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HBR Readers Club

Note: All discussions and summary about HBR articles

Session : 1

Date: May 09, 2020 - Saturday

Title: How I Did it - Brittannica

Link: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1

Participants: Raja CSP

Summary:

Encyclopedia Britannica’s president on killing of a 244 year old product:

Reports cited Wikipedia as a disruptive force. In fact, Wikipedia helped us sharpen our business strategy. Our content model was dismissed as “vintage”, but it is actually anything but: We update our content continually, with community input, reaching tens of millions of people every day - and they pay for it.

In 1994 Britannica produced its own CD-ROM encyclopedia. It was originally priced at $1,200, about the same as the bound set. But by then Microsoft was bundling its CD-ROM encyclopedia, Encarta, with the vast majority of Wintel computers as a loss leader to increase the sales of home PCs by positioning them as a learning tool and a homework helper. It was a brilliant move by Microsoft and a very damaging one for Britannica. Regardless of quality, it was hard for a $1,200 CD-ROM to compete with a free one bundled with a PC.

Few publishers had yet seen the web as a place to publish, let alone to put their entire flagship product. But it was a risky move, too. We knew that it would further cannibalize our own print market; we just didn’t know by how much. Digital sales rose, but slowly, while print sales fell off a cliff.

To adapt to market shifts, we had to make several major transformations that would ultimately cost tens of millions of dollars. The most painful one involved changing the way we sold our products. The Britannica direct-sales force was at the center of the business structure.