Learning to Adapt
In 2012, Houghton Mifflin Harcourt (HMH) filed for bankruptcy protection. In July of this year, Cengage Learning did the same, hoping to eliminate $4 billion in debt. Earlier in the year, McGraw-Hill completed the sale of its entire education division. And though HMH has since emerged nearly debt free and is seeking an IPO, clearly these are signs that disruptive changes are underway in educational publishing.
But even though the future is uncertain, it doesn't mean the end is near. "It's a wonderful market," says Robert Lynch, vice president of publishing strategy at Finitiv Corporation. "It's a market that's not going away. The need for content is not going away. The need to help teachers teach and the need to help students learn is not going away."
The bright side of the story is that established publishers, once rulers of all they surveyed, are opening their minds and doors to new technology and new partnerships with innovative startups, while at the same time technology is catching up to its early promises. Sandi Kirshner, chief marketing officer at Cengage Learning, says she's seen a willingness on the part of the whole industry to pursue technological solutions. "I think the recognition is more an outgrowth of the capabilities of technology. As the technology has evolved, more is possible, like capturing the data from every keystroke a student makes."
No one force alone can be blamed for the ongoing upheaval, but it's clear the combination of an economic downturn, tightening budgets and disruptive technology have served some powerful blows to the industry. "The recession hit the educational sector badly," says Lynch, who has a long history in the education sector, including stints at Thomson Learning and McGraw-Hill. "Property taxes by and large fueled school and state budgets, and a lot of these large states couldn't buy textbooks. They delay the adoption schedule."
Lynch says the disruption of the publishing and purchasing schedules causes multi-million dollar programs to bleed revenue. The continuing increase in textbook costs is also a contributing factor. "As tuition goes up, that cost of textbooks becomes even more of a burden," says Lynch. The internet opened up a inventory of pirated, old and foreign copies to students, while faculty became less tied to specific textbooks. "It created this spiral," says Lynch. "You add to that, the movement of providing digital content with a lot of interactivity and multimedia, which is very costly."
Kirshner says that while the economy certainly has played a role in industry woes, the introduction of new technology in the last ten years has been the most profound agent of change, and those that make the wisest investments in technology will come out on top. "All of us, if we're honest about it, are learning about [technology]. The science behind how people learn is becoming a big part of our business."
In many ways, the technology that has been a source of major disruption is also a massive opportunity for publishers, although with a number of caveats, says Chris Goodson, senior vice president of services innovation at HMH. "We understand it's not a panacea. There's a lot of noise around what technology can do. There's still the [problem] of access and adoption. There are a lot of places without enough bandwidth."
Considering the User: A Smarter Future
Though these outside forces are factors, Lynch feels that some onus should be placed on a paradigm that exists within the industry where the end user is insufficiently considered. In many ways, textbooks, especially in higher education, have not met the needs of students, says Lynch. "I think the reason is K-12 and higher education publishers don't think of their customer in the same way as people who make cars or make jewelry do. They build a product for the decision maker, rather than the user, kind of like dog food."
Kirshner has seen that old paradigm begin to shift: "I think our industry is very focused on the student and the learner and that' s the biggest development…we are much more tied to the results that our products bring than ever before."
To that end, much emerging technology is geared toward enhancing the efficacy of publishers' products. Through the use of big data analysis, tech firms are attempting to reinvent the current education model. There are a lot of terms thrown around—adaptive, personalized, data-driven—but at heart it is the pursuit of tools that learn how a given student learns and follows them through their development.
Knewton is one such adaptive learning firm, and has partnered with the likes of Pearson, Cengage, and HMH. The company has built a platform for publishers to deploy educational applications, rather than building the applications themselves, says Knewton COO, David Liu. "We're building the data infrastructure for proficiency predictions and recommendations. We're not building the middle school algebra application. We're gonna power that. We're the Intel inside."
Liu says that personalization is disrupting the entire education sector, and that Knewton benefits from partnering with large publishers because together, they can gather a massive amount of data on student learning. Liu cites the partnership with HMH, which has a huge share of the K-12 market. "If you just look at the reach of that, the students that will take the math courses powered by Knewton, you're going to see the promise of this longitudinal personalization taking hold."
The drawback of the current education model—as it's been throughout history—is that you are "literally an unknown entity when you step into a course," says Liu. Adaptive learning allows for the level of proficiency a student demonstrates in a math course to be applied to science courses, making the experience more relevant to each student. Knewton's approach is intended to serve an individual throughout their development, from K-12 (or earlier) on through professional training or career changes.
Liu says that a lot of companies are coming around to technology—not only willing, but aggressively moving in that direction—and that adaptive learning is no longer a question. "Every application that they build in education, whether startup or established, will be adaptive."
Kirshner agrees that data analysis will lead to a more productive experience for teachers and students. “Technology is not a matter of turning on a computer and looking at a screen,” says Kirshner. “Personalized and adaptive learning are going to be part of the future. Any company in the industry should be thinking about ways to personalize the experience. The more data we all can collect and analyze, the better it is going to be for the student.”
This is essentially what powers Knewton: the company has a team of data scientists and software engineers in which it has heavily invested and which allows it to harness the power of "big data." This is not a core competency for most publishers. "We're getting feedback from Pearson, others, saying it's very difficult for us to do this," says Lui.
Liu feels that publishers should seriously consider where a partner can do something better than they can do on their own. "In a lot of the discussions we're having with publishing houses, they all say, 'Why shouldn't we do this in-house?' Then they all go through that process, whether it's six months or a year." In the end, it can be very costly experimentation, says Lui. "Their core competency is instructional design and education content development. I think the content is better than anything you'll see from the open education resource movement. What the publishers do incredibly well is organize this content to deliver an outcome."
Publishers should look at themselves as content producers rather than textbook makers, says Lynch, VP of publishing strategy at Finitiv Corporation. "Publishers know how to make content. Publishers' talent is working with authors, which is a significant competency. Taking lots of information and consolidating it and writing it and reinterpreting it with context and in a meaningful context, and adding to that a pedagogical structure so you can learn from it—that's what they do. It makes no difference how it's delivered."
A tipping point in favor of adaptive, data-driven learning is inevitable, says Liu, and that adaptive tools will eventually eclipse old product lines—namely, textbooks. Those that manage down the old revenue streams while pursuing the new are going to become the winners, says Liu. "I believe in the future it will all be data driven and competency based."
If the future of learning is in fact adaptive and data-driven, then one sign of the times was the acquisition of adaptive learning technology firm Aleks Corporation by McGraw-Hill Education in June of this year.
One of the healthy benefits of a more personalized approach to learning for students is that publishers have been prompted to reorient their products toward the end user—long a hallmark of the technology sector. Some also see technology as a trigger for a more holistic approach to student learning. "It would be my hope that those of us in this industry stop having lines that divide our K-12 and higher education operations," says Kirshner of Cengage Learning. "I think, more and more, as we look at the students themselves, we're going to see more cross-pollination between these groups."
However, the path to the future is by no means unhindered. Although technology is empowering the sector, it faces obstacles of access to and adoption of technology. Public institutions have a lot of big decisions about where money is spent in order to explore technological solutions to education, says Kirshner, whether it's the devices students use or making sure schools have sufficient broadband access.
Lynch agrees: "To me the challenge for publishers, is how do I develop tools, content and methodology that can improve the teaching and learning in large public schools in urban areas? And from a business perspective, that's where the students are."
In some regards, higher education has led the way when it comes to technology. "K12 has been on the sideline," says Lynch, "because of the lack of access to computers and handheld devices in this country. It's hard to have a consistent approach to the use of digital technology." In higher education, students are able to approach learning more independently, bring their own devices, and on most domestic campuses, have access to the internet.
However, Goodson from HMH says it's important for publishers to find learners where they are and understand the channels they use to find content. In some cases, textbooks are still the best way to reach students. "We want to give every student equal chance to consume our content in some way. You hate to see technology as a divider."