March 22, 2001, 9:41 AM — Britannica.com Inc. will no longer provide content from the Encyclopaedia Britannica for free and instead will begin a subscription service for the online content -- again.
Like other content sites that didn't find enough gold in Internet advertising, Britannica.com is changing its business model. The restructuring, announced last week, will involve a 31% layoff of Britannica.com's workforce and heavy marketing of other pay services, such as BritannicaSchool.com.
"There was a time not along ago when most
observers believed that Internet services had to be supported mainly through advertising," said Don Yannias, Britannica.com's CEO. "We are out there in the marketplace, however, and we're convinced that a diversified business model combining free and subscription-supported products is the road to success." Britannica.com, a private company in Chicago, wouldn't disclose advertising or other revenue.
According to Britannica.com spokesman Tom Panelas, the subscription service will be rolled out within the next several months; however, the company hasn't yet formulated a pricing model.
The news comes less than 18 months after Britannica.com launched its free service on the Web. Before that, the Encyclopaedia Britannica was available through Britannica Online. That subscription service was the first to put the entire contents of an encyclopedia on the Web in 1994.
Britannica Online had two pricing models in place before Britannica.com went live in October 1999. For individuals, the cost was $5 per month, or $50 for a year's subscription. For institutions, like colleges, the cost was, on average, 50 cents per seat. The more seats an institution purchased, the lower the per-seat cost.
When Britannica.com debuted, a crushing surge of 10 million visitors forced the site to temporarily shut down. But that popularity apparently didn't translated into monetary success for the subsidiary of Luxembourg-based Encyclopaedia Britannica Holding SA.
Moving back to the subscription model makes sense, said analyst Harry Wolhandler at ActivMedia Research LLC in Peterborough, N.H.
"Early on, nobody knew what the revenue model was going to be, and as long as the investors were willing to fund any crazy idea that came along," the advertising model worked, Wolhandler said.
With investors skittish on tech investments in the past few months, "all of a sudden, decision-making is going to become more rational," he said.
