Electronic products and new ways of selling bring changes to the encyclopedia business.
Ever since a pirated U.S. edition of the Encyclopedia Britannica was issued in the late eighteenth century, encyclopedia publishing has been a well-established business in this country, and encyclopedias have been long a traditional staple of library reference collections. Today about 800,000 sets of general encyclopedias are sold in the U.S. in typical year, generating gross revenues of more than $600 million; even so, encyclopedia publishing is a relatively small sector of the overall publishing industry, which has total revenues of $15 billion.
Until recently, with the library market accounting for only a small part of total sales, most encyclopedias were sold do consumers in their homes. Since it has become increasingly difficult to find anyone at home during the day, encyclopedia publishers are now looking for alternatives to door-to-door sales, experimenting with direct mail, telemarketing, booths in malls and at state fairs, and sales in retail stores. They are also moving into electronic publishing. Since a significant part of the purchase price of an encyclopedia goes to the salesperson as a commission (six-figure salaries are not unknown in the field), this may eventually change the price structure of the industry.
Six publishers issue annually revised general encyclopedias in the U.S.; two of them (Encyclopeadia Britannica and World Book) control more than 55% of the market. Most of these companies sell a range of products, with encyclopedias only one part of their lines. One of the most lucrative products for encyclopedia publishers is the yearbook. This is sold to consumers on a kind of "standing order" basis, so marketing costs are low.
The company rankings used for publishers in the following firm-by-firm rundown are from the Dec. 21, 1990, issue of Publishers Weekly and reflect sales of many divisions and products, not just encyclopedias.
Encyclopaedia Britannica, Inc., is the seventh largest publisher in the U.S., according to Publishers Weekly, with overall revenues of $627 million. Chicago-based EB is unusual in encyclopedia publishing these days in that it is not owned by anyone else; rather, it owns dictionary publisher Merriam-Webster, Evelyn Wood Reading Dynamics, Compton's NewMedia (its electronic publishing division), and Britannica Learning Centers.
In an unusual form of ownership, EB is a privately held, for-profit company whose stock is held by the William Benton Foundation, a not-for-profit corporating established to support the University of Chicago. This form of ownership protected EB from being taken over during the mergers and acquisitions frenzy in publishing during the past decade. Currently the foundation provides the university with about $2 million a year; over its lifetime, it has given it more than $100 million.
EB published three encyclopedias: New Encyclopaedia Britannica Compton's Encyclopaedia, and Children's Britannica. One division, Encyclopaedia Britannica Educational Corporation, sells these sets to schools and libraries, along with other reference titles, videos, and electronic products. A separate sales force sells New Encyclopedia Britannica to consumers, both in the home and in booths and EB rents in malls and other public places.
Britannica has a big presence overseas, with more than half its revenues coming from foreign sales. The English-language New Encyclopedia Britannica is sold in some countries; in others, the set (usually just the Micropaedia) has been translated into the local language, and in a few countries Britannica has participated in a joint venture with a local publisher to bring out a new encyclopedia.
Recently, Britannica has begun venturing into new ways of selling its products Children's Britannica, for instance, has been sold to consumers through the mail. EB has long had …