Apr

2

Portfolio Power Down

Filed Under B2B, Big Data, Blog, data analytics, Education, Financial services, healthcare, Industry Analysis, internet, mobile content, news media, Pearson, Publishing, Reed Elsevier, Search, Uncategorized | 2 Comments

In the days when everyone did everything, few people did everything well. But I loved it. Editors in magazine companies moved from the Meat Trade Journal to the Retail Jeweller in a moment. I myself was transmogrified in a 3 line memo from running educational publishing to leading the charge in building a law publishing empire. We were in Publishing, we were Men (sadly, mostly) for All Seasons. “These are just businesses” we used to say. “You don’t need to be a lawyer to run publishing for lawyers”. And part of me still believes that, except nothing can now forgive how arrogantly little we knew about the needs and behaviour of the good people buying our publications.

These thoughts came to mind two weeks ago while reading this press release: “The company plans to complete its portfolio rationalization by exploring strategic alternatives for McGraw-Hill Construction, a leading provider of essential data, news and insights to better inform construction professionals’ decisions in the United States. McGraw Hill Construction has approximately $170 million in annual revenue and stand-alone operating margins approaching 20%. The business has shifted away from legacy print products to new, innovative data and analytics offerings, which are generating double-digit growth. Evercore Partners is acting as a financial advisor to the Company in this matter” (www.biia.com). It reminded me why we built these curious portfolio companies in B2B in the first place, as well as confirming my view that most press releases mean the opposite of what they say (“complete” in the context of the above note must be taken in the context of a complete review having broken the corporation into two and divested Education!).

We reached this place through a long experience of periodic recessions – at least that has not changed. We got here because we argued that a balanced portfolio gave us assets which would not all go down at the same time, and a balance of early first-in, first-out victims, recession proof activity (that is how we saw law publishing in the 1980s!) and quick recovery vehicles would proof us against all eventualities. Add in a blend of other qualities – some selected for high growth, others for cash generation, a few for high margins and we convinced ourselves that we could really get “balance” in a portfolio. But all of those traditional craft became waterlogged in a recession which was like no other in information marketplaces. As we emerged it became clear to all but the recidivist publishers that publishing, as experienced in the previous 50 years, was just about over. When we could pry people’s compulsive attentions away from their smartphones in order to ask them what they wanted, people did not generally say “book” or “newspaper” or “magazine”. In other words we were left asking Format questions which did not satisfy answers expressed as “solutions”, or “excitement” or ” learning without teachers” or even, “answers”.

Last week I was at a European Union workshop in Luxembourg on what we are going to do about stimulating the Creative Industries in Horizon 2020, the Commission’s workplan for 2015-2020. Only the nice lady from FIPP used the word “publishing” on any of the sessions that I moderated or attended, and even then with a sort of apologetic bashfulness. So it does not surprize me that the great portfolio conglomerates built in the publishing space of yesteryear are crumbling away, but it is worth asking why, and what may replace them. Companies change mission over time – think only of Pearson, a late Victorian builder’s merchant from Yorkshire which exploded into growth as an oil explorer in Latin America before, in late cycle, using the accumulated capital to become a brand portfolio in the post – war years. Now it is a single market entity once again, with just one of its brand acquisitions, Longmans, the eighteenth century bookseller/publisher, becoming the path to a remarkable twenty-first century market leadership. This is an odd story but not an unusual one. Portfolio is part of a cycle.

So what did Pearson need when they went single market in education? Well, specialist educational expertise is part of the answer. The single market specialists do seem to have a layer of market expertise which is very different from the jack-of-all-trades tradition that I noted above. And managers can talk tech talk and know what they are saying, while technology investment has become the key marker for many. Can you put a portfolio on a single platform is the “how many angels can you get on a pinhead” question for the industry rationalist schoolmen. Truth is, I believe, that new platforms and greater data concentration and increasing semantic analysis and domain ontologies increase specialization. For the portfolio players this raises a problem of choice and investment. Sometimes the answer, and this may be the case at McGraw-Hill, is not to invest further but to dispose. You could call this the D&B Gambit, as it retreated from portfolio ownerships over the last decade onto a core specialization. Sadly the pieces it sold are now worth more than the bits it retained, which is another warning to portfolio dismantlers.

Pieces of stucco have broken off some of the best regarded frontages in the industry in recent years and gone crashing to the pavement. Think of Penton Media in the US, now mercifully under management with a new plan. The McGraw announcement along with the break-out of Axios, itself a mini-portfolio, from UBM tells me that this is speeding up. And the units going now are not unprofitable, just not investable in the holding group context. And they are going to market now because markets are receptive to this kind of M&A in a way that we have not seen since 2008. So put your head back into the portfolio dominated world of 17 April 2008, when the market leaders included UBM, Informa, McGraw-Hill, Reed Elsevier, Wolters Kluwer, and Thomson Reuters, which was created on that day. Now, tell me which players will specialize in what as the ice thaws and the Big Portfolio Break-Up begins. Answers on an email please to david@davidworlock.com.

Feb

12

Schools in the Cloud

Filed Under data analytics, eBook, Education, eLearning, Industry Analysis, internet, mobile content, online advertising, Pearson, Publishing, social media, Uncategorized | 1 Comment

There is something about Professor Sugata Mitra. The award-winning TED exponent of individualized learning was speaking yesterday at the meeting organized at the British Library by Cambridge Assessment (and well done to them) and within moments he had subtly undermined the subject title. His respect for teachers was unlimited, he told an audience comprised mostly of teachers, even if the teacher was a machine. Using his celebrated Hole in the Wall work (http://www.hole-in-the-wall.com/) he chatted affably while casually lighting sticks of dynamite and tossing them into his audience. Is there a barrier to learning that needs teacher moderation? Well, if you put Indian kids in his experience in the same context as a computer then they will learn for themselves. It takes nine months to get them to the same level of proficientcy that you would expect of an English office worker, but they get there – and they self teach English on the way. And it works in Northumbria (he is now Professor of Educational Technology at Newcastle) as it did in Kalkaji (Delhi). No one could occupy the same space as this man without knowing that self-learning and group learning drive educational change, not teachers or technologies. And the group is vital (as is the Grandmother – he includes a reference point figure in his experiments, explaining that we all need praise and admiration to ensure that we persevere!).

In a crowded agenda (billed as a debate, though it transpired that there was little time for that) it is only possible to pick highlights. Like David Puttnam contrasting his 44 honorary degrees with his three “O” levels, and talking about the comic books that inspired him to learn. Or Clive Beale’s attack on ICT labs, with rows of screens but no space for collaboration. As the morning wore on you might have thought that all you needed was Raspberry Pi and self-taught Scratch and internet access at home (Mind the Gap: http://www.mindthegap.org.uk/about-mind-the-gap/), or the good fortune to have enrolled in Christine Swan’s class at Stourport High School, getting enabled as a builder of Minecraft worlds, and all would be well. And she reminded us too that while her school allows pupils Bring Your Own Device (BYOD) rights we still have no methodologies for assessing learner device knowledge or indeed assessing the outcomes of collaborative learning (which begs the question of whether we need to assess these things – maybe teachers need those assessments, but do they help learners?).

So we kept on talking about teachers, and not about learning. Which meant that it was good to hear from two Mooc providers, both in their different ways demonstrating that a Mooc is an undefined entity which can be just about anything you want it to be. Future Learn (https://www.futurelearn.com/about/team), from the Open University, provides one interesting twist. This is Mooc injected with social media. Here you can check your progress with your co-learners – no one wanders alone in this Cloud. It scores high levels – 34% is very distinguished here – of active engagement by users, so the social aspects seem to be working There are now 29 university and institutional backers, alongside sponsors like BT and IET. The scheme has 10,000 initial users from 190 different countries and some parts of this presentation seemed to me to go to the heart of the matter. For example, I applauded the stress on vicarious learning – those happy accidents that seem to follow, in all our learning experiences, through a conjunction of context and enthusiasm. And this is an environment designed explicitly for the smartphone screen, since this is the learning centre in so many of those countries. And then the Argugraph – an online tool for charting how arguments are changing in group discussion – seemed to me to show a real determination to match new styles of learning with appropriate instruments, even if those are not yet fully evolved.

Just as engaging, and now past breakeven and into modest margins, was the Galway-based private enterprize ALISON (Advanced Learning Interactive Systems OnLine; www.alison.com). Mike Feerick, its CEO, uses an advertising/sponsorship business model to propagate some 600 vocational and skills-based course to 3 million users, including 500,000 in Africa. Since they are growing at 200,000 users per month, even while bearing in mind that completion rates on all Moocs are low, there is a suggestion here that they have found a formula which works. The service is genuinely international, and Mike Feerick was at pains to point out, in a world of commoditized content for schools, that organizations like his can very rapidly move to cover national requirements (in weeks in the case of the maths curriculum, where he is also able to collaborate with partners like Macmillan’s Math Doctor: http://alison.com/news/Free-Maths-Lessons-on-the-Maths-everyone-needs-to-know). In other words, core courses can be rapidly re-framed around learner needs, which becomes competitively important if your chief competitor is YouTube. In that competition, ALISON would point out that they are the learning experience which is vetted, tracked, and standardized by length and level. They also want to speak clearly to employers, pointing out that an ALISON certification allows the learner to demonstrate exactly what he knows to a prospective employer by rehearsing the test online. At last Moocs are beginning to sound like sustainable businesses and less like an alternative revenue stream devised by university finance staff. And at last a speaker who recognized the importance of analytics in this context!

I could go on, for it was a rich day of 12 speakers. Helen Eccles of CIE, the international side of Cambridge Assessment, must, for example, deserve a mention for the teacher-free purity of Global Perspectives, the trial of broad cross-disciplinary subjects (“traffic congestion” is the trial example for the new IGCSE examination. Yet by the end, amidst all the opportunities they we now have to rethink the educational space, I was surprized that we did not speak more about assessment (considering who sponsored this meeting!), about content (there were three or four publishers in the audience, most from Pearson, but there should have been 50!) and about the Cloud! As I write this I note that McGraw Hill Education have followed the earlier acquisition of ALEKS with the purchase, this week, of the remaining 80% of Area9 Aps which they did not own (http://www.mheducation.com/about/news-room/mcgraw-hill-education-acquires-area9-developer-adaptive-learning-technologies-k-12): here then are investments in adaptive learning that also follow the idea that learning, if not the School, now goes to the Cloud. Are publishers really aware of the implications of this, and of the commoditization of content to which one speaker referred? We are now way beyond the world of the digital textbook.

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