The Xplanation

Last week, I outlined a model for profitability that textbook publishers could use as they plan product strategies in the digital age. That model identified viable products as those that cost less to produce, generate strong revenues, and (most importantly for the digital world), possess a high flexibility value.

I also identified four product types or categories for textbook publishers that fall within the most attractive quadrant on my chart showing profitability potential — assessment, subscription models, digital, and custom digital.

As these “products” are rather generic, however, I thought it might be helpful to provide a more specific strategy for one of the categories — assessment. My goal is to show how textbook publishers can evolve existing models to garner new revenue models that: 1) are attractive because they take advantage of existing content and workflows (lower costs); 2) address evolving market niches with agility.

Assessment

Assessment represents one of the biggest product opportunities for textbook publishers over the next decade. In fact, while revenues related to print textbooks diminish, assessment products have the potential to become a primary independent revenue source.

In order for this to happen, textbook publishers (or other companies), will need embrace the following strategy.

• Unbundle assessments from textbooks and homework management platforms — Not surprisingly, the textbook continues to occupy the center of the textbook publishing universe. Success in the digital age, however, calls for an aggressive unbundling of both content and tools and services. Today, assessment products are generally paid for by textbook budgets, mapped to textbooks, and offered as textbook bundles within homework management platforms. In order to realize their potential for profitability moving forward, Higher Education publishers will need to think of assessment as an independent business with primary content mapping to course and learning objectives. This means that the content can support textbooks, but can also provide easy/dynamic mapping to self-published content, open educational resources, and proprietary institutional courses.
• Make all assessments adaptive at different levels — One of the biggest challenges facing assessment in Higher Education is a general lack of sophistication, both in terms of the learning levels assessed and the manner in which learning is evaluated. Currently, the vast majority of assessment provided by textbook publishers targets the lowest levels of Bloom’s Taxonomy — knowledge and comprehension. As Higher Education responds to pressures around online and self-paced learning, however, textbook publishers have a tremendous opportunity to create assessment content that evaluates and reinforces student learning at the higher levels of Bloom’s model — synthesis and evaluation. In order to effect this transition, publishers will need embrace adaptive assessment at multiple levels. This means the current formative models found in products like Aleks or Prep-U, but also story-based simulations and immersive scenario assessment.
• Make assessments interactive — As assessment products evolve to address higher levels of learning comprehension, they will necessarily become more interactive. This entails a philosophical shift of sorts, away from passive assessment toward a more active model. This shift could be as sophisticated as designing multi-step assessments with animation, but is also accomplished cost-effectively by creating decision-based models/templates that can plug in many different types of content.
• Support diverse content — Another key to the profitability of assessment products in the coming decade is the ability for their authoring and output engines to accommodate different types of content as well as content from many different sources. This translates to broad media support but, more importantly, to support for user-generated content and the easy integration of open educational resource content. It is critical here to understand that the future of assessment is as much about assessment as a service as it is about assessment as a specific content package.
• Aggregate assessment tools into flexible content/service suites — It is also critical for textbook publishers to combine disparate assessment tools into unified suites of assessment services that exist independently of textbooks per se. These suites should encompass existing tools — adaptive assessment engines, clicker technologies, learning outcomes solutions — and extend those with common content repositories and mobile products that can service both the enterprise and individual instructor/student needs of the market.
• Create mobile extensions — Make no mistake about it, mobile applications and integrations are the key to profitability for assessment moving forward. This means a number of things. First, assessment content must be accessible both via device and Web app models on iOS and Android mobile devices. In addition, assessment authoring must be extended to these products in simple yet powerful interfaces. Finally, dedicated product devices such as clickers must be phased out in favor of standard mobile devices.
• Adopt multiple and varied sales models — As content and services are unbundled and made part of a flexible suite, textbook publishers will discover a plethora of possible business/sales models. These include: 1) time subscription by individuals or institutions; 2) subject library subscriptions; 3) tool licensing; 4) assessment and integration services. Textbook publishers will want to create profit models around each of these (and others), and apply them to their different markets. Another attractive business feature of an independent digital assessment unit for Higher Education publishers is the ability to reduce marketing and sales costs via Web marketing and partnerships with other educational content/service providers.

Textbook publishers that adopt aggressive strategies around assessment (like the one I outline above), and who are willing to move beyond a textbook-centric model,  will see dramatic growth in their business. More importantly, the revenues generated from this business will be at much higher profit margins.