1. Moving the Unit of Sale from Print Materials to Digital Media John Richards, Consulting Services for Education Michael Campbell, Follett Duncan Young, Scholastic George Kane, Pearson Education

2. Moving the Unit of Sale from Print Materials to Digital Media John Richards, Ph. D. Consulting Services for Education, Inc.

3. Innovator’s Dilemma (Clayton Christianson) Why do well run companies who listen to their customers fail? Why do industry leaders fail to make the jump to Disruptive Technologies? Not enough $$$ to make a difference No demand from existing customers Disruptive Technologies emerge in niche markets

4. Print to Digital In 1972 there were between 25 and 30 Basal Reading publishers Today there are 3 (4 if you count Scholastic) Can textbook publishers move to digital publishing? Free with purchase What is the niche market for the emergence of digital media?

5. Moving the Unit of Sale from Print Materials to Digital Media Michael Campbell, Follett

6. The Content Need Traditional Print Content moving to digital formats. –Textbooks –Supplements –Assessment –State Standards

7. What is needed to make the switch Format/Delivery –E-book readers –LMS Systems –SIF Standards Cooperative –Academic Benchmarks

8. Value - Pricing Textbook Models Tagging learning objects Open Source

9. Business Models Traditional Publishing Model Modified Publishing Model New Models

10. Moving the Unit of Sale from Print Materials to Digital Media Duncan Young, Scholastic

11. Digital Fragmentation Lessons from the Music Industry for Education)

12. 12 What is Digital Fragmentation? Shift of the unit of sale from print to digital Shift of the unit of sale from the whole to the part

13. 13 Decrease in distribution barriers -e.g. iTunes does not have the physical constraints of a bricks and mortar store Increase in the breadth of providers bringing innovation to the market -E.g. easier for independent bands to find an audience (the “ long tail ” ) Decrease in the power of traditional producers -Major labels Increase in the power of companies that sort, vet and contextualize content -Apple, Pitchfork Media Digital Fragmentation in the Music Industry

14. 14 What Causes Digital Fragmentation? There are sufficient enabling technologies and standards The “ part ” is equally as valuable as the “ whole ” There are no artificial or regulatory barriers to adoption Digital Fragmentation will occur rapidly if… MusicEducation

15. 15 So what can we predict about digital fragmentation in education materials? The “ Digital ” piece of digital fragmentation has happened and will continue to happen -Some delays as teacher habits, funding sources, standards “ catch up ” The fragmentation piece will occur in some forums, but there will always be room for pedagogical approaches that result in the whole being greater than the sum of the parts (more “opera” than “pop song”) There will be an explosion of home grown and user content that in theory is available to everyone -However, there will be an increased need to evaluate, sort, and vet that content, and for students to learn these skills

16. Moving the Unit of Sale from Print Materials to Digital Media George Kane Pearson Education

17. Pearson’s Digital Initiatives eBooks: embedded & stand-alone Digital content for smart whiteboards MyLabs Mobile delivery experiments

18. MyLabs drive sales Product LineMyLab Program`08 Student Registrations `07 - `08 $ Increase* 1. MathMyMathLab1,437k$29.3M 2. IT trainingMyITLab265k$10.8M 3. Prin of EconMyEconLab163k$3.7M 4. Gen ChemMasteringChem155k$6.4M 5. Gen PhysicsMasteringPhysics138k$2.3M 6. English CompMyCompLab135k$3.5M 7. Gen BiologyMasteringBiology105k$13.1M TOTAL:$69.1M * = US HE sales

19. Growth in direct-to-student sales 2.2 M total registrations $6.01 M (7.2%) 2.9 M total registrations $11.9M (9.3%) 4.3 M registrations $23.1M (11.3%) 1.1 M registrations $10.3M (17.1%) Student MyLab Registrations

20. Challenges K12: different purchasing dynamics than HE “Customization” vs.“Personalization” vs.“Roll your own” High-value content-based use cases for mobile devices Lack of standards for learning environments and content Digital copyright protection