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What does publishing giant Pearson (s PSO) have in common with the giants of the video game industry? Not enough, apparently.
In a conversation at the SIIA Ed Tech Business Forum, Luyen Chou, chief product officer for Pearson’s K-12 technology group, said that as new technology upends the textbook publishing industry, his company needs to become an “Electronic Arts (s EA) for education.”
Clearly, Pearson and its rivals in education publishing need to reimagine their role as the rise of digital content cripples their business model. But look to Electronic Arts as a model?
Speaking with me later, Chou said that to keep up with the changing environment, traditional publishers can’t just digitize the static textbooks of the past, they need to excel at producing high-quality, interactive digital learning experiences and get them into the hands of students.
“[That includes] digital studios, animators, illustrators, producers, 3-D artists – we need to build that capacity within instructional companies like Pearson and we need the whole end-to-end supply chain to the take that from the studio to the actual users,” he said. “The folks that have done that well are the EAs of the world, digital studios. That’s not a core competency for companies like Pearson.”
Given the company’s wide reach across different corners of the market, from content to testing, at the K-12 and college levels and beyond, one of Pearson’s key assets is the massive amount of data it can use to target and personalize learning for students. And Chou acknowledged that the Electronic Arts parallel wasn’t meant to imply that Pearson only needs to focus on creating high-quality content, and not on other parts of its business.
“I take it for granted that we’re going to have a huge strategic advantage by way of the data we have on our customers, our students,” he said. “But you still have to serve up those compelling experiences. You can have the best data and the best algorithms in the world, but if what it ends up serving up is digitized versions of 2-D static content, it’s not going to sell either. We have to make sure that we’re complementing our data and platform with high-quality interactive learning content.” In getting to that goal, he said, it’s an open question whether the company will build or buy.
Interestingly, the SIIA ed tech conference itself took place at the McGraw-Hill Conference Center (s MHP) in New York and several speakers commented on yesterday’s news that the publishing giant had sold off its education division to private equity firm Apollo Global Management.
But while McGraw-Hill chose to divest itself of its education arm, Pearson has taken the opposite approach, arming itself with even more education companies in recent years.
In the last twelve months alone, the company has spent $1.6 billion on acquisitions, according to Baran Rosen, president of media investment bank Whitestone Communications. And, given reports that Pearson is exploring the sale of the Financial Times, its push in education will likely only continue.
“They are going to really be a pure-play education company,” Rosen said at the SIIA conference. “That’s where they’re staking their future and they’re doing it in a big way.”
Image by Cindy Minear via Shutterstock.