I guess the time has passed when top people in companies had a vision and long term plans for their companies. Now it all comes down to managing the decline of companies, that is, making cuts. Sometimes it looks like that they know nothing but make cuts. And yes, they do not have a vision for the company, but they do have a vision for themselves, becoming richer every year.
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"if Pearson is not trying to diversify its revenue in higher ed there really is no growth opportunity."
And this is a fantastic example of the mindset plaguing giant publishing companies.
Pearson still holds the lion's share of the market, so sizable growth is more difficult to achieve and yes, diversification probably needs to be part of the equation.
But the fundamental truths still hold true: produce well-curated content that aligns well with professorial needs, you are going to get adoptions. Deliver easy-to-use technology and excellent support, tech-minded profs are going to adopt you.
Pearson continues to lose market share, semester after semester. Someone is winning these adoptions away from Pearson, and only a small fraction of those losses can be attributed to OER. The question in that case must be, "what are others doing that we are not?"
Content matters to a point. Unfortunately higher education is plagued by a business model that is no longer sustainable for growth. Your decision-makers (faculty) by nature will be high-maintenance, and demand your time and energy. All with little acknowledgment of their own responsibilities towards becoming fluent in the product being used. The icing on the cake is they are almost always not the buyer, who has its own set of goals and agendas that typically are counter to the publishers.
Having a smoother, more accessible user-experience will certainly add value but if Pearson is not trying to diversify its revenue in higher ed there really is no growth opportunity. The last administration under JF was beyond complacent and it brought in some of our worst profits in history .
Honestly, people may prefer a great system with lesser content than the inverse but neither has to be true. Content matters. Delivery matters.
Higher Ed should matter but growth is not likely unless there is a way to harness the reality that people have gotten much lazier at working to access anything and the unwillingness to pay for something that can be found for free even if lower quality is human nature.
To Anon, I disagree sharply that a focus on content makes for a weak competitor. Content IS the value these companies bring to the table, when it is well tended to that is.
Delivery/tech does matter, but a great system delivering lousy content is never going to win the day.
Otherwise, you are spot-on, IMO.
As a whole, Pearson is in way better shape than say a Cengage. Cengage is almost exclusively a content company. They are toast.
Pearson at least has some diversification in the form of virtual schools and testing. I just don't know if it is enough to make up for the sh-t-show that is higher education publishing but it sure helps.
For a company of its size, Pearson also carries very little debt....roughly $600mm on revenue of $4.5 billion or so. To put this in context, Cengage carries $2.2bb of debt on revenues of roughly $2bb.
Higher Ed will continue to be a drag on Pearson's performance. I don't see any growth in the short, medium or long term.
So if you are in higher ed, work will continue to suck. Why would they invest in a market that is shrinking and has zero opportunities to innovate at scale?
But hey, at least you don't work at Cengage!
The "five pillar" model is a pretty fair sign of what the company "vision" is - moving back to a conglomerate/holding company, allowing the pieces to operate more or less independently. This also increases flexibility in acquisitions and disposals, when such opportunities come along, much to your point about leaders getting richer every year.
If they hold true to the model, the downside will be that struggling units won't be able to rely on other units' success/revenue to carry them through. That would mark a significant difference from the last time Pearson operated as a conglomerate, and no one really knows how that would play out.