Articles Posted in K12 Publishing

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Open Educational Resources (OER) are here to stay.  Publishing, despite the rumors, is not dead.  The real question is not “if” but “how” these two options will co-exist in the instructional materials market.

A starting point is sorting out where each type of resource makes the most sense. For me the two most important criteria are the degree of complexity in crafting the materials and the ongoing requirements for maintenance.  How these two criteria map against content looks something like this:

OER vs Print

Degree of Complexity

The range of materials teachers draw on to support their work in the classroom is vast.

At the low end there are simple black and white worksheets or practice learning tools (e.g. flash cards).  These tools are simple enough that a single person, or a small handful of folk, can quickly make them.  Quality is important, but in this regard accuracy is valued more than design.  Distribution is typically on paper or PDF.  Requirements for efficacy studies are low or non-existent.

At the high end there are resources like video games where the act of creation involves coordinating large teams with diverse skills.  The complexity requires professionals who specialize in a range of crafts (project management, coding, game design, illustration, audio engineering, user testing, interface design, efficacy research, rights management, etc etc etc).  In the quality arena both accuracy and design have to meet high standards for the product to be usable.  Distribution requires explanation (sales), professional development, and a student progress monitoring platform.  Educators demand large scale efficacy studies and clear evidence of alignment to standards.

Ongoing Maintenance

As more materials move to on-line distribution we are shifting to a world where instructional resources live in an ecosystem outside of the classroom.

Paper based products and digital worksheets stand on their own once they are purchased.  These products don’t need any ongoing maintenance other than some duct tape and spell checking.

But as more and more resources move to the web they live in a complex ecosystem that is both technological and cultural. On the tech side web platforms have to be constantly updated to protect against security gaps, file formats evolve with new releases, operating system updates create new bugs in software, and hardware platforms are evolving rapidly towards touch interfaces and new screen resolutions.  On the cultural side standards get updated, new linkable content is constantly being created, and best practices change as new research is released.

For for most web based products ongoing maintenance is not optional.  Without it products can be rendered useless overnight by the decisions of outside actors. Sustainability in a world of impermanence is value added.

Summary

Applying these two filters provides some guidelines for where OER makes the most sense and where schools should be looking to professionally produced content.

For publishers there will always be a market for simple worksheet like products, saving teachers time in a busy world has value.  But this will be a business of low margins and intense competition.

Publishers would be better served by focusing on more complex products where complex teams add value and where ongoing maintenance is not optional.  Innovation, quality, and support will be the new vectors of competition replacing distribution networks, operational efficiency, and process refinement.

To compete globally a publisher has to do all of those things, but the relative emphasis is shifting.  Are you?

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In January 2001 as the dot com boom burst online education site wwwrrr.com went out of business overnight, literally. Coverage tended to focus on the employees – who ultimately filed a class action lawsuit for back pay and 401k contributions.

Lost in that ugly coverage was the blunt reality for teachers and schools that the new era of on-line content had a very dark side. Teachers who were relying on wwwrrr’s materials on January 9th were left with absolutely nothing on January 10th. They had no warning.

When schools buy a textbook they own the thing. If the vendor stops offering the book the school still has the thing. With cloud-based solutions schools are buying a license to a service. If the vendor stops offering the service it evaporates. Teachers rightly want some assurance that if they integrate a useful solution into their lesson plans that they can use it for several years.

There are enormous benefits associated with cloud-based materials (see below*). As the wwwrrr story illustrates there are significant hurdles to overcome as well.

The trick is to find a business model that insures products will be supported and sustained over the long haul. At the heart of this challenge is the question of how cloud-based instructional materials are priced. As we transition from physical textbooks to digital content we need a pricing model that is fair to everyone.

Pricing for cloud-based instructional materials will probably not look like the enterprise or personal SaaS markets because there are some unique structural issues that have to be reckoned with.

This post examines the market forces that are driving an emerging standard for SaaS pricing in education.

Production & Maintenance

As soon as textbooks are at the press the product becomes inert which is one of the big knocks on them. The benefit is that a book can be useful in and of itself decades after it was published. There is no ongoing maintenance.

Software is more like a living organism that has to survive in a larger ecosystem. OS revisions, bug squashing, content updates, and new hardware platforms make ongoing maintenance an imperative. Software evolves as the platform evolves, sometimes on a daily basis.**

This means that publishers have to dedicate teams to the product after it is released, and those people need to be fairly compensated for the work they do. There is a need for an ongoing revenue stream to support this vital work.

Enter Subscription Pricing

The obvious solution to this problem is to sell the software as a service (SaaS) on a subscription.

Software as a Service (SaaS)pricing models are well-established in the corporate and personal software spaces. SalesforceEvernote  Netflix  and Google  have proven and accepted business models. In the education space, the Student Information Systems (SIS) market has gelled around standard subscription practices. SaaS instructional materials remain a laggard. The transition from the old adoption model for textbooks to something better adapted to digital content is very much in motion.

Investors are pushing hard for subscription models – they like the predictability of a steady stream of income. Since subscriptions cost less on an annual basis than a purchase it takes longer to spin up to profitability, but performance is much more sustainable over the long haul. Thus VCs and Private Equity investors place a valuation premium on this model.

The obvious result has been a slew of subscription-based educational software startups over the last several years.

Spiky Funding & Market Cadence

Subscriptions in schools run smack into the uncertain nature of school funding, particularly for materials purchases. There is no guarantee from year to year that a given funding source will be available.

The market solved this for print by doing adoptions on a scheduled refresh cycle (usually 5-7 years) for each subject area. Funds are specifically (categorically) set aside for this purpose. A big burst of funding over 18-24 months buys all the books, and then a small residual fund is available for replacing damaged or missing books through the tail of the adoption.

This funding structure is very unfriendly model for subscription-based products because the funding is so spiky.

That said, the cadence of switching core materials every 5-7 years makes a lot of sense for teachers. It usually takes them a couple of years to master a new set of materials, which they can then leverage into another 3-5 years of practice without having to completely start anew.***

Additionally, all the review and approval mechanisms are tuned to this cadence at the state, school board, and teacher level. There will be significant institutional inertia to something like an ongoing or even annual cycle for new materials. Educators are pressed enough for time already.

Think of the 5-7 year materials cycle as the QWERTY keyboard of purchasing. It will survive long after its original purpose has been obviated by new technology because the switching costs are so high and it still solves the basic problem.

An Education-Specific Solution

What appears to be emerging is the ability to pre-pay subscriptions over a set of years that mimics the traditional adoption cycle. This maintains the cadence that everyone is familiar and comfortable with, without presupposing the funds will be available through the full cycle. Schools can buy a single year if they just want to try something out, but the best pricing options are all at some level of multi-year commitment. There is no doubt that schools are buying a subscription-based service not a physical product, but the purchase cycle mirrors the older product purchase model.

From the vendor perspective cash flow will look very similar to today, but revenue recognition on the income statement will take a big hit in the initial years (subscriptions have to be recognized over the life of the subscription). Dollars you collect today won’t be recognized for up to six years and will sit in an unearned income bucket on the balance sheet.

Investors should plan on revising their analyses of financial statements to account for these shifts. I expect to see a much higher emphasis on cash flow than EBIDTA in this new world.

Vendors should be careful about managing cash to make sure the resources for maintenance are available through the life of the contract. This isn’t a windfall for them. Even though the cash is in the bank they should budget to the income statement.

A multi-year subscription requires a level of trust that the vendor will be around through the full term. This will play to the advantage of larger companies and those with well-established brands.

I expect this model will emerge as the dominant pricing structure over the next 2-3 years. That will be a good thing for teachers, students, and vendors. It will help fuel a new generation of innovative solutions.

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*Using the cloud solves a wide range of problems schools face when deploying instructional software.

A quick review:
Installation and maintenance evaporate – this is a massive headache for thinly stretched School District IT staff.

  • Software is no longer hardware dependent, well-crafted solutions run on older computers and the latest tablets.
  • User authentication is based on where the user is, not what machine they are using.

From the vendor’s perspective many of these benefits have a mirror image.

  • Minimal set up makes it easier to trial and implement new solutions, reducing transactional friction.
  • It is possible to paint a path forward to tablets when they are still a small fraction of the market.
  • With web-based authentication, it becomes easier to see what is getting used   (i.e. what is valued in the classroom).  Do.  More.  Of.  That.

The forces of change are all lined up behind this shift.

** This by the way is one of the primary filters educators should be use to evaluate OER solutions. All software needs a clearly sustainable source of funds for product maintenance. Unsupported solutions have a high risk of becoming unexpectedly obsolete in the middle of a school year because something in the larger ecosystem has shifted.

*** This is based on the the teacher’s own learning curve. In the textbook world it is understood that student outcomes do not improve in the first year as the teacher adapts the new tools to their unique needs and style. Typically benefits start to emerge in the second year and are not fully established until the third year. SaaS, with a one year subscription cycle, asks teachers to make a renewal decision based on their own challenges from year one. The obvious result is lower renewal rates. This isn’t a new problem,  the pattern is familiar from print. But the ability to walk away from the digital materials after one year means they don’t have enough time to generate meaningful improvements.

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Texas has been a vocal holdout on adopting Common Core State Standards (CCSS) since the beginning.  Last week all 14 publishers who submitted high school biology textbooks for adoption in TX ignored the state’s demand to include creationism.  I believe these two news items are directly related and reflect a huge shift in the market dynamics for instructional materials in the United States.
 

Partisans think the creationism kerfuffle is because the publishers are taking a principled stand for scientific accuracy or, conversely, because they are elitist liberals.  In some cases these may have been factors in publishers’ decisions.  That said, I think it is much simpler and can be explained by following the money.  For the publishers this was a business decision, not a political stand.

 

This is the clearest example to date of how CCSS is going to reshape who gets to dictate the overall  structure and content of instructional materials.  The hypothesis I floated in 2010 - that the combined market power of smaller states could steal the march on the big 3 (TX, CA, FL) – appears to be  happening.

 

CCSS is influencing every decision publishers make about prioritizing investments in new products.  The fact that this is a biology textbook, while CCSS only covers RLA and Math, only reinforces my point.  RLA and Math account for roughly 70% of overall materials purchases so publishers won’t take any risks that jeopardize their position in those subject areas with the center of power in the market.

 

A couple of charts make this point more clearly than words can.

 

This first chart shows the market pre-CCSS.  There were 50 individual markets and the states that had formal adoption processes had almost all the power to dictate what got written and when.  When big states committed to purchasing large amounts of a single subject area in a specific year it made sense for publishers to hit those dates with fresh product.

 

This chart shows the top 10 adoption states, and you can see that even within this group California and Texas dominated (click to enlarge).  CA, TX, and FL* all represented the biggest buckets and lowest hanging fruit for sales.  Everyone else got warmed over, slightly tweaked versions of materials created for the big 3.
Chart - Top Adoption States
This second chart shows the new market structure with all the CCSS states, Texas, and the other 3 holdouts (AK, NE, VA).  I don’t think the shift could be any clearer.  Instead of worrying about offending the panjandrums in TX publishers now have a very different equation.  Note the shift in the scale on the Y Axis in particular.
Chart Materials Post CCSS
This is what publishers see today when they evaluate how to prioritize development decisions.

 

Somebody in California clearly got the memo because they are actively investing in taking the lead within the CCSS states.  The recently released budget includes $1.2 billion in one time funds for implementation of CCSS in 2014-2015 to cover training, materials, and other preparedness.  This will get publishers undivided attention and will be the engine that pulls the CCSS train.

 

Texas will not become irrelevant, but it will lose its power over publishers that allowed its instructional decisions to reverberate nationally.  The internal politics of the state are not conducive to adopting CCSS so I don’t anticipate this trend will change over the next several years.

 

The state has every right to make this decision and they appear to be willing to live with the consequences to maintain their individualism.  It remains a large market – $1.3 billion annually in instructional materials – they also spend slightly more than the average state on materials – $274/student in TX vs. $261/student nationally.  For those reasons it won’t fade away completely.

 

But if I were employed at one of the large outposts education publishers have built in Austin, San Antonio, and Dallas I’d be looking over my shoulder as the bigs consolidate offices into New York, Boston, and Chicago.  Or I’d research real estate in Sacramento.

 

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*Florida has also been a powerhouse despite being smaller than CA and TX largely because it is organized along just a few very large county wide districts.
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Merge sign

The Association of Educational Publishers (AEP) and the Association of American Publishers School Division (AAP) announced their intent to merge last week. I’m currently the Board President at AEP. As one of the principals in the deal I thought it would be useful to share my perspective on why we are combining forces.

Why does an association exist?
It helps to start with a quick review of why professional and trade associations exist. Speaking only for myself, these four issues form the core of why I have invested time in several associations over the past 20+ years.
  • Associations water networks of influence. By providing a neutral ground where industry leaders can meet associations provide for idea diffusion, business development, evaluation of issues of common concern, and expanded professional relationships.
  • Associations advance the policy positions of a group with shared interests. An industry that is subject to the shifting policy positions of government needs to track those changes and have a platform for making our voice heard in the discussion.
  • Associations provide professional development for industry specific needs. Educational publishing has some quirks. As new people enter the industry or advance within companies formal training programs accelerate their effectiveness.
  • Associations advocate standards of professional practice – They do this indirectly through awards and recognition programs that validate the best work going on in the space. They also do this directly through participating in the development of standards.
In the spirit of “if you don’t like the news go out and make some of your own” I think having a seat the table for these issues is important for companies and individuals. If you are not engaged in your association you are missing significant opportunities to leverage your company’s position in the market.
While these benefits of associations are relatively timeless the specific way they are instantiated needs to map to an ever changing world.

What Has Changed?

In the past 5 years the educational materials market has shifted dramatically. Three trends in particular have driven this change.
  1. The shift to digital content, driven by tablets and LMS platforms. This is affecting virtually everything about how educational publishers are structured and is reshaping product development, distribution, patterns of competition, and investment priorities. Our professional networks and professional development need to follow suit.
  2. The emergence of Open Educational Resources (OER) as a viable option. The shifts that digital libraries and user generated content have caused in other IP based markets are now reshaping the educational publishing landscape. OER itself is a positive addition to the mix (many publishers are embracing OER). However, in the face of “free” content the old distinctions between basal and supplemental are relatively unimportant. We need a voice for high quality, professionally produced, pro-grade tools that save teachers time and save schools money.
  3. Purchasing processes are merging. It used to be that schools purchased digital content very differently than print content. They also took very different approaches to buying core programs vs. supplemental materials. Now schools demand that all programs have digital components and they are looking to address the needs of all learners with core and supplemental resources at the same time. In other words, the rationale for distinct professional associations that supported core vs. supplemental or digital vs. print have evaporated.
On top of these long term macro trends we have the short term impact of the the economic crisis and its concomitant impact on school budgets and priorities. This is accelerating changes in the buying process that would normally have taken much longer. States are moving away from highly structured basal textbook adoption processes to create new opportunities for more modern content (digital, subscription, blended, etc.).
This is a great thing for innovation and is creating room for new entrants in the industry. Our associations need to be a welcome home for these new players by reflecting the needs of the new market.
Why AAP and AEP?
In this changed world the educational materials industry needs to be able to speak clearly about how these changes can be effectively implemented. While Publishers have been adapting internally (e.g. Pearson’s reorganization last week) our trade associations are still organized around old models of industry structure.
The old structure reflected the following distinctions between vendors.
  • Basal vs. Supplemental. As a general rule AAP was largely seen as representing the large basal publishers while AEP concentrated on the supplemental space. The changing purchasing patterns are eliminating this distinction.
  • Large vs. Medium/Small. AAP has historicaly been the domain of the largest publishing houses. AEP was scrappier and focused more on the needs of the mid-market and smaller companies. In a rapidly evolving market with uncertain outcomes getting all the innovators together makes good sense. The large companies can deploy at scale and the small guys can iterate innovations rapidly. Many companies were members of both associations, but often to address the needs of different parts of their organization (see Basal v Supplemental in particular).
  • Print vs. Technology. Since schools themselves had different decision making processes for buying books vs. tech it made sense to have separate associations. AAP tended to be more print focused, AEP was a blend of print and digital, others focus solely on digital. Since schools now demand blended materials this distinction is no longer relevant in policy. This is also creating an urgent professional development need, one of the central challenges publishers face is blending the radically different paradigms of print vs. technology development.
To sum up, old patterns of organizing ourselves are no longer relevant. What is of paramount importance going forward is an association that can provide a voice for high quality, professionally produced, blended instructional resources and tools. This lies at the heart of the merger.
What is Next?
The high level details of the merger can be found in the announcement.
Next week at the Context in Content Conference (jointly sponsored by AEP and AAP) we’ll have multiple opportunities to dive deeper into the specifics. Tom Allen, AAP’s President and CEO will address the conference first thing on Monday June 3rd and we’ll hold a vote of the AEP membership on this on the morning of Tuesday June 4th.
Attendance for the conference continues to increase year over year, and if you are not already planning on being in DC next week I encourage you to try and make it. You will learn a lot, make valuable new connections, and have a voice in how the industry moves forward.
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DSC04543

The Common Core Standards are causing a lot of angst across the world of education.  Fortunately Brandt Redd is here to help.

Over at Of That he lays it all out in a lucid and well linked overview “The Common Core State Standards – For My Concerned Friends.”   He cuts through the BS clearly and cleanly and describes how CCSS fits in the overall scheme of the Gates Foundation’s vision for personalized education.

Last week’s announcement by the Republican National Committee (RNC) that they are opposed to CCSS has added to the uncertainty hanging over the direction of the market in the next 3-4 years.  If CCSS becomes more than minor skirmish in the political wars we’ll have a period of extended uncertainty about how materials should be crafted.  The angry maw of lens hungry politicians could make a six course meal of various conspiracy theories.

Take the five minutes to educate yourself and read Brandt’s piece, then you can tick off the following competency for being a member of the education community…

CCSS.EBB-Industry.L.8.5 – “Articulate the contribution CCSS is expected to play in the path to individualized learning.  Compare and contrast with historical standards and models.”

You should probably also read the RNC’s resolution to understand their perspective on this issue.

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Operations Department Sign CAEducation publishers have taken a lot of fire in the last few years – many believe that we are too big, too powerful, and that things would be better if teachers just wrote their own materials or used free stuff.

So why do we continue to exist? Are publishers a necessary evil soon to be eliminated by a tsunami of free OER content, or is there an ongoing beneficial role in public education that publishers can fill?
This post is one publisher’s take on what justifies our place in education. This isn’t intended as a direct refutation of critiques of publishers, any industry as large as ours (over $10 billion) has plenty of opportunities to improve what we do. Rather, I focus on some of the lesser appreciated positive contributions we make. It also isn’t a takedown of OER materials, which have earned a permanent place at the table.

So howl away at how boring some materials are and at what scumbags we all are*, but take a few minutes to look at this issue from a different perspective.

The key points are:

  • Publishers save teachers time.
  • As professionals teachers need pro-grade tools
  • We help keep the extremists at bay.
  • Publishers help innovative best practices spread quickly.
  • Publishers externalize the risks of R&D while provisioning a thriving marketplace for instructional ideas.
  • Commercial platforms provide long-term sustainability, particularly in the digital age.
  • K12 Publishers save schools money.

In what follows I don’t make a distinction between types of publishers,** I’m speaking in broad generalizations about the industry as a whole. Thus, for every assertion I make I can guarantee there are exceptions.

Publishers save teachers time.

If you sit and listen to teachers you understand that the single most precious resource in their lives is time. Class sizes have expanded, prep periods have been eliminated, mandates and tests have proliferated, and teachers still have a life and families outside of work. A high school teacher with 4 sections of a class can have 110-130 essays to correct for a single homework assignment.

Anything that takes teachers away from working directly with students undercuts their ability to fulfill their central role in learning. By purchasing materials that have been carefully designed to support good classroom practice teachers can focus their energy on students.

Artisanal curriculum sounds nice in theory, but in practice it isn’t practical for the vast majority of teachers given all the other demands on their time.

As professionals teachers need pro-grade tools

Teaching is an art and a profession. Educators demand research to support product claims and have become quite discriminating about evaluating materials. In response publishers use a disciplined creative process to create well crafted, classroom tested, research based, and engaging materials.

I’ve often heard educators complain about parents who think they know how to run a modern school because they went to school 20 years ago. They have a point. The notion that anyone who has used a textbook can write professional grade resources is just as demeaning to the craft that publishers practice.

Yes, there are some highly skilled teachers who also have strong project management skills, peerless writing talent, deep editing discipline, graphic design chops, software coding expertise, and a knowledge of the legal framework around IP. But they still have 120 essays to correct this weekend.

Or, more likely, they are already working at a publisher. A significant majority of product developers at educational publishers have classroom experience. Publishing is their advanced craft, learned by apprenticing with others who have made the same shift from teaching. At root they are still educators, they have just chosen to work on a broader canvas supporting frontline educators.

We help keep the extremists at bay.

Publishers have to keep track of acceptable use policies on a national scale, which provides a level of insurance to local decision makers that the materials have been carefully screened for objectionable material.

There are legitimate gripes that sometimes this results in materials that don’t address controversial subjects as honestly or thoroughly as they should, but in this regard publishers are responding to the need not creating it. Most School Boards don’t want to be on the front page of the local paper because someone got their knickers in a twist over an issue with a textbook, so purchasing processes tend to encourage toeing the line.***
Then, when things do go bad we provide a convenient scapegoat. Most publishers assiduously go out of their way to avoid this, they want to be in the local paper even less than the school board. But it comes with the territory.

Publishers help innovative best practices spread quickly.

Publishers have a competitive imperative to stay on top of rapidly evolving research, standards, and assessments.

For time beleaguered teachers innovative products often serve as the foundation for new practices in the classroom. A good case is SDAIE and SIOP for ELL instruction. The foundations for these approaches came out of academia, but the publishers who embraced them and wrote materials around them supported their diffusion across the market.

It isn’t just a case of building the products, distribution is also essential to spreading ideas. Education in the United States is a vast enterprise, second only to the military in size, and typically one of the top 3 employers in any city or town. Unlike the military there is no true centralized control, education remains a distributed process – 50 states, 16,000 districts, 110,000 school sites, 3 million teachers.

Raising awareness for new ideas in a fragmented market is a massive undertaking. Having the scale to reach broadly with new approaches requires organizations with strong distribution networks. National educators organizations like ASCD and IRA are one leg of this stool, publishers are another.

Publishers externalize the risks of R&D while provisioning a thriving marketplace for instructional ideas.

The risks that publishers take in creating materials allow educators a wide range of choices appropriate to their students, budgets, and infrastructure.

A Google search for “commercial first grade reading program” returns over 60 million results. No, there are not 60 million separate programs, but this is evidence that there is a boat-load of commercial content available.

More often than not these materials are created in partnership with researchers and academics who serve as the authors or designers of the programs. Bringing their ideas to life takes the financial, production, and distribution resources of a publisher.

Schools can then test competing products/ideas at scale in the real world to see what delivers the goods.

Commercial platforms provide long-term sustainability, particularly in the digital age.

The average basal program is used for at least five years. There is a lot of efficiency for schools (and taxpayers) in using a good program for as many years as they can. Programs like Plaid Phonics and SRA have been continuously offered and incrementally updated for decades.

More critically, educators now demand that all products have digital components, even those with a lot of print materials. It is one thing if a publisher goes under and a school still owns the books – quite another if they are relying on a website and it goes dark. Software requires ongoing enhancement and maintenance.

Products that are grant supported die when the funding stops. Companies have more flexibility to pitch and roll with funding shifts and can bring to bear resources to maintain and support products for the long haul.

K12 Publishers save schools money.

Given the hyperbole around the (always “outrageous”) cost of textbooks how I can make this claim? Most people conflate the cost of higher education textbooks with K12 textbooks, but the markets are fundamentally and radically different. The notorious $200 textbook is a creature of academic niches in higher education, not general purpose textbooks and materials in K12.****
The average K12 textbook (including ancillaries) costs about $60 and is used for 5-7 years at a cost of $10 per student. For high quality, professionally designed, and academically sound materials that save teachers time this is a great deal.

A basal reading program can cost north of $30 million to produce. Because publishers can spread the development costs across the entire country they can keep these prices down. If a state or district decided to do this on their own the cost would be exponentially higher per student.*****
Conclusion

Taken as a group these benefits outline some of the positive contributions commercial publishers make in education. Associations, universities, think tanks, foundations, non-profits, and government at all levels provide these same benefits and many others, but only publishers cover this particular combination completely.

A state could chose to write their own curriculum, but that would more expensive and restrict the choice districts and teachers have to meet specific needs. Foundations sponsor OER repositories, but the consistency of design and research support behind most of the materials is non-existent. Associations help spread ideas but they don’t have the risk capital to develop robust programs.

In the next ten years we will see a profound shift in the products and services publishers provide. They will be more digital, will include more professional development, and will evolve with standards and research findings. But the benefits outlined above are independent of platform, media, and ideology and should always have a place at the table.

______________
Footnotes & Editorial Snark Repository

* In the midst of the reading wars an entire company I worked for was referred to this way by a high ranking government employee who disagreed with our pedagogy. Classy.

** I include basal textbooks, supplemental materials, software, professional development and cloud based services from commercial providers.

*** My personal favorite along these lines as was a middle school biology game. One of the characters was a slob who was prone to illness as a result of his less than stellar personal hygiene. The designers built him with a visible butt crack – which would have tickled middle school funny bones while making an instructional point. His pants were pulled up in the final product to avoid controversy.

**** In higher education the decision maker and the buyer are different – professors select materials and students buy them. In K12 the same institutions selecting the materials also provide the funds to buy them – providing an economizing incentive entirely missing in Higher Ed. In addition, in Higher Ed the student as purchaser has little bargaining power. K12 buyers are usually Districts or even states – the institutional nature of the buying process and the bargaining power of the purchaser create a much more level playing field.

Nevertheless market forces are creating the same economies we see in K12. Services like Chegg rent books. There is moral pressure being applied to professors to select reasonably priced materials.

That said, it is unrealistic to assume that a specialized book on Nanotechnology ($180 at Walmart.com!) will ever achieve the kind of economic scale that it can be priced the same as a High School Physical Science program ($69).

***** More expensive for the state which has to fund the development and maintenance – but maybe not for the districts who then get it for “free.” From a taxpayer standpoint it isn’t more efficient – it just buries it somewhere else in the budget.

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PCI LogoPCI Education was sold to PRO-ED, Inc. in mid-December 2012. Since then I’ve fielded a lot questions about the sale. This post is an attempt, from my perspective as PCI’s former CEO, to answer the big questions in one place.*

What Is The Rationale For The Deal?

There are several good reasons for combining the operations.

PCI has long been a large distributor of PRO-ED products, particularly the EdMark Reading Program. There were obvious efficiencies in putting the two organizations together.

PRO-ED has two business, one very much like PCI which the PCI operation will fit into naturally. It is a good home for the mission and purpose of PCI.

PRO-ED also has a clinical and specialized assessment business. PCI was not in assessments, but many of our products will benefit from a closer affiliation with relevant tests.

What Kind of Deal Was It?

PRO-ED made an asset purchase of PCI’s products, brands, and distribution business.

What Were The Terms?

Both companies are privately held and don’t release that information.

What About PCI’s People?

PCI had enough lead time to help its staff start preparing for a transition, running a regular workshop on strategies and techniques for a modern job hunt. As of today about half of the staff have landed in new positions. This made the actual sale less traumatic than most I’ve seen – people were aware the news was coming and had been given tools and resources to help them get a jump start on making the change.

For PCI employees the sale was the end of a life affirming mission. When we sold products something good happened in the world – a struggling learner got help. Many of the employees have a personal connection to individuals with special needs. For others the opportunity to serve was an essential part of why they worked at PCI.

PRO-ED has been able to absorb PCI’s operations without taking on any of PCI’s employees. Many good people with a strong background in developing, selling, and supporting products for special needs populations are available – if you are interested my contact information is on the blog.

I’ll write another post about my own plans for the future, but in a nutshell if you need a consultant/advisor or are looking for a CEO/GM give me a buzz.

Looking Ahead

I’m glad PCI’s products landed with an organization that really understands the segment of the market that PCI served. One of the distinguishing characteristics of PCI’s culture was its sense of mission and service, and knowing that it will continue is important to all of us – customers, staff, and investors.

The team at PCI did some amazing work and changed hundreds of thousands of lives for the better. Everyone involved, employees, investors, customers, suppliers, distributors, and fans can take pride in the work we did to support teachers and help students learn. This is true for any educational materials publisher, but in PCI’s case was made all the more acute by the realization that the students we were serving had some of the greatest needs.

That work lives on at PRO-ED and we look forward to seeing what they do with it.

PRO-ED INC Logo

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* This post represents my opinions, it is not an official announcement from either company.

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Last Tuesday the Secretary of Education said

“I think we should be moving from print to digital absolutely as fast as we can over the next couple of years. Textbooks should be obsolete.”

He was clear that he sees the digital transformation in schools as a “critical game changer” for the American education system.

He gave three reasons for the advocating a rapid shift:

  • Providing 24/7 access to learning resources, expanding learning time
  • Improving equity of access to high quality resources for all students
  • Bolstering international competitiveness

The question and answer are at 34:05 into the video below:

In the context of the event this appeared to be a passing comment. But last February the DOE and the FCC announced an initiative to put digital textbooks in all schools within five years.

The initiative is based on the work of Project RED, sponsored by Intel, HP, SMART, Pearson, and Apple with most of the major education associations offering support.

With this kind of momentum behind it the outlines of a serious policy shift are emerging. Pay attention.

Four Questions for the DOE

As someone who has spent the better part of the last 25 years working on technology in education, the CEO of a company that provides a blend of software and print materials, the Board President of the Association of Education Publishers, and a parent who observed my son’s school adopting iPads last year I appreciate the Secretary’s focus on this issue.

Based on my experience and perspective I have four questions intended to get at the devil in the details.

They touch on:

  1. Funding
  2. Evidence
  3. Market Behavior
  4. Quality

1. Funding. Where is the legislation that will provide a minimum of $65 billion over the next 10 years to launch and sustain this effort? This is just at the High School level.

I did an analysis last spring that showed that iPad based textbooks cost at least five times what traditional materials cost. Without rehashing the full post the nub is that the devices and the network infrastructure investments are massive. To do this (at just the High School level) it would require a sustained investment of at least $6.5 billion incrementally per year for the foreseeable future. For all grade levels it would approach $15 billion in incremental spending per year. And yes – I factored in significant discounts for the volume involved.

Project RED came to similar conclusions about the near term incremental costs. Their estimate was $16.2 billion per year (p 91). They added long term benefits to society like dropout prevention to come up with a net savings. While useful from a macro standpoint of understanding the policy implications this larger view doesn’t solve the school budget problem. The benefits accrue to society in general in the future but leave schools holding the bag for funding it today.

Don’t be distracted by arguments that OER will solve this problem since the actual materials are not where the real differences lie. Just think about how adding 800 devices to a High School’s network explodes bandwidth requirements to get a sense of some of the other investments required to support this move.

We also start in a hole. The instructional materials market has been hit hard by the post-stimulus funding environment. Schools are spending roughly 40% less this year on materials than they did last year. This is currently projected to only improve marginally over the next 2 years, the Secretary’s timeframe for driving this transition.

The reality is that you need to add a couple billion more per year just to close that gap at the state and local level, so in the near term the number may be closer to $8-$9 billion per year. To put that in context, Title 1 is roughly $14.5 billion (before sequestration).

Given the funding crisis at the state and local level this initiative would need to be a major new Federal program in the same league as Title 1 and IDEA ($12-$15 billion annually) to cover all grades. It would be a major stimulus for local government and would provide a healthy shot in the arm to computer, networking, and content companies.

As stimulus it is close to perfect from both economic and political perspectives. It makes a long-term investment in American competitiveness while providing a meaningful jobs boost in the near-term. If anyone wants help crafting that proposal I’m standing by to help.

2. Evidence. Given the costs, where is the evidence that this investment will be worth it?

We are still on the near side of the technology chasm – with some essential basic questions about how to effectively deploy these kinds of devices at scale in schools. We also face a pretty massive training effort.

In Higher Education the students are resisting this transition. In some cases students are reverting to print after experiencing digital texts.

This reflects are larger truth that I see at play. Books actually do a few things better than technology. The trick is figuring out what the technology does particularly well, and then redesigning print and tech as an integrated system that uses the best of both worlds. Rich simulations, database driven content, and peer to peer coaching are all uniquely strong on technology. Random access, note taking, and battery life (infinite!) are better with print.

Would it be more prudent to move in a more organic way as we do the research to uncover best practices, or are we going to effectively throw the whole education system into the deep end and hope it can swim?

Project RED made a great start on this and did find improvements in outcomes (notably dropout prevention and engagement). But it is one study and their findings are colored by the appearance of self-interest (all the sponsors stand to benefit and the authors are long-time advocates of 1:1 initiatives).

I applaud them for making a serious effort to answer the questions swirling around this issue and know and respect the work of the team. The report is required reading for anyone who cares about this issue. But before we start dropping billions a year on this it would be reassuring to have independent third parties replicate the findings. The DOE is uniquely equipped to fund a crash research project on this.

My fear is that without a clear body of evidence we will face an inevitable backlash in the middle of the process that will derail it. As the saying goes “the middle of anything looks like failure.” We need strong research to power past that point in this transition and it would be best to take the time to do that research at scale. Again, the Department of Education is best equipped to muster the evidence needed.

3. Market behavior. Current purchasing patterns show that educators believe a blend of digital and print is best – will this be valued or dismissed?

It isn’t just Higher Ed students shying away from a full transition. Buying decisions being made today in K12 indicate that educators want a blend of print and digital, not a pure digital world. The tech partisans will tell you teachers are just dragging their feet, but I don’t think so. Teachers recognize that most students learn better with technology some of the time. It isn’t a cure all. They need a rich blend of resources to address the learning needs of all students all the time.

For example, the PCI Reading Program is a world class reading program for students with intellectual disabilities (Autism, Down’s Syndrome, etc). The vast majority of our customers purchase the print and the technology versions of the program together, even though each can stand on its own. General education publishers I’ve spoken with have seen the same thing, and in many cases have seen customers who went pure digital coming back after the fact and adding the print to the mix.

This should give pause to calls to completely abandon print materials. The real trick, as I noted above, is to figure out how both print and digital should be designed as a system to optimize learning outcomes.

4. Quality. Transitioning 54 million students to digital textbooks in two years is a moon shot – how do we maintain the quality of learning resources in the mad dash to get it done in that timeframe?

Everyone wants quality materials – teachers, parents, policy makers, the students themselves. That isn’t the issue. But the market left to its own will take several years to sort out what that means. Is the DOE going to be an active participant in accelerating this sorting out, or will they let it happen organically?

Standards will emerge, best practices will be refined, business models will evolve, licensing issues will be sorted out, etc etc etc. But if we don’t place a a very high priority on the quality of resources in the rush to just get it done we’ll end up with a crap-ton of junk content on really cool digital devices.

We have two very concrete examples to demonstrate this point.

First, digital whiteboards are now in roughly 50% of classrooms but the bulk of resources available are still at what I call the “Hypercard” stage – simple static animations. Schools have put hundreds of millions into deploying the technology and are now focusing on what to do with it. They will figure it out – I don’t doubt that for a second – but we are in the “middle” right now and quality is a real mixed bag.

Second, a short troll through the back alleys of the iTunes education store will make clear how real this danger is. Alongside some truly high quality stuff there are thousands of poorly executed “classroom” aps (e.g. no method to give teachers feedback on student progress, crash prone, bad UI, etc.).

Another angle on quality is the maturity of the tools to produce content. The fastest way to get quality content would be rapid conversion of good stuff that is in print today. It isn’t the end – because really the materials need to be re-imagined for a digital world. But it would be a fast start. Unfortunately the tools to do that are immature.

Take Apple’s iBooks Author program which is used to create digital textbooks. It doesn’t read InDesign files – the format for most existing content. Doing a conversion is a massive pain in the neck because you have to extract all the separate content (text, images, etc.) and then completely reformat it. You can’t just move your files over and tweak them. This is an eminently solvable problem – but publishers are currently balking because it isn’t ready for prime time yet.

If the funding issue was seriously addressed the investment decision would be clear and, good tools or no, you would see publishers moving ahead aggressively. The economic downturn has hit publishers hard and making massive new investments in the current climate is possible but difficult.

Summary

I applaud the Secretary for putting a bold stake in the ground – it is only with this kind of leadership that we will see a sustained effort at redefining what a world class education means in the era of 24/7/365 access to learning. All of us who have been chipping away at this problem, many since the late ’70s, are excited to have an advocate at the top calling for this transition.

But we have also learned a few things along the way. Heeding those lessons will lead to a better outcome. We could start by getting some clear answers to the questions outlined above.

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Peering into a cannonQuick – what percentage of your iTunes library is produced by amateurs? For that matter how many books on your eReader of choice are self-published works?

If you are like most people the answer to both questions is “slim to none.”

The point is that quality matters in any medium. Moving from analog to digital doesn’t reduce expectations of quality – in many cases it increases it.

Free music and self-published books, and teacher created lessons have always been a part of our media ecosystem. With the advent of digital distribution they can play a bigger role – but in the grand scheme they remain part of a much bigger marketplace.

There will always be a role for professionally produced content in education. The next time someone touts free OER as a panacea look to your own behavior with music and novels and ask why teachers should be any different with instructional materials.

Also, remember that you made an aesthetic choice – educators have their job on the line. Risk aversion rises with the stakes at play.

Carry on.

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here_doormatiPads in the classroom are all the rage in the education publishing market – somedays the oxygen for discussing anything but learning tablets has been sucked out of the room.

As we move beyond the giggling crush stage there are a couple of points to consider that might give publishers a more grounded perspective on where we really are in the adoption cycle.

Falling Off The Learning Cliff

Practical matters first. My son’s high school, Westlake, in a pioneering move gave every Junior and Senior an iPad this past school year.* As a parent, ardent iPad user, and publisher I was a bit stunned by the following end of year surprise.

• Exams were over on May 30th.

• iPads were due back on May 24th.

“Fortunately” my son did not use the iPad as his primary note taking tool, nor did he have digital textbooks that he needed for his finals on the iPad. It is hard to see students (or teachers) fully embracing the device once they grok this fundamental flaw in the system.

The school is in a tough spot here – as a practical matter you need to start corralling the gear before everyone disappears for the summer. But, if you want this to be the primary learning device then students need access to it right up to the bitter end.

Obviously a new process needs to be invented by some clever person (if your school has sorted this out please post a comment).

This is one of the best examples I’ve ever seen of the market slowing friction of unintended consequences. In the seminal work “Crossing the Chasm” this kind of problem is what separates early adopters from the broad market, it is the chasm.

Early adopters are willing to sacrifice their own time and reshape themselves to the technology. The broad market demands solutions that adapt to them. Sometimes this is a feature of the product, sometimes it is a complimentary process improvement, sometimes it is a cultural adaptation. But the chasm can’t be truly crossed until these problems are sorted out.

In other words getting from the early adopters to the broad market is hard work and takes time and focus.

iPads – The Early Adopters Have Adopted

So what is the market penetration so far? According to AAP Apple has succeeded in seeding the education market with 1.5 million iPads since its introduction. It isn’t clear if this is K12 and Higher Ed – but assuming this is just K12 this represents 2.5% of the addressable market of 55 million students and 3 million teachers in the US.

It is an impressive demonstration of market momentum, but isn’t the kind of game changer we’ve been promised – yet. I have absolutely no doubt that it will be, but until the early adopters sort out the kind of practical disconnects outlined above the broader market will hang back.

As publishers we need a credible strategy and story for incorporating tablets into instructional materials. We must participate in solving the practical problems that will smooth the way for broad scale adoption.

But from a market opportunity we’d be better served by putting relatively more time into helping schools sort out digital white board solutions (with over 40% penetration ). Just saying….