A while back I did a slightly flippant post suggesting that Britannica's Webshare program -- which allows bloggers free access to the Britannica website -- was a step in the right direction, but was probably too little, too late to compete effectively against Wikipedia. Jorge Cauz, Britannica president, asked for the opportunity to give his side of the story, and so we're pleased to feature this short interview, which was conducted last Wednesday.
I was reasonably impressed with Cauz's answers. Competing against Wikipedia is an awfully difficult thing to do, and Cauz seems to be doing many of the right things -- focusing on timeliness, collaboration, and other areas where Wikipedia currently has the edge. He points out that Britannica has another line of products in the K-12 education space, which suggests that Britannica is already leveraging its brand name in other businesses, suggesting that my idea of licensing the brand to another company might not be such a good idea.
Nevertheless, I think Britannica is going to face a serious uphill challenge to remain relevant in a Wikipedia-dominated encyclopedia market. Cauz says that traffic has grown 40 percent in the last two years, and that 17 percent of its traffic comes from its Webshare program. But 40 percent traffic growth isn't that impressive when we consider how far behind Britannica is to Wikipedia in web traffic. For example, between January 2006 and January 2007, Wikipedia more than doubled its traffic. If Britannica is growing at 20 percent per year and Wikipedia is growing at 150 percent a year, Britannica's will become less and less relevant in terms of market share. So while Britannica's market share may not be literally dwindling, they're going to have to take some much more radical steps if they want to capture more than a trivial share of the encyclopedia market.
Techdirt: Mr. Cauz, thanks for taking the time to talk to us. Tell me a little bit about the Webshare program.
Jorge Cauz: I don't recall exactly when it was launched, but we launched the functionality a couple of years ago. It has been implemented for a while and the main idea behind the Webshare program was trying to make sure that people link to us freely and make sure that the people who follow those links can have access to Britannica. I read your post, and in contrast to your belief that many people won't do it--or at least that you won't do it--we now have close to 17 percent of our traffic coming from people directly linking to us. So Webshare has been a good way for us to show non-subscribers the depth, breadth, and quality of the content we have. So I think it's good for us and good for the readers of our content.
And the other 83 percent are paid subscribers?
Well, they're basically paid subscribers, people that are coming and visiting us. We have several different sites, but on the consumer site, we have about 700,000 unique visitors every day.
What's your long-term vision for the site, and for the company? Is it going to continue to be a subscription-based website? Is the paper-based encyclopedia going to continue?
Paper is completely incidental for us. It's not a very important business for us. We continue to do it and it continues to be profitable, but it is a very small portion of our business and an even smaller portion of our profits. Britannica basically is a digital company today. The majority of our revenues come from non-tangible products, both in the institutional market and the consumer space. I read your advice on your blog, and I think your suggestions for business models are faulty.
I think that there are plenty of ways in which Britannica can continue to grow in the future. Many of them are in the e-learning space. Today we have more than than 47 percent penetration in the K-12 market. We have almost 70 percent penetration in the public library market. And these aren't just reference products. These are e-learning solutions around the teacher. We try to be a more relevant source in the classroom as opposed to in the library. There are programs that are linked to the curriculum that are reading level appropriate that are full of lesson plans and interaction materials that are much more part of the learning process as opposed to a passive role in the reference products. There's a huge new stream of revenue coming in from these e-learning products in the K-12 market.
And I certainly didn't mean to suggest that all of those products weren't viable. My focus was more on the encyclopedia.
But that's far from licensing the brand as an empty shell to someone who wants to do something like Napster. That's actually, I think, myopic.
Sure, that's a good point. So in terms of the encyclopedia, the long-term market you think is primarily in k-12 education?
No, no, no. We have very different databases and very different services. We have products that are meant for young kids. We have products that are meant for the middle school market. And there are products like the Encyclopedia Britannica, which is meant for the generally curious lay person. You know, that will continue to be an important part of our business, and it will continue to be an important part of our effort. That database, and the service that we provide for those people that are seeking knowledge and are intellectually curious, you know that product, which I think has great potential.
I tend to disagree with you in terms of your assessment of Britannica vs. Wikipedia. I do think that we are obviously, by the nature of what we do and how we go about it, we are a smaller dataset than that of Wikipedia but size is not the only thing that matters. Timeliness--I tend to disagree with you. We change our articles not every month, not every week, but we change our articles on a daily basis. If things require, we change our articles every 20 minutes. We have a publishing system that allows us to change our articles immediately. We have a publishing system that engages communities and users with our content and allows them to actually spot things that may be not updated and for us to turn our attention to those and actually be able to process those things quite immediately.
Our new generation of products, which you'll see very very soon, you'll see a very different version. You will start seeing completely new features into the Britannica products in the consumer space, where the key thing here is collaboration. It's about ownership of content--not ownership in terms of who owns the copyright, which is completely incidental--ownership in terms of who is behind the content and who is saying what. So you will see really quite a different Britannica and we believe that you will be pleasantly surprised. I hope to be able talk to you six months or a year from now and be able to revisit some of your business model proposals for Britannica. Maybe see if what we're doing is something that you think would be profitable.
By the way, for the record, you mentioned that we have a dwindling number of subscribers. We have grown thanks to the clarity with which the market has in terms of the difference between us and Wikipedia and the other competitors, subscribers in the consumer space have grown 40 percent in the two years. Revenue from the institutional market and in the college market alone has gone up more than 25 percent. So it's not a dwindling number, but a larger market because of some of the factors that you might be dismissive of: factually correct, objective. Not neutral point of view like Wikipedia. We don't strive for that. We think there are reasonable, informed points of view that are worthwhile exploring and letting the reader be exposed to it. We try to reach objectivity by having a fair share of these points and counterpoints being discussed in articles at great length. There's a huge amount of respect for factual correctness at Britannica, for objectivity.
Also, Britannica has an impeccable style that people are able to understand, that people are able to learn from Britannica basic language rules, things that will not be happening in Wikipedia. Obviously, up-to-date-ness is something that we don't relax on. We update the database at the rate of about 30-35 percent per year. A third of the database is completely revised on a yearly basis thanks to the input of our contributors. That's something that is probably much more speedy than Wikipedia. Obviously Wikipedia cannot do that because they are several times as large as we are. So again, a few of the things that I believe are either urban myth or people want to believe or "truthiness" are not necessarily corresponding with how we see it and how we can actually tell you that it is. We do have the numbers with us, and we do have the ability to refute some of these statements.
Can you talk a little bit more about the editing process? You mentioned timeliness, and you mentioned collaboration. One of the things I've found very impressive on Wikipedia is that if a news event happens, say somebody famous dies, it will be a matter of seconds before that's updated on Wikipedia. Does Britannica have something like that?
Yes we do. Editors have the ability to go into the database and incorporate a change as it happens. When it's important, the community will flag it, and an editor will change it in 20 minutes at the most. The editor can go in and publish directly online, and then we actually circumvent the process so when a person is actually changing an emergent fact that has been noticed, the copy-editing department doesn't get involved and the indexing department doesn't get involved. The editor has full power to make the changes that he or she sees as required. This is happening more and more.
These are some of the things we will see more evident. We will be able to not only change more frequently with the help of our editors and contributors with the new site that we will have but we will actually try to make sure that our users and visitors engage with the content much more frequently and use the content also for their own purposes in a different way. So again, it's not going to be a wiki. Britannica will not delegate its responsibility as an editor. I think that you shouldn't delegate your responsibility for what you say. You know, you have your name on your blog, and whether it's true or not, you need to be behind it. We believe that that's really a good model, with the view that the Internet actually provides huge opportunities for Britannica in the future. We believe that we're going to be the first ones to make the process of creating knowledge a really, truly collaborative process without delegating the responsibility of us editors. I think it will be more evident in the next few weeks and months.
One of the trends I think we've seen recently is that search engines have become an increasingly important source of traffic. Is Britannica doing anything to make it easier for people to get to? So if an article comes up in a search engine result, is there a way that people can get access to that article for free or would they have to become subscribers in order to do that?
We are trying some different things in that area. We're actually trying to segment the market, and these are some things that I'm not ready to discuss at this point but we're doing continuous testing with search engines, trying to see what are the different ways in which we can segment the market and allow people to use our content for certain occasions without entirely giving away the subscription model which is still very important for us. It may change in the future or it may not; I'm not really married to the subscription model. I think there's huge potential in the free web for Britannica.
So you think that in the future, the site could become a completely free, advertising supported site?
No, what I'm saying is that there would be a very good version of Britannica that would be free.