MediaWeek (Vol 5, No 45): Flatworld Knowledge, McGraw Education, Conde Nast + More

Things were so bad last week, I actually read a paper newspaper, maybe things can get back to normal this week.

Hoboken from the storm (WaPo)

Education textbook trailblazer Flatworld Knowledge is changing their business model to paid rather than free content (IHE):

As usage of Flat World’s materials increased (the company’s latest promotional materials assert that the texts are being used in more than 4,000 classrooms at 2,000 institutions), the company became a darling of supporters of open educational resources and critics of high textbook prices. A 2010 report commissioned by the Student PIRGs, for instance, heralded open textbooks as “the path to textbook affordability.”

But that’s only true if the providers of open textbooks can make their materials available sustainably, and the shift in gears by Flat World Knowledge suggests that, for one company at least, providing free and open textbooks is not a viable business plan. While company officials hoped that they’d be able to persuade many of the consumers of the basic, free versions of its textbooks to pay for printed copies or versions enhanced with study aids and other add-ons, “we don’t convert [from free to paid] as much as we used to,” said Shelstad, the Flat World co-founder.

Economic viability is not the only reason Flat World is dumping the free model, Shelstad said. So is fairness. Some of the company’s 15 current institutional partners pay a $20-$25 licensing fee for every student whose use of the materials they subsidize, and others pay less. Raising the minimum price for use of the materials to $19.95 (the company’s tab for its Study Pass product, which includes the full online textbook, note-taking, highlighting and study aids) is fairer and still affordable for students, Shelstad said.

McGraw Hill sees lower results in advance of their Education sell-off (FT):

Several analysts had expected a decision in mid-to-late October over the future of McGraw-Hill Education, which competes in the school and higher education market with Pearson, owner of the Financial Times.

Terry McGraw, chairman and chief executive, told analysts that he would have news on the plans for the education division “in the coming weeks and hopefully sooner”.

“Critical to this decision is ensuring that we choose the option that maximises shareholder value,” he said.

Operating profit at McGraw-Hill Education fell 20 per cent, or 15 per cent when costs of the group’s restructuring programme are excluded. Most of the decline stemmed from weak US state and local spending on schools.

Revenues in McGraw’s school education group fell 16 per cent, while professional, higher education and international revenues slipped 6 per cent. About a third of the fall was because of revenues being deferred as the business moves from publishing textbooks to selling more digital subscriptions.

Also from the FT a look at Bertelsmann's Thomas Rabe (FT):

Mr Rabe thinks he is. Although low key – he wears sober dark suits and drives a Mini – he has a self-assurance that has driven some colleagues to distraction. One reason his predecessor Hartmut Ostrowski quit as chief executive late last year, according to people familiar with events, was that he “was tired of having someone by his side who always signalled he could do things better”.

How does Conde Nast see their future? (Folio):

“The post recessionary moment is really the introduction of alternative platforms that takes the pressure off of the print business, but doesn’t replace the print business,” he said. “Our print business continues to grow post-recession, but this year is a miserable year. Not because of Condé Nast or any other media company, but because of the anemic U.S. economy—nobody can escape the problems the U.S. economy imposes on us.”

Townsend said Condé Nast’s Web business has grown at half the rate expected so far this year, by about 15 percent topline growth, and print has also been trending upward despite the current fiscal climate.

“Even in this worst moment that any of us can remember with the U.S. economy, the print business continues to grow and the margins are sharper—the growth profit margins are mouth watering,” he said. However, he added, with “net margins, we try to run at 10 percent [but] we’re going to fall short of that on the print side, but we are still an expanding business. When this economy recovers, and it must for all of us, the print business is going to be on fire.”

The print business model will now be complimented by a variety of assets, said Townsend, including, digital and mobile, among others. In November, the company will also announce that it is increasing rate-bases for several of its titles due to growing digital tablet circulation, which Townsend estimated to be around 1 million, or close to 10 percent of total circulation.

A long look at how Paul Reid undertook to finish William Manchester's biography of Churchill (Times):

In 1996, The Palm Beach Post assigned Paul Reid to cover the reunion of a group of veteran Marines from World War II that included William Manchester. Although Manchester was too ill to attend, Reid got along so well with the other Marines that in 1998 they invited him to join them on a trip to Manchester’s home in Middletown. Reid and Manchester bonded over their mutual love of military history and eventually became such close friends that Manchester revealed to Reid the trouble he was having finishing his Churchill biography.

Reid regularly traveled from Florida to visit Manchester in his home, always trying to raise his new friend’s sagging spirits. During one visit, on Oct. 9, 2003, the two men sat in Manchester’s bedroom drinking — whiskey in Manchester’s case, red wine in Reid’s — snacking on popcorn and watching the Boston Red Sox try to upset the New York Yankees for the American League pennant. Reid says he noticed Elmore Leonard’s novel “Maximum Bob” on the bed. After the game, Manchester asked Reid to retrieve a large suitcase from his study. It was a big room, more than 16 feet long, with an oversize desk taking up most of one wall; Yousuf Karsh’s famous photograph of Churchill and a picture of Jacqueline and John F. Kennedy autographed for Manchester by the first lady were on display. What Reid noticed most of all, though, were the empty wastebaskets, the still-sharp, unused pencils, the uncluttered desktop. The room was more like a museum exhibit than a working office.

In Reid’s telling, he brought the suitcase to Manchester, who had another whiskey and told him to have a seat. “I’d like you to finish the book,” he said. At first, Reid thought Manchester meant he wanted him to read aloud from “Maximum Bob,” much as Manchester himself had read “Huckleberry Finn” to an ailing, elderly Mencken years before.

UAE is providing all students with iPads (NYTimes);

The plan to offer iPads across the U.A.E.’s three main higher education institutions has been in the works for one year by government decree. With the support of the government, a team of specialists visited Apple’s headquarters in Cupertino, California, in April to form a partnership and agree on training services for teachers and students.

Apple then completed a feasibility study to determine that the campuses had the proper infrastructure for the project. They shipped 14,000 iPads to the country and asked faculty members for their opinions on which 20 free applications should be downloaded for student use.

Teachers were “panicky” before they realized how easy it would be to use the device, said Andrew Blackmore, curriculum supervisor at Zayed University. He added that educators were now working directly with Apple to develop their own apps and create their own reading material as e-books on iBooks Author. By reducing paper use and waste, the iPads also promote environmentally friendly values in a region where fast cars and massive shopping malls rely on low-cost energy without thinking twice.

Photos from the storm (Atlantic)