A mainstay of traditional publishing, The Encyclopaedia Britannica, will no longer be printed after over two centuries of being sold to families. The last print edition to be run, in 2010, sold only 8,000 copies; the remaining 4,000 copies are destined to be collector’s items — or are headed for the recycling bin.
What killed the print edition of The Encyclopaedia Britannica? There were a number of factors that contributed to the demise of the once ubiquitous reference texts, but it all boils down to technology. The personal computer led to a boom in CD-ROM-distributed reference material that was easier to access and boasted multimedia content.
Wired points out that Microsoft‘s (NASDAQ:MSFT) Encarta for Windows PCs was the beginning of the end. The Web and then Wikipedia may have been the final nails in the coffin, but The Encyclopaedia Britannica peaked in 1990 when the 120,000 copies sold (at nearly $1,500 a set) brought in revenue of $650 million. By 1996, 2,300 employees were being let go and the company was sold for $135 million.
A model for a different era
There are lessons for other companies currently enjoying a seemingly unassailable position in today’s market. After nearly 250 years of writing, printing and selling encyclopaedias — its name becoming so recognizable that it came to be interchangeable with “encyclopedia” — the publishers of The Encyclopaedia Britannica once seemed certain to carry on printing reference texts forever. But disruptive technology completely undermined their business model and in a few short decades rendered their product virtually useless.
Lesson One: No product is impervious to change. Even the most popular, must-have gadget or device will eventually become an also-ran. In today’s rapidly changing world, a 200-year run isn’t going to happen again, especially when it comes to consumer electronics — 10 years seems to be the current max, with five years more likely.
Lesson Two: A company that adapts to changing market forces can survive. Encyclopaedia Britannica did release CD-ROM versions, but they were too expensive and came along too late. The transition to the Web was more successful. Encyclopaedia Britannica is now completely digital, and has been profitable for the past eight years. According to The Atlantic, the company has 500,000 customers who each pay $70 yearly for online access. The most recent move has been the launch of apps, catering to the mobile device crowd while offering low monthly access fees (between $1.99 and $4.99).
The lessons from the Encyclopaedia Britannica — and Kodak (NYSE:EK) before it — can be applied to everything from consumer electronics manufacturers like Apple (NASDAQ:AAPL) to newspaper publishers. Companies that don’t innovate pay the price, while those that adapt to and embrace change often thrive.