nfais 2013

Michael CairnsManaging PartnerInformation Media Partners

The End of the Middleman

Predicting the future of education publishing

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Content “platforms” are the future

• Extensible– Proprietary content– Applications– Source data– User data– Third party & free content– etc, etc, etc.

3

4

Let’s add some

‘functionality’

Photograph: http://www.jack-nicholson.info/biography

Thinking helps & ideas happen

• The medical ‘simulations’ market– Merging traditional content with practice– Creating new content for specific practice

• Self-publishing for faculty– Custom textbooks– Applying technology to improve process

• State-wide initiatives to disintermediate

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Innovation is still on the fringe

• Book publishers have absorbed the implications of digital publishing

• Linked all the parts together

• Haven’t addressed long term scenarios

• Big change remains and will come rapidly

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YOU!Don’t lull yourself into

complacency as though nothing can change until

your only option is to close up shop, sell the

few remaining stocks of printed matter you retain,

go on the dole and become a weight on

society where you end up having to take out eBooks at the library!

Where to look

• Slowing growth rate of ebook sales

• eReader devices losing out to tablets?

• Students dislike eReaders for textbooks

• The big trade book merger

• The bigger textbook divestiture

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Activity in 2012

indicates there are

bigger changes upcoming not less.

Photo: Universal Pictures

Corporate Dev 101

• Cost & expense

• Economies of scale

• New market(s)

• Expertise

• Technology/secrets

• Eliminate competition

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Why Random Penguin?

• All about scale

• Reducing factor costs

• Consolidating operations

• Compete for bigger authors

• Is it cynical?

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Watch 2013 bringing gifts….

• More combinations in trade

• Cengage & McGraw Hill?

• Pearson: Already in year six

• Will business model begin to collapse?

• Basic questions: who, what, how, when, where concerning education– Fundamental: Who is the ‘student’?

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2013

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What’s the platform Kenneth ?

A successful platform

• Branded content vertical

• Workflow solutions and technologies

• Common taxonomy and ontology

• Consistent revenue model

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Maybe it wasn’t his fault…..

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Two years of college

down the drain!Photo: Universal Pictures

Education & economic value

• Today, creates debt– Tuition– Non-productive workforce

• Most old industries are tradition bound– Education no different– New economic value created in many sectors

• Drivers: New models, wider access, better outcomes

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Destroyers or value creators?

• Air BnB

• Zipcar

• Expedia

• Craigslist

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Destroyers or value creators?

• Air BnB

• Zipcar

• Expedia

• Craigslist

• Facebook

• Amazon

• Walmart

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Sadly, there is no ‘friend’ in Beverly Hills

Platforms network transactions

• Normalize a set of behaviors

• Facilitate communication

• Transact information, goods & services

• Network effect drives usage & utility

• Provider costs decline

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Have I got a MOOC for you!

• Massive Open Online Courses– Direct to student model– Unlimited class size– Branded faculty abandoning tenure

• Coursera, Edx, Udacity• Delivery unsettled – textbook still reigns

– Custom– Self-publishing– Ebooks

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What do you mean there’s a test?

• Assessment– Strong impetus in K-12– Becoming important in college & post grad

• Adaptive learning– Tailored to individual capability– Self-regulated/directed– Empowers learner

• Bigger in post college market?

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Is it just about ‘access’?

• First year class size is stagnant

• Applications have exploded

• 150,000 students signed up

• Top ten ‘graduates’ were ‘non-students’

• There’s a whole new world out there

• Brand protection and extension

• Model not perfect but not intractable

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Nathan says ‘it’s all over’…

• “In 50 years half of the 4,500 colleges and universities will be out of business….”

• The End of the University as We Know It– American Interest– Jan/Feb 2013– Google the title: http://www.the-american-

interest.com/article.cfm?piece=1352

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Education is failing

• New hires aren’t qualified

• Student debt

• Unaccountable administrators

• Public funding

• Free content

• Research & experience suggests education doesn’t have to be personal

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Indiana University

• Campus wide course materials platform

• Negotiate with publishers

• All content made available

• Revenue model based on headcount

• No returns, used books, 100% sell through– Pay’s with higher discount

• Schools executing their negotiating power

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Platform as gateway?

• Will winners control access?

• Platform providers promise an audience?

• Are walled gardens a good solution?

• Mélange of players:– Amazon, Blackboard, Ingram, EBSCO,

Pearson, Desire2Learn– Could state system ‘own’ a platform?

• Physical boundaries of schools erode

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Campus content indexed

• Coursload – Product catalog, library, archive, collaboration tool, publishing toolkit, learning support, access point via API

• Collects content assets:– Licensed materials – library– Teaching materials – faculty & university

archive– Research materials – faculty, press, etc.

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The Innovators

• Many new entrants in education• PE investment accelerating• Eventually ‘run out of market’ with

consolidation – but years off• Opportunities: workflow, training, content

management, productivity, etc.• MOOCs already creating workable models• Innovators are addressing and solving

problems 28

Conclusion

• Gap between college and business needs creates identifiable financial exposure

• Public policy drive to improve outcomes

• Network effects and technology make material improvements possible

• Other industries prove the possible

• Platform becomes ‘biosphere’ or ‘operating system’ for educators and students

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Michael Cairnsmichael.cairns@infomediapartners.comManaging PartnerInformation Media PartnersBlog: personanondata.blogspot.comTwitter: @personanondata

The End of the MiddlemanPredicting the future for educational content