Follow the money
I recently contributed to an article published by Sylvia Guinan’s blog on future trends in digital learning in which I concluded with the quote “follow the money…”. This was interpreted by some readers as meaning that you should focus on doing things that make you money, whereas what I meant was that to understand the behaviour of new businesses active in English Language Teaching (ELT) you often need to look at their financial motivation and how they plan to make money from their efforts.
“Follow the money” was coined in the 1975 film “All the President’s Men” to show how journalists can uncover illegal behaviour by following money trails. But the term is also useful for understanding perfectly legal behaviour, even though some find the idea of big business making big bucks from education distasteful.
So, what are ELT’s money trails, and what do they mean? And why does this matter?
According to Ambient Insight the worldwide language learning market was worth $56.3 billion in 2013, of which ELT accounted for 63%. I’m not quite clear how they calculate this figure, and what precisely it includes, but it’s a considerable amount of money. The full 358-page report costs $15,000, which buys you more detailed analysis for 98 countries.
Digital ELT accounted for $1.8bn but Ambient predict strong growth in this area and a “surge in revenues for digital English learning content worldwide”. These kinds of statements attract the interest of companies and entrepreneurs from outside education, and are used to support investment bids by existing ELT departments to their Boards.
Ambient reckon that the overall market is shrinking, because of what they call “cost-effective technology based products and the migration away from classroom and print products”. I agree, there does seem to be a strong shift in favour of online tutoring, and this is beginning to have an impact on face-to-face learning.
I’d say the move from print products has been slower than claimed, partly because the governments that have announced large-scale digital projects have often quietly abandoned or delayed these projects. There are some important obstacles that need to be overcome, including establishing effective IT infrastructures, e.g. easy Wi-Fi access, and and pricing models that make sense to publishers and customers. There seems to be a bit of a gulf between some customers who expect content for free, and publishers such as Pearson that charge around £40 for a course book plus one year’s access to the digital component.
And many if not most publishers have still to create sufficiently good online user experiences to match that provided by a good quality course book. But overall, the underlying trend is there, even if it is much slower than I personally predicted five years ago.
I would also say that Ambient is probably over estimating the opportunities for English language learning apps. There is certainly some demand for free apps, but much of this is for free content, and the conversion from free to paid-for content is tiny. One exception is exams practice, indeed the exams and assessment market is huge, and not discussed very much in the summary.
I’m also a bit skeptical about the claims for what they call “Mobile Learning Value Added Services”, which are subscription services for English learning products, provided by mobile phone companies. These companies have partnered with content providers and split the revenues, and my understanding is that this is quite a tricky sector, partly because it’s very difficult to create a decent educational product, and learners quickly abandon their subscriptions when they realize they’re not learning very much.
Ambient also report strong demand for specialised forms of English, e.g. in countries hosting the Olympics or other major sporting events, the energy sector, Aviation, and English for Academic study. I had quite a strong sense of déjà vu reading this section, as there has been excitement about ESP in the past, much of it under realised. Perhaps one exception is English for Academic Purposes, which is growing, because of the growing internationalisation of higher education.
So, why is all this important? It’s important because our potential future employers and clients are heavily influenced by these kinds of reports and the trends that they report on. It explains whey companies are acquiring other ones, e.g. Rosetta Stone now owns Live Mocha! And it also explains recent investments in key enabling technologies such as speech recognition.
But much of this investment will be wasted unless it includes investment into research and development into good pedagogical models. For instance, a lot of online tutoring is one-to-one or small group-based, which means that the pricing is either too high for many learners, or economically unviable for most teachers. Equally, we still have a lot of work to with creating good quality courseware, and in creating business models that balance affordability for the end users with a decent return for the writers and publishers.
Who, if they don’t get a decent return, will not be following the money, instead they will be running in the opposite direction.
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