lot of money trying strategies such as offering its content free on the Internet and attempting to become an advertising-supported Web portal. It paid millions to advertise during the 2000 Super Bowl and came close to filing for an initial public offering of stock before the market for Internet stocks crashed that same year.

Now, Britannica has returned to its roots of focusing on content. It resumed charging for access to its encyclopedias on the Web (currently $9.95 a month, or $59.95 a year, for consumers). It published its first print set in several years in 2001, which sold out, according to Ms. Ginnis. She wouldn't say how many sets sold. (Nor does Britannica release revenue or profit information.)

A new print edition is coming out this year. Meanwhile, Britannica last year reacquired Compton's Encyclopedia, a print set geared to middle and high school students that the company had owned from the early 1960s to the early 1990s.

Britannica has put renewed energy into selling to schools, whether it be books, CD-ROMs and DVDs, or online subscriptions. The Britannica Online School Edition includes access to three versions of the encyclopedia, as well as other material such as full- text periodicals and a Web guide. In contrast to Britannica's consumer site, which carries advertisements and lists some e-commerce sites, the school site is ad-free, and the Web guide limits the number of commercial sites it lists.

"School librarians and media specialists understand the value of branded content," Ms. Ginnis said.

A similar focus on schools is evident at World Book Inc., which is also based in Chicago.

"We believe we lead the school and library market in online subscriptions," said Robert Martin, the president. However, verifying such claims is difficult because the publishers don't release detailed sales information.

World Book is owned by Berkshire Hathaway Inc., the conglomerate led by the celebrated investor Warren Buffett. While World Book's annual sales were believed to be in the neighborhood of $200 million just a few years ago, the figure has been closer to $100 million a year the past two years, according to one industry source.

Mr. Martin said that in the heyday of door-to-door sales to families, World Book sold some 400,000 print sets a year. Now it is fewer than 100,000.

"But we are actually selling more sets to schools and libraries than we ever have," he added.

Matt Thibeau, World Book's vice president of marketing and sales, said having printed volumes on hand in schools helps promote literacy and allows students to explore with more serendipity than they might online.

"There is just something emotional about learning by turning pages of a book," he said.

The Digital Market

But for home sales, Microsoft and others learned during the 1990s that parents who had about $1,000 to spend on something for their children's education were ready to use that money for a personal computer. The fact that most computers came with an encyclopedia on CD- ROM helped cement the decision.

For Encarta, Microsoft started out by licensing the Funk & Wagnalls New World Encyclopedia as the foundation. But the computer-software behemoth has refined and updated its database to such an extent that Encarta is really its own product, industry observers say. Encarta leads the way in multimedia add-ons such as maps, virtual tours, and timelines, according to many encyclopedia reviewers.

World Book and Britannica generally lead the pack in school use, in part because they are available in print, software, and online forms.

But Jim Oker, an Encarta product-unit manager at Microsoft, said his company also targets schools with special licensing programs for its CD-ROM and DVD versions.

"We meet with educators regularly as part of our product-planning efforts and include features in the product at their request, such as our customizable and flat maps," he said in an e-mail interview.

The other active player in the U.S. encyclopedia market is Scholastic Inc., the New York City-based educational publisher, which in 2000 paid $400 million to buy Grolier. Grolier's offerings include the Grolier Multimedia Encyclopedia, the Encyclopedia Americana, and the New Book of Knowledge. Scholastic executives said at the time of the purchase that acquiring the stable of encyclopedias would enhance the company's presence in school libraries and give it a new audience for Internet products.

Funk & Wagnalls, which was once popular in supermarket sales, now only maintains its content database for licensing to other publishers and Web sites and has not published new products of its own in recent years, according to competitors.

Librarian's Choice

Encyclopedia reviewers offer diverse opinions about the stable of products currently available. Britannica is the "gold standard of digital encyclopedium," Walter S. Mossberg of The Wall Street Journal wrote recently. But some users and reviewers find it too dense for younger students.

In a recent review of digital encyclopedias by School Library Journal, a panel of school library teachers said the World Book Encyclopedia Online was the "clear favorite" because of its quality of articles, ease of use, and timeliness in providing current information.

"World Book is my favorite in hard copy, too," said Janet Claassen, a library media teacher at Madera (Calif.) High School, who was on the School Library Journal review panel. "We keep several years' worth on hand in the school library, and we let students check out and take home volumes from the older editions."

Besides print sets of the World Book, the Madera High library also subscribes to Britannica Online, as well as several other online databases. Ms. Claassen said it is important that students have access to both print and digital encyclopedias.

So where does Ms. Claassen turn first when she is helping a student's research query: to a printed encyclopedia or the digital alternative?

"That depends on the kind of question it is, and it depends on where I am standing at the time," she said. "The print sets and computers are on different sides of the room."

Coverage of technology is supported in part by the William and Flora Hewlett Foundation.

Vol. 22, Issue 16, Page 8

Published in Print: January 8, 2003, as In a Digital World, Encyclopedias Strive for Relevance
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