Magazine article American Libraries

Hard Times: Encyclopedia Publishing in the 1990's

Magazine article American Libraries

Hard Times: Encyclopedia Publishing in the 1990's

Article excerpt

After losing more than $20 million over the last several years, Encyclopaedia Britannica announced this spring that it is looking for an infusion of cash from an outside investor or buyer. North American sales of its encyclopedia have plummeted from 117,000 sets in 1990 to 51,000 in 1994. Owned by a nonprofit foundation, Britannica has no parent company to provide the money to help it weather this difficult period.

The media have reported on the economic difficulties of Britannica as evidence of the problems of only one company, but the whole encyclopedia industry is a troubled one, with the sales of print sets down dramatically. For example, from a peak of 500,000 sets sold one year in the 1980s, World Book sold only 270,000 sets in 1990 and half that many in 1994.

One of the problems, according to World Book Publishing President Dick Dell, is that it has become harder to recruit salespeople. World Book used to depend on thousands of teachers selling the encyclopedia part-time, but Dell observed that "Teachers' salaries have gone up so much they don't need to sell encyclopedias."

Though declining to give figures, Grolier spokesperson Larry Lorimer admitted that his company's sales of print sets have been slipping every year. Funk & Wagnalls did not print a 1995 edition because of excess inventory. At P.F. Collier, which was sold several years ago by Macmillan to European publishing consortium Editorial Planeta-De Agostini, sales are up--but from a very small base.

Dumbing down or booting up?

What has happened to this once very profitable industry? As one publisher said, "It's those damned CD-ROMs!" While some have seen Britannica's drop in sales as further evidence of the "dumbing down" of America, the problems of the encyclopedia industry derive largely from the move to electronic publishing, with its much smaller profit margins. Fierce competition among the CD-ROM encyclopedias sold in retail stores (Grolier, Compton's, Encarta) has driven prices down to less than $100 apiece for sets that may sell for more than $500 in print.

But most CD-ROM encyclopedias are not purchased by consumers separately; they come bundled with a CD-ROM drive. Encyclopedia publishers sell discs to hardware manufacturers for bundling for as little as $7 each. While the number of CD-ROM encyclopedias sold is immense (Grolier and Compton's have each sold millions of copies), it is not clear, with such small profit margins, that they are profitable for publishers. The licensing of encyclopedias to online services such as America Online and Prodigy has not been able to compensate for the drop in print sales either.

Following Grolier's venture into CD-ROM in 1985, other publishers jumped on the electronic encyclopedia bandwagon. Compton's, at that time owned by Encyclopaedica Britannica, was the first multimedia CD-ROM encyclopedia. (Strapped for cash, Britannica sold Compton's to the Tribune Company last year.) Funk & Wagnalls is the source of the text for two electronic encyclopedias: Encarta and InfoPedia.

After releasing its first CD-ROM version in 1989, World Book published a multimedia version of its encyclopedia this spring. A CD-ROM version of Encyclopedia Americana also became available this spring, and Collier's is due to be released on disc in November. As of mid-June, Grolier's New Book of Knowledge and the New Standard Encyclopedia are the only sets not available in electronic form.

Though a Feb. 28, 1994, article in Forbes attributed Britannica's problems to its reluctance to enter the digital world, Britannica has been available on CD-ROM for several years and debuted on the Internet as Britannica Online last year. …

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