Captive markets, particularly in the tertiary sector, mean that education publishers tend to be bigger than other media companies, even if the latter seems sexier and attracts more attention. For example, Pearson is far bigger than AOL or The New York Times, it is also much more profitable.
Digital products and services are increasingly becoming a core part of how education publishers do business. They build end-to-end solutions, which extend from textbooks to online testing, learning delivery platforms and apps. Education publishing as a business might lack the mainstream interest of other media, but the future of the classroom concerns many of us as students, parents, taxpayers, policymakers and teachers.
The profile of digital textbooks is undoubtedly rising. Business models differ from market to market, and between levels of schooling; but the advancement of classroom technology is prevalent in all cases. Considering that digital textbooks could have a disruptive influence on existing distribution methods, for example, potentially by textbook companies selling directly to the student, the question arises: “How will textbooks be marketed in the future? What impact will this have?”
For the unfamiliar: Publisher sales cycles often start with the sales rep. A friendly figure who develops a relationship at school level, and uses that connection to consult and advise on which educational products to purchase. More often than not, the product knowledge of the rep benefits schools and the consultative selling approach enables the publisher to not only sell new ideas in, but also to get feedback and judgements ahead of publishing new titles. Educational publishing is therefore, as it exists now, a very relationship-driven business.
It is questionable whether this model will survive. Costs can include flights, food, entertaining and time between appointments. Schools appreciate the relationship, and publishers have benefited to-date. But will it still be cost effective as digital communications improve? This is a question that remains to be answered.
Another relationship to consider is that of distributors. Schools globally purchase their titles, in one go, from one place. It makes sense for everyone involved in the distribution chain. Publishers, rather than needing to send out copies of textbooks to individual schools, have a place to store their books. Distributors deal with packing, picking, orders, returns, announcing delays on new titles, all in return for a 30-50% cut of the sale of each textbook. Publishers often don’t have the storage space or infrastructure to fulfill this function, allowing the distributor to step in and fill the gaps. The distributor can also give impartial (or not so impartial if their terms differ significantly between publisher) advice to schools on which textbooks to adopt for any given term/school year.
Apple (or Google, or any other classroom technology provider) will indirectly impact on these relationships, as they develop their own education products. The entire Apple infrastructure forces all purchases through their own app stores, where Apple take their 30% share. With Apple wanting such margins, and distributors expecting 30-50%, there is little scope for any profit for content creators if both parties are part of the sales funnel. So who will win? Will publishers develop digital products for their distribution channel to sell, maintaining those solid relationships with schools? Or will Apple’s slick technology and presence in schools globally override the selling process?
(incidentally, YUDU apps can be sold via distributors or directly, and downloaded from various app stores)
With the rise of MOOCs and shifts to online learning, the marketplace for marketing these courses is growing. Rosetta Stone announced last April that it would only focus on digital solutions, and closed 56 of its remaining kiosk locations in the U.S as it transitioned to cloud-based learning solutions. Steve Sward, CEO, announced: “learners expect us to come to them via the cloud, and that’s what we’re doing. By meeting customers where they are, we are pursuing our vision of a world where anyone—anywhere, anytime—can learn using Rosetta Stone.”
Naturally the situation is different in classrooms where learners aren’t picking their own course content per se. However there are parts of the learning process that can be done just as well as online self-study, leaving valuable classroom time for teacher-led activities. This shift to online study is an area which requires companies to market slightly differently. Students might be offered to make their own choices around course content, and will be receptive to different marketing messages than their school’s resources co-ordinators. This is being tackled today, by publishers and educational technology companies, using an array of digital marketing strategies. As of yet however, the “winning ticket” is yet to be found.
What is certain from this analysis is that technology has fundamentally changed the routes to market for all stakeholders in educational publishing. A range of other companies are competing in this space online, those which would not have stood a chance of disrupting the sales rep-to-school, or distributor-to-college relationship. The opening up of the market, in spite of some press concern about pricing, can only be a good thing for students and passionate educators in the long run. Especially, if the result is enhanced teaching and learning for all.
The challenge is, ultimately, for publishers and distributors to maintain their market share and for the giants of the technology world to keep the learner at the centre of development. If the outcome is a more educated and informed generation of digital natives, then we are moving in the right direction.