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Predictions for Educational Publishing: NFAIS Conference 2013

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Presentation to National Federation of Advanced Information Services annual conference (members meeting). Feb 25, 2013.

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Predictions for Educational Publishing: NFAIS Conference 2013

  1. 1. Michael Cairns Managing Partner Information Media Partners The End of the Middleman Predicting the future of education publishing NFAIS Annual Conference 2013
  2. 2. 2 Introduction Michael Cairns is a publishing and media executive with over 25 years experience in business strategy, operations and technology implementation. As a business executive, Mr. Cairns has successfully managed several troubled and under- performing businesses, creating new business opportunities, developing new funding sources and enhancing shareholder value for investors. His years spent as an operating executive have largely been with brand-name publishing companies such as Macmillan, Inc., Berlitz International, Wolters Kluwer Health, Reed Elsevier and R.R. Bowker. As a consultant, Mr. Cairns has worked with clients as diverse as AARP, Hewlett Packard, InterPublic Companies and Reed Elsevier with an emphasis on business strategy, market development and corporate development. His skills and experience include:  Business and corporate strategy development and implementation  Operations management and business transformation  Traditional and digital publishing and operations  Print-to-digital transformation and adoption of new business models  Software development and software services Mr. Cairns holds an MBA (Finance) from Georgetown University and a BA from Boston University. He has served on several boards and advisory groups including the Association of American Publishers, Book Industry Study Group and the International ISBN organization. Additionally, he has public and private company board experience. 2 Michael Cairns Information Media Partners Strategy Consulting New York, London, Melbourne Tel: 908 938 4889 Michael.cairns@infomediapartners.com Find me: LinkedIn Twitter Blog Flickr InstaGram
  3. 3. 3 Information Media Partners Michael Cairns established Information Media Partners in 2006 as a boutique strategy consulting firm focused on the information and education publishing segment. The work conducted by the firm includes product development, corporate development, sales management and corporate reorganizations. We work with established businesses, private equity owners and potential acquirers. Examples of our work include:  Reorganized and re-focused a $25 million software publishing company by aligning business operations with client priorities; implementing internal collaboration tools and project management standards; re-building executive team to focus on effective and efficient management  Defined a new business strategy for a large non-profit association and advocacy group, expanding their business model into global markets to exploit their core knowledge and expertise across a broader market  Led an information technology capabilities review at a large international advertising holding company. Completed over 200 interviews in 15 international offices and multiple group focus sessions to define the operational ‘gaps’ between existing agency capabilities and those necessary and important for client delivery by region  Completed a sales management effectiveness review for a global software company and defined six key project initiatives to improve sales effectiveness, market development and account management We approach our client engagements in a standardized, logical manner which creates the best environment to identify key business drivers, administrative and logistical road blocks and/or product or market definition issues. Our investigative approach leads to better insights into your businesses and supports the development of workable solutions and recommendations for success. Visit the Information Media Partners website for more information. Sample Client List
  4. 4. 4 Some predictions on Educational Publishing Read the script to this presentation here: http://personanondata.blogspot.com/2013/03/presentation-at-nfais-conference-on.html
  5. 5. 5 Content “platforms” are the future  Extensible  Proprietary content  Applications  Source data  User data  Third party & free content  etc, etc, etc. 5
  6. 6. 6 Let’s add some ‘functionality’ Photograph: http://www.jack-nicholson.info/biography
  7. 7. 7 Thinking helps & ideas happen  The medical ‘simulations’ market  Merging traditional content with practice  Creating new content for specific practice  Self-publishing for faculty  Custom textbooks  Applying technology to improve process  State-wide initiatives to disintermediate 7
  8. 8. 8 Innovation is still on the fringe  Book publishers have absorbed the implications of digital publishing  Linked all the parts together  Haven’t addressed long term scenarios  Big change remains and will come rapidly 8
  9. 9. 9 YOU! Don’t lull yourself into complacency as though nothing can change until your only option is to close up shop, sell the few remaining stocks of printed matter you retain, go on the dole and become a weight on society where you end up having to take out eBooks at the library!
  10. 10. 10 Where to look  Slowing growth rate of ebook sales  eReader devices losing out to tablets?  Students dislike eReaders for textbooks  The big trade book merger  The bigger textbook divestiture 10
  11. 11. 11 11 Activity in 2012 indicates there are bigger changes upcoming not less. Photo: Universal Pictures
  12. 12. 12 Corporate Dev 101  Cost & expense  Economies of scale  New market(s)  Expertise  Technology/secrets  Eliminate competition 12
  13. 13. 13 Why Random Penguin?  All about scale  Reducing factor costs  Consolidating operations  Compete for bigger authors  Is it cynical? 3
  14. 14. 14 Watch 2013 bringing gifts….  More combinations in trade  Cengage & McGraw Hill?  Pearson: Already in year six  Will business model begin to collapse?  Basic questions: who, what, how, when, where concerning education  Fundamental: Who is the ‘student’? 14 2013
  15. 15. 15 What’s the platform Kenneth 15
  16. 16. 16 A successful platform  More combinations in trade  Cengage & McGraw Hill?  Pearson: Already in year six  Will business model begin to collapse?  Basic questions: who, what, how, when, where concerning education  Fundamental: Who is the ‘student’? 16
  17. 17. 17 Maybe it wasn’t his fault….. 7 Two years of college down the drain!Photo: Universal Pictures
  18. 18. 18 Education & economic value  Today, creates debt  Tuition  Non-productive workforce  Most old industries are tradition bound  Education no different  New economic value created in many sectors  Drivers: New models, wider access, better outcomes 18
  19. 19. 19 Destroyers or value creators?  Air BnB  Zipcar  Expedia  Craigslist  Facebook  Amazon  Walmart 19 Sadly, there is no ‘friend’ in Beverly Hills
  20. 20. 20 Platforms network transactions  Normalize a set of behaviors  Facilitate communication  Transact information, goods & services  Network effect drives usage & utility  Provider costs decline 20
  21. 21. 21 Have I got a MOOC for you!  Massive Open Online Courses  Direct to student model  Unlimited class size  Branded faculty abandoning tenure  Coursera, Edx, Udacity  Delivery unsettled – textbook still reigns  Custom  Self-publishing  Ebooks 21
  22. 22. 22 What do you mean there’s a test?  Assessment  Strong impetus in K-12  Becoming important in college & post grad  Adaptive learning  Tailored to individual capability  Self-regulated/directed  Empowers learner  Bigger in post college market? 22
  23. 23. 23 Is it just about ‘access’?  First year class size is stagnant  Applications have exploded  150,000 students signed up  Top ten ‘graduates’ were ‘non-students’  There’s a whole new world out there  Brand protection and extension  Model not perfect but not intractable 23
  24. 24. 24 Nathan says ‘it’s all over’…  “In 50 years half of the 4,500 colleges and universities will be out of business….”  The End of the University as We Know It  American Interest  Jan/Feb 2013  Google the title: http://www.the-american- interest.com/article.cfm?piece=1352 24
  25. 25. 25 Education is failing  New hires aren’t qualified  Student debt  Unaccountable administrators  Public funding  Free content  Research & experience suggests education doesn’t have to be personal 25
  26. 26. 26 Indiana University  Campus wide course materials platform  Negotiate with publishers  All content made available  Revenue model based on headcount  No returns, used books, 100% sell through  Pay’s with higher discount  Schools executing their negotiating power 26
  27. 27. 27 Platform as gateway?  Will winners control access?  Platform providers promise an audience?  Are walled gardens a good solution?  Mélange of players:  Amazon, Blackboard, Ingram, EBSCO, Pearson, Desire2Learn  Could state system ‘own’ a platform?  Physical boundaries of schools erode 27
  28. 28. 28 Campus content indexed  Coursload – Product catalog, library, archive, collaboration tool, publishing toolkit, learning support, access point via API  Collects content assets:  Licensed materials – library  Teaching materials – faculty & university archive  Research materials – faculty, press, etc. 28
  29. 29. 29 The Innovators  Many new entrants in education  PE investment accelerating  Eventually ‘run out of market’ with consolidation – but years off  Opportunities: workflow, training, content management, productivity, etc.  MOOCs already creating workable models  Innovators are addressing and solving problems 29
  30. 30. 30 Conclusion  Gap between college and business needs creates identifiable financial exposure  Public policy drive to improve outcomes  Network effects and technology make material improvements possible  Other industries prove the possible  Platform becomes ‘biosphere’ or ‘operating system’ for educators and students 30
  31. 31. 31 Please review my blog post associated with this presentation: http://personanondata.blogspot.com/2013 /03/presentation-at-nfais-conference- on.html Michael Cairns Managing Partner Michael.Cairns@InfoMediaPartners.com 908 938 4889 LinkedIn Twitter Blog Flickr InstaGram

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