Friday, August 19, 2016

Is Google Positioned to become the Dominant Education Platform?

Interesting article from The Clayton Christensen Institute reflecting on the transition underway in Education from Apple and Microsoft to the open technologies provided by Google:
And yes, Google’s suite of office tools lacks the raw functionality of Microsoft Office’s suite, but Google has taken advantage of two key dynamics. First, most users are overserved by Microsoft Office. Most don’t take advantage of at least 98 percent of the functionality in Word, Excel, or PowerPoint, for example. Google’s office tools get the basic functionality right, enable new features like collaboration—which is custom made for the Web, and keep getting better with more and more functionality. Second, Google’s apps are free for educators, whereas Microsoft makes you pay. Faced with the decision, it’s become increasingly a no brainer for educators to opt for Google. If trends continue, a whole generation of children may never know what PowerPoint is.
What would be great to see is Microsoft move away from just focusing on the content creation marketplace of its traditional Office suite and instead leverage its acquisition of LinkedIn and to do three things: support competency-based learning—through badges, portfolios, and rich profiles for all students; invest in building students’ social capital—a key determinant of life success that education typically ignores—in a deliberate way; and, through both of these efforts, help students discover and cultivate their true passions.

Thursday, August 18, 2016

Wiley the publisher acquires Atypon the technology provider

If, like me, you are working in the software for publishers space then this acquisition by Wiley of Atypon is a big deal.   Consolidation in the space - which is dominated by Atypon and Highwire - has been on the cards for a number of years; however, I wouldn't necessarily consider this a consolidation of providers.  Wiley certainly will be making use of the Atypon technical expertise to build out their new Wiley content platform but I would also expect Atypon to continue to be a strong and aggressive competitor in the space.  Atypon and Wiley will also want to ensure they protect (and add to) the current Atypon client roster and are probably likely to build a 'chinese wall' between Atypon and Wiley.  They will do this to make sure the Atypon customers remain despite some degree of competition between Wiley and some of the Atypon customers.

Over the coming months it will be interesting to see how the other vendors in the market react to this news.

Here is the press release:

Wiley Signs Definitive Agreement to Acquire Atypon

John Wiley & Sons, Inc., a global provider of knowledge and knowledge-enabled services that improve outcomes in research, professional practice and education, announced today it has signed a definitive agreement to acquire Atypon, a Silicon Valley-based publishing-software company, for $120 million in cash. Atypon ( is a trusted technology partner that enables scholarly societies and publishers to deliver, host, enhance, market and manage their content on the web. The transaction is expected to close October 1, 2016.
Atypon is privately held and headquartered in Santa Clara, CA, with approximately 260 employees in the U.S. and EMEA. The company provides Literatum, an innovative platform that primarily serves the large scientific, technical, medical and scholarly industry. This sophisticated software gives publishers direct control over how their content is displayed, promoted and monetized on the web. The company generated over $31 million in calendar year 2015 revenue.
Atypon’s valued customers include some of the largest and most prestigious names in the industry. Literatum hosts nearly 9,000 journals, 13 million journal articles and more than 1,800 publication web sites for over 1,500 societies and publishers, accounting for a third of the world’s English-language scholarly journal articles.
Atypon will be managed as a separate business unit while benefiting from the financial stability and continuity of Wiley’s 209-year-old organization. The data and plans from each of Atypon’s clients will remain sequestered and behind firewalls. Clients use Atypon as their core journal-delivery platform or as a way to supplement end-user engagement. Wiley will itself become an Atypon customer.
“Wiley is committed to enabling the success of our customers and partners to advance research, discovery and learning,” said Mark Allin, President and CEO of Wiley. “Atypon offers an outstanding set of publishing solutions that can help industry participants like Wiley drive the discovery of research. We will ensure Atypon’s flexible platform continues to fully support the research community and industry partners so they may better serve their own customers.”
Georgios Papadopoulos, Atypon’s founder and CEO, will continue to lead the business and will report to Mr. Allin. He said: “We have worked hard with our partners to build the industry’s premier publishing platform and support the needs of the research community. Atypon is delivering solid growth and marked its most successful year in 2015, nearly doubling its staff in two years. With Wiley’s commitment we are very excited about the many opportunities to accelerate the expansion of Atypon’s service offerings strengthening the fabric of scholarly communications, expanding access, readership, and utilization, lowering operating costs, enabling organizations to create and expand offerings and products on their own, and building value for all stakeholders.”

Thursday, August 11, 2016

PND Flipboard Magazine New Issue: Am.Lawyer Magazine Reset, Apple's Long Term Strategy + More

CJR on American Lawyer Magazine's new strategy
E&P on digital strategies driving the media industry
AdAge on how Nike changed marketing
Fastcompany on Apple's long term strategy
+ More.

View my Flipboard Magazine.


Thursday, July 14, 2016

Barack Obama's Scholarly Journal Article on The Affordable Healthcare Act.

President Barack Obama (Barack Obama JD) has published an article in the Journal of the American Medical Association titled United States Healthcare Reform - Progress to Date and Next Steps.  Apparently a first for a sitting President.

Here's a summary from JAMA:
The Affordable Care Act has made significant progress toward solving long-standing challenges facing the US health care system related to access, affordability, and quality of care. Since the Affordable Care Act became law, the uninsured rate has declined by 43%, from 16.0% in 2010 to 9.1% in 2015, primarily because of the law’s reforms. Research has documented accompanying improvements in access to care (for example, an estimated reduction in the share of nonelderly adults unable to afford care of 5.5 percentage points), financial security (for example, an estimated reduction in debts sent to collection of $600-$1000 per person gaining Medicaid coverage), and health (for example, an estimated reduction in the share of nonelderly adults reporting fair or poor health of 3.4 percentage points). The law has also begun the process of transforming health care payment systems, with an estimated 30% of traditional Medicare payments now flowing through alternative payment models like bundled payments or accountable care organizations. These and related reforms have contributed to a sustained period of slow growth in per-enrollee health care spending and improvements in health care quality. Despite this progress, major opportunities to improve the health care system remain.

Tuesday, May 10, 2016

Travelin' man, that's what I was.

Travel has always been a constant in my professional life.  There have been gaps but for the most part I've had to travel for business constantly since I joined my first company after grad school back in 1989.   Growing up we were a Pan Am family because the company my father worked for was owned by Pan Am and, much of the time, we were able to fly first class on airline employee passes.  As a child I developed a distorted idea of how normal people traveled.  But, we had it good for a long time.

In the late 1970s - early 80s all the fun was soaked out of flying.  It became an angry experience.  People didn't dress up to fly any more.  No one wanted to take you to the airport to see the planes.  People get ugly and angry with frequency.   I admit to some of that myself on occasion.

Over the past three years, I traveled internationally far more than I expected.  Our business was challenged (to understate our circumstance) and this situation required me to be in the UK almost constantly.  When friends and colleagues ask me about this experience they have - on my behalf - tried to calculate miles and round trips and hours spent.  To be honest, while the travel was far more than expected it wasn't my place to complain but friends (and Mrs PND) with more objective points of view remain astonished that there wasn't an intervention of sorts to help reduce my travel.  There was no way this could continue at this level.

So I got to thinking what the numbers really looked like and here's what I came up with for my travel over the past 36 months:
  • 440,000 miles flown (415,000 on United).
  • 185,000 miles flown in 2014
  • 100 flights in/out of Heathrow
  • 150 flights in/out of Newark
  • Other cities: Beijing, Tokyo, Paris, Amsterdam, Frankfurt, San Francisco, Washington, New Orleans, Chicago. Edinburgh, Boston, New Delhi, Berlin, Manchester,
  • Typical travel week included more than 20 hrs in travel time
  • Approximately 75 books read
  • Complete seasons of Deadwood, Better Call Saul, Breaking Bad + assorted others
  • 840,000 airlines miles/points earned
  • (Only) 2 complimentary upgrades
  • Platinum United frequent flyer (and gold for life)
  • Approximately 90 round trips (75 out of Newark)
  • Approximately 25 mileage upgrades to business class (not enough!)
  • 1 cancelled flight
  • Approximately 65 multiple day rent-a-cars
  • Approximately 300 hotel nights
  • Approximately 100 nights with my parents (stress inducer but money saver)
  • 0 economy class meals eaten
  • 2,800 miles running (to stay in shape and reduce stress!)
  • 60+ train trips: Amtrak, UK, Europe
  • Conservatively, 2,000 photos
  • 1 missed hotel fire alarm
That was my job (and I wouldn't wish it on anyone).   In order to make sense and reduce stress and anxiety a set of routines are almost forced on the frequent traveler.  I knew the configuration of the different planes traveling between the US and UK so I'd look for specific seats to grab.  I'd try to execute a strategy so that I could maximize the chance of the seat next to me being left open.  Having a little more room to sleep on an over night flight becomes the most important goal in the days running up to departure.  But flights on Sunday (out) and Thursday (home) are rarely empty.  Sunday departures were always the worst since I'd begin packing around 3pm and leave for the airport around 4.  But, arriving Monday morning gave me the 'right' to return on home Thursday night.

Since I left PT (now "Ingenta") I've continued to travel but I don't see myself spending this amount of time on aircraft and at airports any time soon.

Next - What's in my bag?

Michael Cairns has served as CEO and President of several technology and content-centric business supporting global media publishers, retailers and service provider.  He can be reached at and is interested in discussing new business opportunities for executive management and/or board and advisory positions

Friday, May 06, 2016

Photo Image: Piccadilly Curcus 1968

Since so many people liked the 1954 version of Piccadilly Circus I thought I'd show one from 1968.  Here you can see that the center statue (Eros) is no longer an island in the middle and that there is a wider pedestrian space around the statue.  The road wasn't entirely blocked (note the railing on the right) until the early 1980s.  I am sure I have one from that period as well.  In 1954 the movie playing was The Bed (largely forgotten) and in this image the movie is "Beach Red" where "only man hunts his own kind".  Never heard of it.

Also, don't forget about my flipboard magazine where there are all kinds of interesting articles on media and publishing.

View my Flipboard Magazine.

Friday, April 15, 2016

Photo Image Piccadilly Circus 1954

© Michael Cairns
Piccadilly Circus 1954

Long time since I posted an image.  Something I used to do regularly.

Thursday, April 14, 2016

EdSurge Special Report on Adaptive Learning

EdSurge recently released their special report looking into the status of adaptive learning experiments, their effectiveness and what the future may hold for adaptive learning in schools.

Here's a sample:
"But like so many bright and shiny technology promises, adaptive learning has yet to offer any definitive answers, despite decades of work. Both industry and teachers are even wrestling with exactly what will constitute the “evidence” that so many educators crave. If there’s scant proof that these tools raise test scores, is it worth doing if it makes students more enthusiastic learners, or if it frees up teachers to spend more time teaching to smaller groups? These questions unnerve many, including parents who don’t want their children to get an inferior education as schools work out the kinks in new technology, and school district leaders, who are loath to champion risky projects that could get them in hot water with the school board or on the front page of the local paper."

The full report is located here.

Wednesday, March 30, 2016

Pew Center Study on Life Long Learning: Most of us like to Learn.

Pew Center study on life long learning concludes with some sobering stats related to some of the hottest topics in education:

Some key new digital platforms and methods of learning are not widely known by the public

The educational ecosystem is expanding dramatically. Still, there is not widespread public awareness of some of the key resources that are becoming available. Noteworthy majorities of Americans say they are “not too” or “not at all” aware of these things:
  • Distance learning – 61% of adults have little or no awareness of this concept.
  • The Khan Academy, which provides video lessons for students on key concepts in things such as math, science, the humanities and languages – 79% of adults do not have much awareness of it
  • Massive open online courses (MOOCs) that are now being offered by universities and companies – 80% of adults do not have much awareness of these.
  • Digital badges that can certify if someone has mastered an idea or a skill – 83% of adults do not have much awareness of these.

Thursday, March 24, 2016

Marketing wants to Market, Sales wants to Sell: Give them the Tools.

An historic lack of investment in the tools that allow your best customers to use your content may be frustrating those inside and outside your business.  It’s time to consider a strategic approach to identity and access management.

Over the past few years, many large software companies (including IBM, EMC, SAP and others) have invested in or acquired software which facilitates the relationship between a consumer and the owner of a digital item.  Typically, this ‘item’ is a content type such as an article, television show, movie or website.  But as more and more of our interactions occur on the web, the universe of ‘items’ available to us expands every day.  The category of software which facilitates these relationships is referred to as Identity and Access Management (IAM) and more and more, it is becoming an area of increased investment by both the providers of this type of software and the companies which provide the access rights.  Gartner defines Identity and Access Management (IAM) as “The security discipline that enables the right individuals to access the right resources at the right time for the right reasons”.

Most publishers with web content and web-delivered products will be familiar with the two main components of IAM: authentication and authorization.   Both have been critical in the distribution of electronic products into the library, academic and direct-to-consumer markets for our market for many years.   The software which manages these activities is frequently embedded in other applications – such as a content management or subscription system – or is derived from those systems.  Now, increasingly, we are seeing purpose-built IAM systems which sit between a database/repository of content and the user.  Companies like EMC, as well as new-to-the-market companies such as, are aggressively expanding this market as the ‘subscription’ and ‘membership’ model economy grows.  Publishers and content-centric companies – whether they know it or not – have represented many of the original business cases upon which these companies have based their investments.  The irony is that many publishers have under invested in their own IAM tools: As a result, they are likely to be leaving money on the table and suffering a comparative disadvantage versus others who are investing in the new tools and software.

Naturally, all content owners want to expand the usage of their content, be able to experiment with different business models and facilitate as many access modes as possible.  The consumer wants access to be universal across their devices (without disruption) and they increasingly expect some degree of personalization which provides them with additional relevant and timely content. 

Publishers are unable to deliver on these requirements due to their lack of investment in IAM solutions.  For example, they will provide access to journal articles for stated periods of time but don’t have the technical flexibility to work with collections of articles created by users and then price these collections dynamically.  Marketers and sales staff are left frustrated by lost sales - often to competitors - who are able to provide more creative and personalized options for their users. 

As publishers review their options and plan their technical architecture they will need to answer several new(ish) questions about the IAM software they are considering.  Licensing this software from the same content management (CMS) provider is likely to prove less and less optimal as companies like those noted above build out the functionality and capabilities of bespoke IAM solutions.  

Within the context of a strategic plan and a review of the company’s sales and market goals, you may consider the following important questions to answer and issues to discuss with vendors:
  • How flexibly can we define customer types?  Can this definition happen dynamically as a user exhibits certain behaviors?   How easy is the admin interface that allows marketing and sales personnel to define customer types?
  • Business models in the “old world” were very static; however, there may now be an almost unlimited number of business models to support a wide variety of customer types and access rules.  How well can this software manage a wide variety of models?  How are new models created and/or augmented and existing ones changed?  Importantly, is there an ‘archive’ capability so you can place any number of business models on hold and return to them in the future.  Is reporting easy – especially if you expect to adopt a multitude of models?
  • As our own personal experience shows, we access content and online resources via a variety of devices ranging from our television to our watch.  The experience is naturally very different from device to device and these differences need to be mitigated so as to not diminish and/or devalue the user experience.  The IAM should be able to intervene as needed to maintain the best and most consistent, uninterrupted experience for the user.
  • Lastly, IAM may be able help content owners expand the overall usage of their content.  To the extent that IAM enables some identification of the user this information can be used as a basis for delivering specific, personalized new content of which the user may be unaware.  Together with a strong analytics capability (a topic for next time), marketing can categorize users into like groups to deliver curated (and programmatic) content packages.  These type of activities are strategically important because they can support new revenue streams, renewal rates and price increases.  Tying an increase in utility to an annual price increase can be very effective in raising topline revenues.
  • A second aspect of identity management is to confirm that your chosen technology can monetize the ‘non-registered’ or ‘over the transom’ traffic which comes to your site on a daily basis.  If you have a site which generates a lot of daily non-subscriber traffic you’ve probably asked a lot about how you can turn that traffic into real revenue.  Asking specific questions about how this can be achieved via an IAM is important because, here, you may find a true ROI.
Increasingly, IAM will be viewed as a business-critical solution supported by the marketing and sales team, rather than a ‘black-box’ software package managed by the corporate IT department.   Decision makers on the front line selling content, subscriptions and memberships should begin demanding more from the IAM.  The solutions are out there.

Michael Cairns has served as CEO and President of several technology and content-centric business supporting global media publishers, retailers and service provider.  He can be reached at and is interested in discussing new business opportunities for executive management and/or board and advisory positions.

Tuesday, March 15, 2016

Volley -The student personal learning assistant picks up $2.3million

Interesting concept in Volley which uses your computer camera to analyze textbook content to provide additional resources, help and support to students.  The company just came out of stealth mode after gathering $2.3million in seed funding.

From Techcrunch:
"Once students take a photo of the work they’re struggling with, Volley analyzes the text and imagery in seconds to determine the precise topics at hand and lets the user choose the right one from a list. It can then point them to chunks of Khan Academy courses and Wikipedia articles, but also little-known reference PDFs uploaded by a teacher on the other side of the country that they’d never be able to find by Googling.
Orbuch says thanks to Volley’s “Concept Graph” it can also determine what prerequisites students would have to know first to figure something out. Kahn explains that “To understand photosynthesis, you need to understand glycolysis.” If a student missed a day of class or had trouble with a lecture because English isn’t their first language, Volley can fill in the knowledge gaps.

Sunday, March 13, 2016

End the Book Embargo Against Cuba

There are some great Cuban crime writers like Jose Latour, and Arnaldo Correa among many others. Let's return the favor by ending the book embargo with Cuba.   US publishers have united to ask Congress and The White House to end this restriction on culture and as you probably saw the WSJ and the NYT covered the story earlier this week.

Publishers Weekly has published the request on the cover of this weeks magazine to drive the point home.  Here is how they put it:
Our position:
  • We ask Congress and the president to lift the U.S. trade embargo against Cuba related to the production, distribution, and sale of books and educational materials.
  • The U.S. trade embargo is harmful to book culture and runs counter to American ideals of free expression.
  • Books are catalysts for greater cross-cultural understanding, economic development, free expression, and positive social change.
  • Cuba boasts a rich and proud literary tradition with much to contribute to book culture.
  • Cuba's adult literacy rate—nearly 100%—is among the highest in the world.
  • Exciting commercial opportunities exist for the American and Cuban publishing communities to collaborate for the benefit of readers and writers everywhere.
  • The American book publishing community stands ready to help Cuba's writers and publishers gain access to the global book market, and to help the Cuban people gain greater access to the amazing diversity of books published by American publishers.
Personnally, I've long believed the embargo of Cuba was anachronistic and pointless.  I'm gald the President has taken the steps he has to end it.  There are still significant challenges in Cuba to open representative government free of repression but ending these types of failed policies will only help to open up the country to more freedom.

From the petition site:
On the eve of his historic visit to Cuba March 21-22, we call on President Obama to utilize executive powers to immediately lift the economic embargo against Cuba as it pertains to books and educational materials.
  • As a basic human right, readers everywhere deserve greater access to books and literature.
  • Books promote cross-cultural understanding, economic development, free expression and positive social change.
  • The book embargo runs counter to American ideals of free expression.
  • Cuba's adult literacy rate – at nearly 100% - is among the highest in the world.
  • Cuba boasts a rich literary heritage.
  • End the embargo to make the works of American and Cuban writers more accessible to readers in each country.
  • 72% of Americans support an end to the trade embargo against Cuba (Pew, 2015)
Signing up is easy.

Thursday, March 10, 2016

EBSCO's Tim Collins on eBooks, Libraries and Search "has never been more important".

Interesting interview from Scholarly Kitchen with Tim Collins.  Here's a clip:
Many libraries are starting to see that, while they may spend less on ebooks for a couple of year by using STLs, they are often left with lower annual budgets (if they spend less in one year their budget declines the next) and a much less robust ebook collection to offer their users (as they don’t own as many books). While some libraries may feel like this is okay as they can enable their patrons to search ‘all’ ebooks via Demand Driven Acquisition (DDA) models without actually buying them, we worry about this logic as it assumes that publishers will continue to make all of their content available for searching via DDA at no cost to users. We don’t see this as a valid assumption as, if DDA results in reducing ebook budgets even further, we wonder whether publishers will be able to afford to make their ebooks available under this model.
We can see why book publishers worked with these models as they wanted to support their customers. But, if these models result in budget reductions, which result in publishers not being able to fulfill their mission of publishing the world’s research so that it can be consumed, we don’t see them being sustainable.   We understand that this view may not be welcomed or shared by all libraries, but we see the logic being sound. Business models need to work for both customers and vendors in order for them to be sustainable. There was much great discussion on this subject at the recent Charleston Conference and in related articles published in Against the Grain by both publishers and librarians.

Thursday, March 03, 2016

Cost of Publishing University Press Monographs

Ithaka S+R recently published a study conducted during 2015 of the costs of publishing monographs within the University Press environment.  Here is a link to the study (pdf)

In summary their findings are as follows:
  • Regardless of group type, the largest cost item for university presses is staff time, specifically the time related to activities of acquisitions, the area most closely tied to the character and reputation of the press. This activity is least likely to be outsourced, and considered to be closely tied to its financial success: acquisitions editors being the ones with the skill, subject expertise, and relationships needed to attract the most promising authors and topics to the press.
  • The working hypothesis at the outset of the study was that larger presses would demonstrate a lower per-book cost, presuming that larger houses are able to work more efficiently due to the economic benefits of scaling. Based on the data contributed by the individual presses, the small university presses in group 1 have been able to produce monographs at a lower cost than the other groups. It is impossible to determine if this signals greater efficiency on the part of the small presses or it simply means they underinvest in their publications.
  • We looked for significant determinants of cost. While press size, page count, and number of illustrations showed a relationship to cost, other factors, including whether or not the title was a “first book,” whether or not the press was at an institution that required it to pay rent, or whet
  • her the press was at a public versus private institution, did not. An examination of disciplines was not conclusive, due to small sample size.

Monday, February 29, 2016

Where are all the e-Textbook Users?

A whiff of great expectations and inevitability trails behind any discussion of digital textbooks like the scent of Grey Flannel from a middle-aged man. But it’s time to clear the air of both, and face the fact that the highly anticipated digital revolution just isn’t happening.  

I’ve been as guilty as anyone, speculating about the demise of print in the classroom. But a combination of institutional resistance, vested interest and simple disinterest have ultimately conspired to position digital textbooks on the slow train to never.  In fact, in a recent survey conducted by Campus Computing on behalf of the National Association of College Stores (NACS), “never” was the answer over 24% of respondents gave when asked when content in the classroom will be primarily digital.  [Correction: The survey was sponsored by the Independent College Stores Association, not NACS - sorry]

Surveying faculty and students on the adoption of and/or readiness for academic digital content has become a competitive sport, resulting in regular reports presented by associations, trade groups and retailers.   You don’t need to look at many of these to spot the themes consistent to all:  Students prefer print, textbook cost is an issue and faculty isn’t inclined to experiment.

In spring 2015, NACS announced the findings from their Student Watch™ survey and admitted that digital course materials were growing steadily, but only at a rate of approximately 3% per year.  Hardly fuel for a revolution.  They went on to make the following statement regarding the future of educational content in the classroom:
But one thing is certain: Every institution will need to consider a multidimensional and boundary-spanning learning content strategy if the transition to digital learning content and courseware is to proceed smoothly. Failure to do so likely will fragment the student experience as decisions to adopt learning content vary from course to course and as untested courseware and digital academic services are adopted and discarded. Unmanaged, the gap between courseware’s capabilities and the faculty's use of them will frustrate students and lead to substantial underutilization of the institution’s investments.
My response to that is . . . why?  If the growth of digital is slow and its value to students and teachers questionable, why does NACS believe that doing the above has become such an imperative?

Is it a justification for the big investments made by the largest educational publishers, who have bought companies and built content creation and delivery platforms to facilitate digital delivery?   Perhaps these investments, which looked so strategic and important to the industry (myself included), were premature or even misguided.  Recent financial results for some of the largest educational publishers have been soft and maybe the slow take-up in digital, coupled with heavy up-front investment, is partly to blame.  The most important question to ask now may be “Is there a digital future for educational content at all?

There are certainly many boosters who would answer “yes”.  Several years ago, Education Secretary Arne Duncan announced that the US educational market needed to move, as quickly as possible, away from print to digital, primarily to compete with other countries already making serious advances in this area. 

“Over the next few years, textbooks should be obsolete," he declared, going on to say that students in other countries are leaving their American counterparts in the dust because of those countries’ more enlightened education policy.   Duncan noted that South Korea “has set a goal to go fully digital with its textbooks by 2015.”   But, in 2016, our government appears to have done little to support the expansion and development of the infrastructure required to support digital content delivery in colleges--particularly community colleges, across the US.   

While the number of community college faculty surveyed by the recent NACS study was small relative to that of four-year institutions, the concerns over accessibility were clear.  Most students attending community colleges can’t afford digital devices and their lifestyles – balancing academic, work and home life – make using anything other than a print textbook difficult.   These problems are pretty basic but they don’t have easy solutions – and may not until the tablet is as affordable and ubiquitous as the Slimline phone.

To my mind, there are other challenges which may be even more intractable, and these concern institutional resistance and vested interests.   Publishers, colleges and faculty, retailers and others are dis-incentivized to move away from print content to digital.  I’m not at all saying they operate unethically or outside the best interests of their constituents; however, the current print-based world does afford important benefits to many of those who participate in the business model. Consequently, the desire to press for change might be somewhat muted.

The survey conducted by Campus Computing sampled approximately 3,000 faculty members at 29 two- and four-year colleges and summarized the findings:
  • The majority of faculty agreed that digital materials generally cost less money.
  • Less than half believed that digital content added value to their courses.
  • 55 percent said that students prefer print textbooks to digital.
  • 39 percent reported they had never heard of open educational resources (OER).

While the majority of faculty members professed concern over high textbook prices, there were some inconsistencies in the responses that may not entirely bear that out.  For example, faculty members believe themselves to be the final arbiters of textbook selection and, certainly, the price of the textbook is a known variable they can take into account during the selection process.  Even more telling is the finding that very few faculty members know about, are aware of, or would select open-source content for their course material.  If selected, this courseware would be free to the student!   As summarized in Campus Computing:
Two-fifths (39 percent) of the survey participants indicated that they had never heard of OER, while just over a third (36 percent) indicated that they knew a little about OER but had not used or reviewed OER materials. A tenth (10 percent) had reviewed but decided not to use OER materials for their classes, while another tenth (11 percent) were using OER materials and 4 percent were currently using OER in their classes and also making their own course materials available as OER.
The results were similar with respect to digital content: While respondents believe it to be cheaper than traditional print textbook content, a disappointing proportion of faculty are willing to select digital content for their students.  Despite their apparent unwillingness to experiment with the selection of digital course materials, the faculty surveyed are more than willing to judge the quality of digital course materials as inferior to traditional textbooks.  It’s hard to understand how the ‘quality’ of digital content can be questioned when it’s seldom selected!

These and other contradictions may be a result of the survey methodology itself (i.e., how the questions were asked), but what is patently clear is that digital transformation of content in higher education is going to be progressive, not revolutionary as predicted.  This doesn’t make sense when you consider all of the great advantages perceived in providing digital content to students.  But obstacles remain and may be difficult to overcome--especially since they are, in a sense, “protected” by incumbent publishers, administrators and suppliers.  In the meantime, Arne Duncan’s fear that the US is losing the education race to countries at the digital vanguard becomes more and more real.

Friday, February 26, 2016

Pearson Annual Results: Revenue and profit off 2%. Profit growth expected '17, '18

From their press release:

Pearson, the world's learning company, is announcing its preliminary full year results for 2015 which builds on its 21 January trading statement.  Key headlines include:

·   2015 results in line with guidance:
o  Sales of £4,468m declined 2% in underlying terms. Good growth in Pearson VUE, Connections Education and Wall Street English in China was more than offset by declines in US Higher Education, UK Qualifications and South Africa.
o   Deferred revenues grew 8% in underlying terms.
o   Adjusted operating profit of £723m was down 2% in underlying terms due to revenue mix and an operating loss in our Growth segment partly offset by Penguin Random House.
o   Adjusted earnings per share grew 5% to 70.3p reflecting lower interest and a lower tax rate of 15.5%, due to the agreement of historical tax positions and the associated release of accrued interest on tax provisions.
o   Operating cash flow decreased 33% as a result of challenging trading, disposals and increased US higher education textbook returns partly offset by an increased dividend payment from Penguin Random House.

·   2015 statutory results: Statutory profit for the year of £823m was affected by two significant items: pre-tax gains on the disposal of the Financial Times, The Economist Group and PowerSchool of £1,214m; and an impairment of goodwill and intangibles of £849m, primarily reflecting challenging market conditions in our Growth and North American businesses.

·   Simplification and growth: As announced in January, we are taking further action to simplify our business, reduce our costs and position ourselves for growth in our major markets. We will complete the majority of these actions by mid-year and incur implementation costs of approximately £320m in 2016 and expect to generate annualised savings of approximately £350m, with approximately £250m of these savings in 2016 and a further £100m of these savings in 2017. We have already implemented a number of associated actions since the announcement of the programme in January. 

·   2018 goals: With the full benefits of our restructuring programme, the launch of new products, and stability returning to US college enrolments and the UK qualifications market by the end of 2017, we expect adjusted operating profit to be at or above £800m in 2018.

·   Sustaining the dividend: We are proposing a final dividend of 34p, level with last year, resulting in a 2% increase in the overall 2015 dividend to 52p.  Pearson plans to hold its dividend at this 2015 level while it rebuilds cover, reflecting the Board's confidence in the medium term outlook. 

·   2016 outlook: In 2016, we expect to report adjusted operating profit and adjusted earnings per share before the costs of restructuring of between £580m and £620m and between 50p and 55p, respectively, with the in-year benefits from restructuring offset by the loss of operating profit from disposals made in 2015, ongoing challenging conditions in our largest markets, the reinstatement of the employee incentive pool and other operational factors. We are excluding the one-off cost of this major restructuring to better reflect the underlying earnings potential of the business. Operating profit after restructuring charges is expected to be in the £260m to £300m range.

·   Strategy: We have world-class capabilities in educational courseware and assessment, based on a strong portfolio of products and services, powered by learning technology. Our strategy of combining these core capabilities with related services that enable our partners to scale online, reaching more people and ensuring better learning outcomes, will provide Pearson with a larger market opportunity, a sharper focus on the fastest-growing education markets and stronger financial returns.

Monday, February 15, 2016

Predictions for 2016: Education, China, Platforms and Blockchain. As I see it.

For many years now I’ve been putting my thoughts about the future of the media and publishing in writing.  Here are my thoughts on the coming year.

2016 Predictions:

Education publishing may well see a lot of turmoil during 2016.   At Houghton Mifflin, CEO Linda Zecher has continued to make changes to her organizational and executive team, while at Cengage Michael Hansen‘s team is now well bedded in.  In both cases, the companies are focused in investing in digital products and distribution, which they couldn’t do doing while their businesses were under considerable financial constraints prior to refinancing.   Where change will really be evident is at Pearson, Wiley, Scholastic and Macmillan.   Given the share slides of both Wiley and Pearson, I expect some restructuring is inevitable at both companies.   Pearson has already announced significant headcount reductions and has sold off most of its ‘non-core’ operations.  Pearson’s share price is at a ten-year low and any long-term shareholder must be wondering what happened to the ROI from the asset sales and education company purchases made during the past 10 years.   At the current price, the company must be a target for private equity.  Perhaps even Bertelsmann will take a close look at the company in collaboration with a PE company.

Similarly, at Wiley there is an argument that their educational division is not big enough to be a “real” player against the bigger companies.   That may have been fine when the business as a whole was running well; however, the business is fighting a general market slow-down and internal operational issues, all of which are reflected in their operational results.   Look for some announcement in 2016 that Wiley is looking at ‘strategic options’ for parts of its business.   It is also possible that Scholastic may consider similar options for its education business and perhaps Macmillan could look to pick up more assets to grow the scale of their education textbook business.

The expansion of China.  In years past I’ve predicted that a Chinese publisher would make a significant purchase in the US/Europe of an academic/professional publisher, but that has yet to happen.  Still, there have been small, modest investments by Chinese publishers over the past few years and the Chinese publishing industry has begun to expose itself internationally at BookExpo, LBF, etc.  I think this shows increasing confidence (which may have been lacking five years ago) and that makes expansion into western markets a probability.  In addition, there is a recognition that the domestic Chinese publishing market is significant, both in size and reputation, and this presents international expansion opportunities for Chinese publishers which were not appreciated five years ago.  This developing strength will also help propel Chinese publishers towards global expansion.

And, just this week, a Chinese consortium announced it was bidding for Opera, a web browser design company based in Norway.  While this deal is not directly in our market, it is indicative of the intention of Chinese investors to expand into the media market in a big way.  (Opera actually has a larger role in content distribution than may be obviously apparent).

Platforms purposely open will become a strategic imperative for all CTOs looking for new content management options in the coming years.  The launch of Facebook, Apple News and other large distribution networks will actually convince more content owners that their content repositories and distribution networks need to be built with open-source, non-proprietary tools, and retain open APIs so that linking and third-party application development can be encouraged and fostered.   While the entry of the larger players is important, it will not diminish the need for individual publishers (and/or aggregators) to maintain their own market presence.  What becomes more important is that the platforms on which these are built are true platforms which can be upgraded frequently, without disruption or added cost by the developer.  In addition, development and third-party app “tiers” sit on top of this base platform to enable extensions and ‘bespoke’ applications.  These latter elements can be built by the software provider, the client publisher or third-party developers.  The third-party development capability will become a marketplace for applications similar to the manner in which has established their developer community.   These product criteria will become critical entry points for any technology provider presenting their solution to education, academic and scholarly publishers from this point forward (if it isn’t already).

The growth of corporate communication platforms is another prediction I’ve made in years past.  It hasn’t yet become prevalent; however, I believe virtually all corporations and businesses are becoming publishers to some degree.   Accelerating this is the availability of the tools needed as well as the business imperative for companies to manage their own internal and external content in more effective ways.   I recently met an ex-colleague who has developed a content tool that enables a company to host its HR and policies and procedures manuals in a central service.  This content platform offers edit features so, not only is the content updated daily, but employees are empowered to offer input to improve procedures and safety practices, which can then be immediately rolled out to other offices.  A global retailer is now testing this tool across its business.   Similarly, communication with external constituencies can be improved significantly for many businesses by adopting many of the same practices which publishers have employed with their subscribers, like content platforms and access and control features.

Growth of licensing revenues:  CCC has been on an accelerated expansion of overseas activities which underscores the opportunities for publishers outside the US marketplace.   Most publishers are still focused on the form of their content but, increasingly form will be less and less important (the aforementioned Facebook and AppleNews sites are instructive on this point).  This will mean publishers providing flexible content and making it available to as many sources as possible will increasingly drive their revenues.   Licensing fees are becoming a very important source of revenue for publishers and if your revenues in this area haven’t increased more than 20% over the past three years you may want to re-think your policies.   Undoubtedly, licensed content will become one of a publisher’s main sources of revenue in the coming years.  This will have implications across businesses, especially for systems and accounting processes.

Application of Blockchain: And, speaking of copyright, expect to see the application of Blockchain to intellectual property rights.  As you know, Blockchain is the underlying foundation for BitCoin and, as such, its application to the protection and distribution of intellectual property will be another very interesting use.   Each step in a Blockchain transaction is protected by a tamper-proof encryption technology which supports BitCoin as a legitimate financial transaction service.   The use of Blockchain is being considered in several other applications, and media is one of them.

Blockchain can be used to facilitate the transfer of intellectual property from one owner to another.  Bitcoins are ‘tokens’ that represent money and are exchanged on the Blockchain network.  But there is no reason why a ‘token’ couldn’t represent some other specific item of value, such as a book or an article or a business case.  Once a transaction occurs, the user is supplied with a unique key for accessing the content.  If the user subsequently wants to sell or lend the item, they pass their unique key to the next person for their use.  This process eliminates the ‘residual’ copy issue which arises when someone tries to sell a second-hand e-file.

Ultimately, a network of “bitRights” ™ could represent a universal content repository or bazaar/market where rights and content could be exchanged or bought, traded and sold.  In addition, this aggregation would also generate significant user data and analytics to inform future pricing, content/topic areas, distribution models and a host of other benefits which currently get lost in the very inefficient rights and copyright clearance process we have today.   Recently, Ascribe received $2mm in seed capital to establish a Blockchain product for artwork.

Open Access for federal funded research will clear Congress in 2016.   In recent years, the Fair Access to Science & Technology Research Act (FASTR) bill has failed to pass Congress due to opposition from publishers and others.  FASTR will require any federal agency which provides more than $100million in grants (which, let’s face it, is a huge hurdle) to adopt an open-access policy.   Coupled with this will be more excitement and activity around the Obama Administration’s open data initiative.  Either way, there will be much more to happening in 2016 with open access to government information.   App developers and non-profit foundations are working together to drive better access to this type of information, and I recently saw a demo from CivicHall, which is doing just that for several cities already.

As always, I expect the coming year will be another exciting year with, I hope, the above trends occurring but almost certainly many other new and interesting things as well.

Michael Cairns has served as CEO and President of several technology and content-centric business supporting global media publishers, retailers and service provider.  He can be reached at and is interested in discussing new business opportunities for executive management and/or board and advisory positions.