Page 170 - Electronic Commerce

Selling on the Web

two weeks to upgrade its servers. The site offered full content of the encyclopedia’s print
edition in searchable form, plus access to the Merriam-Webster’s Collegiate Dictionary
and the Britannica Book of the Year. One of the most successful aspects of the site was
the way it integrated the Britannica Internet Guide Web-rating service with its print
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content. The Britannica Store sold the CD version of the encyclopedia along with other
educational and scientific products to help generate revenue.
Unfortunately, advertising sales were not what the company had hoped. After two
years of trying to generate a profit using this advertising-supported model, Britannica
returned to the mixed model it continues to use today. In this mixed model, the company
offers free online access to summaries of encyclopedia articles and the Merriam-Webster’s
Collegiate Dictionary, but the full text of the encyclopedia is only available to visitors who
pay an annual fee of about $70 for the Britannica Premium service, which is currently
estimated to have about 500,000 subscribers. In 2012, the company printed its last print
volumes, ending 244 years of continuous publication.
Britannica went from being a print publisher to a seller of information on the Web to
an advertising-supported Web site to a mixed advertising subscription model—three major
revenue model transitions—in just a few short years. The main value that Britannica has
to sell is its reputation and the expertise of its editors, contributors, and advisors. After
exploring these different revenue models, the company has decided that the best way
to capitalize on its reputation and expertise is through a mixed revenue model of
subscriptions and advertising support, with the bulk of its revenue coming from
subscriptions to its premium service. Britannica also generates revenue by selling books,
CDs, DVDs, and software with an educational theme through its online products store.
The New York Times Web site has gone through several revenue model transitions
since opening in the mid-1990s. Originally, the site was purely advertising supported and
included most of the content in the print edition of the newspaper. It has always charged
a subscription fee for its premium crossword puzzles and chess columns. The first
revenue model also included a fee for access to older articles stored in the newspaper’s
archives.
In 2005, The New York Times decided to limit access to much of its most desirable
content to subscribers and began charging a fee for access to its Op Ed and news columns.
The fee also allowed access to the crossword puzzles and the older articles in the archives.
All of the limited-access content was also available to print edition subscribers. This
program brought in about 227,000 subscribers, which at $44.95 per year generated about
$10 million in revenue.
By 2007, the newspaper had become convinced that it could earn more advertising
revenue by providing free access to those pages than it was earning in subscription fees,
so it went back to relying on an advertising-supported revenue stream. The newspaper
charged only for access to the crossword puzzles and for older articles in the archives.
With this change, the traffic to The New York Times Web site nearly doubled, reaching an
average of 30 million unique visitors per month. However, the recession of 2008 caused
advertising revenue to drop and the company began considering other alternatives.

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