Specialist
Former C-level executive at Cengage Learning Holdings II Inc
Agenda
- Drivers of Cengage and McGraw-Hill terminating merger agreement and potential go-forward strategies
- Coronavirus pandemic implications for fall enrolment, digital sell-through rates and net revenue effect
- Competitive dynamics among Cengage, McGraw-Hill and Pearson
- Outlook for 2020 and beyond – digital author royalties, winners and losers
Questions
1.
Which trends or drivers do you think have been most impacting textbook publishers and the industry overall in recent months?
2.
Two quite key trends are the accelerated online penetration level and a more profound decline in enrolment. How are those finding a balance in the publisher model during this crisis environment? Are you judging it to be more of an upcoming tailwind or headwind for Cengage, McGraw and Pearson?
3.
You indicated a lift in sell-through rates for the humanities and social sciences. To what extent could sell- through rates improve in the immediate term? We discussed the pretty big gap with qualitative STEM [science, technology, engineering and mathematics] vs typical maths and quantitative science. Is the lift bridging the gap or are we talking 40% sell-through vs sub-20% or 20-30% previously, for example?
4.
Do you expect big differences for the fall vs spring semester enrolment, given there might be more schools that move back to face-to-face? Is January likely comparable to September or meaningfully improved?
5.
How are you thinking about age and demographic differences, the community college or international student and how all that impacts average revenue per student? I imagine that the 18-24-year-old students are most prone to pirate content or ultimately skip out on it. Is it right to think there might be a bit of stabilisation, if not growth, on the potential revenues from the average student as a publisher?
6.
Do you anticipate the landscape changing and becoming more dynamic for publishers, and potentially big market share shifts among the big three? If so, how might things evolve over the next few semesters or years?
7.
Do you foresee any sort of a paralysis effect on the sales team as a result of the termination of the Cengage and McGraw merger, given that we’re well into the sales cycle for the coming semester? Could Pearson gain any market share at the expense of the other two? Are OERs [open educational resources] making up a greater share, given the concessions to the student and seemingly weaker economic environment vs pre-coronavirus?
8.
Is there any way to differentiate between Cengage and McGraw, based on your projection? What are the most important things to consider? You made a point around platform strategy. How about the cultural side as we think about who might be more negatively impacted, given the stationary 9-12 months and both being back to square one?
9.
From your point, it’s Pearson, McGraw and Cengage in the platform level and how the culture piece ties in. How likely should we expect any improvements on MindTap, Connect or whatever else relates to why Pearson has been leading so much with its digital products or platforms? Are Cengage or McGraw well-positioned to have a virtual product? Could you outline the state of product innovation across the three?
10.
How are you assessing the Cengage Unlimited path ahead and if there needs to be a backtrack? 300,000 students have taken advantage of the free version since March 2020. Does that bolster its position for student adoption at all? What would be the key success factors if ultimately trying to make this work?
11.
Is pricing across products the biggest thing to consider? How much concession do the publishers ultimately have to give the institutions on average? Is that comparable across all three?
12.
How are you thinking about a best- or worst-case scenario for the fall semester publishing revenues? How are you expecting the landscape to shake out with winners vs losers, especially with the big three?
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