Radical change and the Britannica story

By Kirk MacDonald

Pyrrhonian Partners

Toronto, Ontario, Canada


This is a story about an iconic brand being disrupted before becoming the innovator.

Having pivoted from being a consumer research resource, Encyclopedia Britannica is still in business and is now at the forefront of the online education market. It’s still Britannica. But it’s not.

Britannica is a success story of a legacy company adapting successfully to changing times.
Britannica is a success story of a legacy company adapting successfully to changing times.

Jorge Cauz, president of Encyclopedia Britannica, announced in 2012 that the company would cease publishing the bound volumes it had been producing for 244 years. It was a victim of the CD-ROM that created a new demand for multi-media and interactivity built into PCs as early as 1991. At the time, it was foreign to Britannica’s print-focused editorial and product teams. At the same time, the sales model began breaking down.

Then came Microsoft’s CD-ROM encyclopedia Encarta. Britannica responded in 1994 by introducing Britannica Online. In doing so, digital sales rose but slowly, while print sales fell off the cliff, according to Cauz.

The venerable publication was sold in 1996 and Cauz was hired as a consultant to initiate “the radical change” the new owner was looking for. He later became Britannica’s president.

Then came Wikipedia, which obliterated both Britannica and Encarta. Many people, including me, concluded that was the end of Britannica.

Fast forward to the 2018 INMA World Congress. If you weren’t able attend, the next best thing was to follow the event on Twitter (@INMAorg and #INMA18). There were lots instructive tweets originating from the long list of high-quality presenters.

This one, attributed to @David_Rogers, really caught my eye: “Encyclopedia Britannica didn’t go out of business; they lost out to Encarta, the Internet, etc but they adapted to better meet the needs of its core audience.”

How did that happen?

“Like many disruptive innovations, Wikipedia was of a lower quality: If it was video it would be grainy and out of focus. But consumers didn’t care about that, because Wikipedia has a vast number of entries and easy free access,” Cauz wrote in a Harvard Business Review article published in March 2013.

Wikipedia’s success, Cauz maintained, actually reinforced Britannica’s strategic decision to reduce its reliance on the consumer reference business and accelerate its transformation in the K-12 online education market, where it continues to flourish as a profitable business.

This slide also appeared in David Rogers’ World Congress session quoting Cauz: “By the time we stopped publishing the print set, the sales represented only about 1 percent of our business. We’re as profitable now as we’ve ever been.”

Here are the key takeaways to this tale:

  • Plan the exit from the legacy business by setting a date (month and year).
  • View the Internet as an enabler to reinvent the existing business and start new businesses.
  • Use the disruptor as a force to sharpen your strategy.
  • Isolate market shifts and map them to major transformations.
  • Change the sales focus to direct marketing and engage resellers.
  • Do everything possible not to reduce newsroom resources.
  • Don’t get mired in competition. Pick the industry you intend to disrupt instead.
  • Chart the before and after.

A final slide from Rogers asks: “How does a business started before the Internet adapt to grow in the digital age?”

The answer in part lies in an exhaustive case study of Britannica. The parallels to the decline of other iconic print brands are striking. It will undoubtedly prod news media publishers into a disruptive innovation mentality.

About Kirk MacDonald

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