Thursday, December 06, 2012

Disrupting The Disrupted

After Barry O'Callaghan's attempt to create the world's largest educational publisher fell to bits, you'd think that the educational publishing market could be described as disrupted.

It wasn't exactly smooth sailing before he nearly drove Riverdeep, Greenwood, Houghton Mifflin and Harcourt to utter ruin, but the fall-out from his massive debt-financed deal did nothing to calm the waters of educational publishing.

There are still those who believe that there is profit to be made in educational publishing, in spite of ever shrinking school budgets that limit new purchases to few and none.

Joel Klein of News Corps' Amplify unit is one such starry-eyed executive who sees gold where others have found fairy floss.

Like Mr. O'Callaghan, he is convinced that education is crying out for electronic devices and digital content, a niche worth billions.

It sounds lovely, to create a world in which students have tablet devices where now they have dated, rotting textbooks. Imagine the children of America, learning from material that can be updated with a simple download. Where teacher training is a click away.

Mr. Klein intends to drum up sales for Amplify and become the industry leader. Sure the group is losing money now, but once the Federal government starts funding that Race To The Top program, that's when Amplify will turn the corner.

Amplify is going to change education, he says.

Those who once toiled at the publishers that become EMPG have heard that tune sung before, but with a distinct Irish brogue.

Education needs changing, and Mr. Klein has noted the dismal record of achievement that American taxpayers are currently getting for their money.

At present, however, there is no money.

It doesn't matter that the current President has a plan for education reform. The unit of government that approves the use of government funds isn't exactly on board, and there is no stomach for more spending when the national deficit is equal to the nation's gross domestic product. And over-all unfunded debts are equivalent to approximately the wealth of the planet.

As much as Amplify might plan to increase market share, the market is highly competitive with other educational publishers who are all heading towards a digital future.

Whether Amplify will win the race or come in dead last, only time and improvements to economic outlook will tell. If such improvements don't come to pass before Amplify has lost so much money that the Murdoch clan decides it's time to kill the unit, it won't matter how much Mr. Klein wishes to bring order to disruption.

He'll be out of a job.

Like Barry O'Callaghan.

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