MediaWeek (V4, N44): McGraw Hill Education, Pearson Acquires, Open Access, TIme Mag's Education + More

Brian Kibby, President of McGraw Hill Higher Education interviewed in Inside Higher Ed

Question 4: It seems to me that in your position as president of McGraw-Hill higher education you have before you the very difficult task of leading an enormous change in how your company operates. For many many years the big educational publishes have made very good money with a model of printed books and digital add-ons. You are saying that by 2015 that traditional educational publisher model will be as dead as Blockbuster video, as dead as the old record stores. How are you going to transform your corporate culture and lead your employees to embrace this change? And why should we expect that any big traditional publisher will be able to evolve to embrace this new digital world, as there are not many very good models in other industries of other legacy companies making similar transitions.

Answer 4: McGraw-Hill Education is a company with over 100 years of experience in education, so obviously it’s a place with some history. But the world and the needs of our customers have changed dramatically, as has the technology now available to help satisfy their demands. Our team has embraced this change whole heartedly. Our culture has become one where we have a passion for creative disruption, especially as it relates to what is important to our customers: improved results, retention, and the ability to become even more competitive in the marketplace.

We’re focused on technology now in a way that we’ve never been before, but we still have that deep respect for content, and I think that our employees really appreciate that.

With regard to other models/industries, I think we’ve had something of a late-mover advantage. A lot is made about how education has lagged behind other areas in adopting technology, and I won’t go into that but to say that the more gradual transition in our space gave us the chance to sit down and really figure out the best way to do digital from a business perspective. Newspapers had to make that choice back in the mid-90s, and the music industry had to face it in the early 2000s. Like everyone else, we needed to figure out how to get people to think about digital as something you pay for, and our answer to that was to make digital products that were worth paying for. I think we’ve been able to do that pretty successfully, and the market has responded well.

Pearson announced its largest acquisition in over five years on Tuesday with the purchase of EmbanetCompass, a provider of digital services such as online degrees to leading non-profit colleges and universities in the US (FT).  From Embanet's website:

EmbanetCompass is the premier provider of online learning services and technological solutions for top-tier academic institutions. We are acutely aware of the dynamics that drive higher education and utilize our experience and expertise to assess, finance, develop, recruit for, market and support online learning solutions for our academic partners.

 A new study suggests that open access publishing is larger than expected (Guardian):

They should be encouraged by Laasko and Björk's study which, fittingly, is published in an open access journal. The Finnish researchers found not only that nearly 17% of research papers worldwide are now published in open access journals, a figure that is two to three times higher than was previously supposed, but also that the exponential rise in open access publishing shows no sign of slowing down.

In the UK, since about 35% of papers are reckoned to be made available through deposition in repositories — the green route — the total percentage of open access papers (52%) looks like it has crossed the half-way mark.

Time Magazine devotes most of its current issue to education.  Here is a sample on MOOCs (TIME)

To compare my online experience with a traditional class, I dropped into a physics course at Georgetown University, the opposite of a MOOC. Georgetown admitted only 17% of applicants last fall and, with annual tuition of $42,360, charges the equivalent of about $4,200 per class.
The university’s large lecture course for introductory physics accommodates 150 to 200 students, who receive a relatively traditional classroom experience — which is to say, one not designed according to how the brain learns. The professor, who is new to the course, declined to let me visit.
But Georgetown did allow me to observe Physics 151, an introductory class for science majors, and I soon understood why. This class was impressively nontraditional. Three times a week, the professor delivered a lecture, but she paused every 15 minutes to ask a question, which her 34 students contemplated, discussed and then answered using handheld clickers that let her assess their understanding. There was a weekly lab — an important component missing from the Udacity class. The students also met once a week with a teaching assistant who gave them problems designed to trip them up and had them work in small groups to grapple with the concepts.
The class felt like a luxury car: exquisitely wrought and expensive. Fittingly, it met in a brand-new, state-of-the-art $100 million science center that included 12 teaching labs, six student lounges and a café. It was like going to a science spa.
Elite universities like Georgetown are unlikely to go away in the near future, as even Udacity’s co-founder (and Stanford alum) David Stavens concedes. “I think the top 50 schools are probably safe,” he says. “There’s a magic that goes on inside a university campus that, if you can afford to live inside that bubble, is wonderful.”

Where does that leave the rest of the country’s 4,400 degree-granting colleges? After all, only a fifth of freshmen actually live on a residential campus. Nearly half attend community colleges. Many never experience dorm life, let alone science spas. To return to reality, I visited the University of the District of Columbia (UDC) — a school that, like many other colleges, is not ranked by U.S. News & World Report.

Disruption in the news business from Nieman Report:

With history as our guide, it shouldn't be a surprise when new entrants like The Huffington Post and BuzzFeed, which began life as news aggregators, begin their march up the value network. They may have started by collecting cute pictures of cats but they are now expanding into politics, transforming from aggregators into generators of original content, and even, in the case of The Huffington Post, winning a Pulitzer Prize for its reporting.

They are classic disruptors.

Disruption theory argues that a consistent pattern repeats itself from industry to industry. New entrants to a field establish a foothold at the low end and move up the value network—eating away at the customer base of incumbents—by using a scalable advantage and typically entering the market with a lower-margin profit formula.

It happened with Japanese automakers: They started with cheap subcompacts that were widely considered a joke. Now they make Lexuses that challenge the best of what Europe can offer.

It happened in the steel industry, where minimills began as a cheap, lower-quality alternative to established integrated mills, then moved their way up, pushing aside the industry's giants.

In the news business, newcomers are doing the same thing: delivering a product that is faster and more personalized than that provided by the bigger, more established news organizations. The newcomers aren't burdened by the expensive overheads of legacy organizations that are a function of life in the old world. Instead, they've invested in only those resources critical to survival in the new world. All the while, they have created new market demand by engaging new audiences.