EdTech for Publishers
Luckily, the decision on which path to follow came right after the first round of keynotes held by James Whatley (Oglivy & Mather), Anki Ahrnell (Bonnier AB), Tim Hutchinson (Hachette) and Eva Appelbaum (Digital Talent@Work). They set the ball rolling by giving insights on video-first (among others), technology (a lot!), media types (all of them) and, of course, people. Once tuned in, it was even harder to decide which of the three simultaneous conferences to follow. Should it be the Future Book Conference, the Audio Book Revolution or EdTech for Publishers? Cherry picking isn’t easy when there is nothing but a basket of delicious cherries.
I went for the EdTech for Publishers string, not only because it is one of the most demanding markets for publishers but also one that faces obstacles with ICT budgets under pressure at schools and universities, and big opportunities when it comes to private and corporate learning. The British Educational Supplier Association reports that hardware and network technology budgets are declining significantly (about -15%), and software and support budgets will increase by about 10%. Good news for publishers one might think, but keep the poor state of Wi-Fi connectivity in mind, which has already spoiled the success of IWB based learning (and earnings).
On the other hand, the eLearning market is soaring with 10% growth on average every year. Markets in India, China and such are growing by much higher figures (up to 55%). Self-paced eLearning hit nearly $50 billion in 2015 and will be doubling within 7 years. Tom Hall, VP at Pearson, estimates the global EdTech market to be €150 to €250 billion within the next three years. The future looks bright, doesn’t it?
No, it doesn’t. First, there is quite a lot of home work to do. For example, defining your target groups very precisely is essential yet quite cumbersome because you are not only targeting B2C and B2B alike but almost every potential customer on an individual level. Kate Worlock, VP and Lead Analyst at Outsell points out that consequent new investment into your data systems is inevitable. And this is not only true for CRM systems but for rights, royalty and content management systems as well. Especially in education, Steve Connolly of Hodder Education said during his talk that content needs to be divided into ever smaller chunks to meet the need for self-paced learning. This affects rights & royalty management as well (not to mention the growing number of formats and channel types). Another obstacle is metadata, which is increasing exponentially not only in amount but in number. It is getting more and more important for analytical reasons as well as a base for further business models.
Tom Hall pointed in the same direction: original content is not necessarily mobile-ready and has to be converted. These days, content management systems typically don’t do that automatically. Quite a lot of it has to be done manually. Customer experiences have to be evaluated and managed, which affects CRM systems in particular, if you want to get a target group, such as teachers, involved in your product development. Last but not least, your systems have to support subscription-based payment models as well as flat fees, single sales, free, freemium and all possible combinations, too. And then there are the sales channels … .
Justin Smith, Founder of EdTech exchange, agrees with Tom Hall that app stores aren’t profitable sales channels. Customers expect apps there to be for free and most of them are. Unless publishers are able to create services and up-selling possibilities around these free apps, that is. As a result, Collin Education uses partner platforms and partnerships, e.g. with Microsoft, to sell and up-sell as well as white labelling to increase profits. The downside of those partnerships is that the partners dictate the pace. That is not necessarily bad, because it could mean that the partner pushes you to better performance, but is to be kept in mind.
Aside from expanding your software systems, expanding your product range, dividing your content into even smaller fractions and looking for new partners, products and sale channels, there is one crucial thing left according to Steve Connolly: Examination, Evaluation and Analysis. O.K., it’s three, but you get the point. All the data-gathering taking place is no end in itself. This data is the foundation for decision making. Therefore it is imperative to know which data to collect, how to connect data and to analyse it quickly. Markets are changing fast and competitors spring up even faster.
The good news is that most publishers already have a lot of reliable data-sets especially when it comes to customers, metadata and financials. The bad news is, that it is are scattered all over the place, often handled solely as a by-product of operations, and it takes ages to aggregate them in a meaningful way. And now the next big wave of additional information is coming, according to James Gray, CEO of Kortex. Even without Internet of Things, the amount of data piles up even faster. User’s behaviour has to be plotted when they interact with the content to improve usability, and the same is true for their buying behaviour. On a larger scale, learning success has to be plotted and analysed too, to maximize the educational impact your products have (and then boast about the results for marketing purposes) and of course, you’ll want to know how your user communities communicate amongst themselves about you and your product. Are you ready for this?
If so, a large piece of the $150 billion market will be yours. The future looks bright, indeed.
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