The summer between my junior and senior years in high school I went door-to-door selling encyclopedias. Well, that’s not correct—I never sold anything.
We were actually not asked to sell anything. We were instructed to “place” a starter set of the encyclopedias with a nice family. The punch line was that about two weeks after I left, bills started to arrive.
I honestly do not remember if the company was Encyclopedia Britannica but I am not one that lets facts get in the way of a good story. I recently read with interest that Encyclopedia Britannica is no longer printing its product, so for this column I am going to say it was Encyclopedia Britannica in order to write from personal experience.
That too would be pushing it. I seem to remember that I did this “job” for less than two weeks. Maybe for less than a week and a half. I do remember my next job that summer was making sausage. I wasn’t very good at that either, but you’ll have to wait for that story.
Anyhow, I hate that a company founded in 1768, part of our schooling history and as American as apple pie and Chevrolet, fails. Wait…Chevrolet? Well, apple pie is still safe.
As recently as 20 years ago Encyclopedia Britannica sold 120,000 copies of its printed product. In 2010 they sold 8000. Does this sound like anything else we deal with every day?
The product has moved online. Encyclopedia Britannica says 500,000 people pay $70 per year for their kids’ homework—I mean, unlimited access to the Encyclopedia Britannica website. This is a great deal for your kid’s homework—I mean, for a paid version of Google or Wikipedia.
This is like buying 6 or 7 full album downloads on iTunes. Or 70 single downloads per person.
That’s also $35 million. That’s a lot of money and a pretty good model.
But the printed version cost $1300. In 1990 with 120,000 sold, that’s $156 million. In 2010 the total was $10 million.
Does any of this sound familiar?
When the consumer has choices the business must change and change quickly. Twenty years is a slow change but to be fair, the fall from 120,000 to 8000 did not happen overnight.
The radio and record industries have changed slowly. The record industry was forced to change and the damage has been brutal. The radio industry is still changing and I should say we were forced as well. Radio is being forced by outside energies, but also from the inside as Clear Channel is becoming a digital company.
In case you didn’t do the math, Encyclopedia Britannica lost 94% of its revenue in 20 years. Neither radio nor records have taken hits like that. Britannica would like to go back to their profit levels of 20 years ago and many radio stations would opt for that. I suspect that most record companies long for the profit levels of past years.
All disc jockeys and programmers would like to go back to when there were full staffs and PDs didn’t have 6 stations to oversee. Technology appears to benefit the consumer a lot more than the industries that evolve.
Because I “may” be a former employee of Encyclopedia Britannica I feel badly for their demise. I am glad they have found a new model, even if it is one that is about 20% of their peak. What I am more afraid of is that the two industries that I do deal with everyday are not moving quickly enough to own the new technology.
Oh, I am also afraid that the technology keeps us from finding enough revenue to do anything but online.
