Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 18, 1994 TAG: 9412210070
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: JAMES COATES CHICAGO TRIBUNE
DATELINE: CHICAGO LENGTH: Long
``We've decided to become promiscuous,'' Esposito said in an interview in the company's stately boardroom.
It's a silicon chip-centered promiscuity that Esposito has in mind, ending a devotion to one lifelong partner - ink on paper - for a series of new ones.
The new partners have names such as CD-ROM, the Internet and hard-drive storage.
After more than two centuries of remaining faithful to its conservative typography and ink-on-paper format, Britannica is rushing to computerize its 32-volume, 44-million-word database of the world's accumulated knowledge.
It is, the veteran reference publisher acknowledged, a big step for an institution that used to publish freshly written essays by John Stuart Mill.
Sticking to print worked for centuries as Britannica, founded in 1768, grew into what now is believed to be a $650 million business, according to most observers of the privately held and somewhat secretive company.
Then, along came the multimedia, CD-ROM-reading personal computers and the on-line services such as CompuServe, Prodigy and America Online. Sellers of multimedia computers and on-line services bundled the full texts of lesser encyclopedias along with other features.
Britannica sales plummeted after the company declined offers to sell its content to on-line services. The company likewise resisted suggestions that it put its database onto CD-ROMs for home use, unlike competitors such as Microsoft Corp., which owns Funk & Wagnall's encyclopedia; Grolier Electronic Publishing; and Compton's Multimedia Publishing Group, owned by Tribune Co., which publishes the Chicago Tribune.
``Now we're platform promiscuous,'' Esposito said in acknowledging efforts to regain the customers flocking to on-line services and to low-cost multimedia CD-ROM encyclopedias marketed by the competition.
Britannica is unapologetic about its recent promiscuity. ``We didn't rush into anything, and we're not being led into anything,'' said Esposito.
While Britannica may have been a late entry onto the information superhighway, it has become the first encyclopedia on the worldwide computer network called the Internet, no small feat. ``We're leading the way in areas, including putting our database onto computer networks.''
Among the steps the company has taken:
Making Britannica available on CD-ROMs for home use.
Selling a version that can be stored on hard drives for use on telephone local area networks at businesses.
Placing the entire database onto computers at the University of California at San Diego that are linked to the Internet's World Wide Web, for access by students and faculty members at colleges and universities.
Meanwhile, a reported 1,500 door-knocking sales representatives will continue to work the streets, placing the 32-volume behemoth into the world's living-room bookcases.
``Whichever way you want it, that's the way we'll give it to you,'' Esposito said. That strategy, Esposito believes, will let Britannica cope as the rush of technology threatens to undermine an institution that started publishing before the American Revolution.
Although Britannica doesn't disclose circulation figures, industry analysts such as Kenneth Kister, author of ``Kister's Concise Guide to Best Encyclopedias,'' believe that sales of the Encyclopaedia Britannica have plummeted to 65,000 a year from 130,000 only a few years ago.
Behind the lost sales, said Kister, is that virtually every multimedia computer sold over the last two years has included, along with other software, a CD-ROM encyclopedia.
Because the sort of affluent, education-minded people who buy computers also make up the demographic pool that buys encyclopedias, it becomes ever more difficult to sell the conventional Britannica.
Ironically, Kister noted, Britannica pioneered in 1989 the move toward bundling inexpensive encyclopedias with new computers through its Compton's New Media subsidiary, which has sold more multimedia encyclopedias than any other player on the field.
But instead of producing a multimedia version of Britannica itself, the company sold Compton's for $57 million in 1993 to Tribune Co.
Kister estimated that over its five-year history of selling encyclopedias for every platform from the CD-I computer game-playing machines to IBM-compatible PCs, Compton's has sold 2.2 million electronic encyclopedias.
Compton's officials said recently that they sold 900,000 copies of their popular encyclopedias in 1993 alone. Figures for 1994 aren't available yet. The encyclopedia industry is intensely competitive, and companies traditionally have resisted discussing circulation figures and other business details, Kister explained.
Nonetheless, he said, analysts assume that Compton's sales today are keeping pace with those enjoyed by Grolier's and software giant Microsoft Corp., which offers a multimedia version of Funk & Wagnall's under the name Encarta, according to Kister.
Reacting to the trend, EB, as the company's denizens refer to their set of books and their company, believes that putting Britannica on the Internet - plus issuing the CD-ROM version - lies at the heart of its plans to meet the competition. The Internet version is the company's best asset, Esposito said.
Based on the new Mosaic technology developed at the University of Illinois at Urbana-Champaign, Britannica Online allows users of virtually every type of desktop computer on the scene - including Macintoshes, IBM-compatibles and UNIX-operated computers - to browse through the encyclopedia's contents by pointing and clicking with a mouse.
Users can type in keywords to search the entire encyclopedia or browse Britannica by moving the mouse pointer to color-coded words, called hypertext links, which, when selected, call up articles related to the original one selected.
The Internet version of the encyclopedia in computer database form is being sold to academic institutions and libraries, which pay $1 per student per year, with a minimum of $5,000 per year and a maximum of $35,000.
But Britannica Online isn't yet available to the public, because the company hasn't found a feasible way to charge for use when growing numbers of household Internet users call up from the outside, Esposito said.
But he added that much of Britannica's reluctance to jump into CD-ROM publishing was based on the belief that the true future of electronic encyclopedias lies on-line rather than on the compact discs.
CDs, he said, are an ``interim technology'' that will fall out of favor as computers are linked into on-line services, including the Internet, at ever higher rates of speed.
The huge computers behind on-line services can hold far more information than a mere CD-ROM, and there is no need to switch discs when one is searching via high-speed phone links.
In fact, the Prodigy on-line service is in the final stages of development before releasing a Mosaic-style Internet browser that home computer users could use to reach the computer in San Diego that Britannica uses as the server for the full text of its encyclopedia.
Likewise, America Online Inc. and CompuServe, a division of H&R Block Inc., say they plan to provide the same sort of Internet browsers within a few months. Furthermore, companies selling direct access to the Internet are booming across the country.
Meanwhile, Britannica last month introduced a $995 CD-ROM for home use. If customers buy the $1,500 bound book set, the CD-ROM versions cost an additional $499.
Like the Internet version, the CD-ROM holds the entire 44 million words in the 32-volume set. Unlike the Internet version, however, it does not offer the maps, drawings, pictures and charts contained in the bound version, because of space considerations.
Even the vast storage capacities of CD-ROMs, which can hold more than 100 million words of text, break down when attempting to carry the 25,000 illustrations, along with Britannica's 44 million words, company officials explained.
The price is a lot higher than the $100 and less being charged for the less-comprehensive CD-ROM encyclopedias offered by Britannica's competitors.
But Esposito said EB's computer-friendly version is worth its higher price and is part of a long-term strategy to move Britannica into digital format while retaining the cash flow that has made it possible to continue publishing the enormous research tool each year since 1768.
by CNB