Moving the Unit of Sale from Print Materials to Digital Media

John Richards, Consulting Services for Education

Michael Campbell, Follett

Duncan Young, Scholastic

George Kane, Pearson Education

Moving the Unit of Sale from Print Materials to Digital Media

John Richards, Ph. D.

Consulting Services for Education, Inc.

Innovator’s Dilemma (Clayton Christianson)

• Why do well run companies who listen to their customers fail?

• Why do industry leaders fail to make the jump to Disruptive Technologies?

• Not enough $$$ to make a difference• No demand from existing customers• Disruptive Technologies emerge in niche markets

Print to Digital

• In 1972 there were between 25 and 30 Basal Reading publishers

• Today there are 3 (4 if you count Scholastic)• Can textbook publishers move to digital publishing?• Free with purchase• What is the niche market for the emergence of digital

media?

Moving the Unit of Sale from Print Materials to Digital Media

Michael Campbell, Follett

The Content Need

• Traditional Print Content moving to digital formats.– Textbooks– Supplements– Assessment– State Standards

What is needed to make the switch

• Format/Delivery– E-book readers– LMS Systems– SIF Standards Cooperative– Academic Benchmarks

Value - Pricing

• Textbook Models• Tagging learning objects• Open Source

Business Models

• Traditional Publishing Model• Modified Publishing Model• New Models

Moving the Unit of Sale from Print Materials to Digital Media

Duncan Young, Scholastic

Digital Fragmentation Lessons from the Music Industry for Education)

12

What is Digital Fragmentation?

• Shift of the unit of sale from print to digital

• Shift of the unit of sale from the whole to the part

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•Decrease in distribution barriers- e.g. iTunes does not have the physical constraints of a bricks and mortar store

•Increase in the breadth of providers bringing innovation to the market- E.g. easier for independent bands to find an audience (the “long tail”)

•Decrease in the power of traditional producers- Major labels

•Increase in the power of companies that sort, vet and contextualize content- Apple, Pitchfork Media

Digital Fragmentation in the Music Industry

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What Causes Digital Fragmentation?

•There are sufficient enabling technologies and standards

•The “part” is equally as valuable as the “whole”

•There are no artificial or regulatory barriers to adoption

Digital Fragmentation will occur rapidly if…

Music Education

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So what can we predict about digital fragmentation in education materials?

•The “Digital” piece of digital fragmentation has happened and will continue to happen- Some delays as teacher habits, funding sources, standards “catch up”

•The fragmentation piece will occur in some forums, but there will always be room for pedagogical approaches that result in the whole being greater than the sum of the parts (more “opera” than “pop song”)

•There will be an explosion of home grown and user content that in theory is available to everyone- However, there will be an increased need to evaluate, sort, and vet that content, and for students to learn these skills

Moving the Unit of Sale from Print Materials to Digital Media

George Kane

Pearson Education

Pearson’s Digital Initiatives

• eBooks: embedded & stand-alone• Digital content for smart whiteboards• MyLabs• Mobile delivery experiments

MyLabs drive salesProduct Line MyLab Program `08 Student

Registrations`07 - `08

$ Increase*

1. Math MyMathLab 1,437k $29.3M

2. IT training MyITLab 265k $10.8M

3. Prin of Econ MyEconLab 163k $3.7M

4. Gen Chem MasteringChem 155k $6.4M

5. Gen Physics MasteringPhysics 138k $2.3M

6. English Comp MyCompLab 135k $3.5M

7. Gen Biology MasteringBiology 105k $13.1M

TOTAL: $69.1M

* = US HE sales

Growth in direct-to-student sales

2.2 M total registrations$6.01 M (7.2%)

2.9 M total registrations$11.9M (9.3%)

4.3 M registrations$23.1M (11.3%)

1.1 M registrations$10.3M (17.1%)

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Challenges

• K12: different purchasing dynamics than HE• “Customization” vs.“Personalization” vs.“Roll your own”• High-value content-based use cases for mobile devices• Lack of standards for learning environments and content• Digital copyright protection