Education’s ongoing shift toward digital content and learning experiences has pushed entrenched textbook publishers to try to reinvent themselves as software companies.
Boston-based Cengage Learning, one of those industry stalwarts, seems to be making progress on that transformation. CEO Michael Hansen projects that digital products will make up the majority of Cengage’s revenue within two years. The company generated over $1.6 billion in sales in its most recent fiscal year.
“I think we are very well on our way to really turning the company from a traditional textbook publisher to an edtech company,” Hansen says. “We’re aggressively cannibalizing that textbook revenue to drive digital” product adoption in the classroom, he adds.
Cengage, formerly Thomson Learning, went through a private equity buyout in 2007, then filed for bankruptcy protection in 2013 in order to shave off $4 billion in debt and restructure the company. Other big textbook publishers also reorganized amid waning print book sales.
Since emerging from bankruptcy, Cengage has doubled down on digital products and services via investing in and acquiring edtech companies, as well as developing its own software in-house. Its overarching goals have been to adapt to “the digital transformation of the classroom,” Hansen says, and to focus on the needs of students. The publishing industry has traditionally seen faculty and schools as its primary customers, and the student has been the “forgotten constituent,” he says.
Cengage today announced the latest and most prominent demonstration of its new mindset, Hansen says. MindTap Math Foundations is a new software product that aims to help college freshmen taking remedial math courses by providing them with interactive content and collaboration tools accessible on computers and mobile devices.
Lack of college readiness is a widespread and expensive problem. More than 1 million college freshmen in the U.S. take remedial courses each year, which costs the education system more than $1 billion, according to estimates provided by Cengage. Many of those students end up failing their remedial courses, getting frustrated, and dropping out of school, Hansen says.
The remedial math software started as an idea on a Cengage whiteboard about a year and a half ago, Hansen says. After that, the company took a page out of the tech-startup playbook: It went out and talked with potential customers—more than 1,000 students—to get feedback on its ideas and incorporate them into MindTap Math Foundations. (Cengage says it got input from more than 1,000 instructors, too.)
“In some other areas we are changing and adjusting the [existing] product in order to implement the philosophy that I talked about,” Hansen says. “In this case, we started truly from scratch. We believed every product on the market, including our own, was not meeting the student need.”
In Cengage’s conversations with students, one of the oft-cited barriers to success was time management. Many of the remedial math product’s target users are juggling jobs and family commitments, and it can be difficult to carve out four-hour blocks in which to learn the material, Hansen says. “They need to figure out how to squeeze in the learning into a busy day,” he says.
That’s why Cengage integrated a feature it calls “learning bursts,” which are designed to teach new skills in 15-minute shots of work. (Like other forms of digital media, online education seems to be moving toward bite-size chunks of content.) Other elements of the product include interactive video lessons, games that build problem-solving and critical-thinking skills, chat tools, and a virtual whiteboard that allows students and teachers to collaborate remotely.
For instructors, the product should make it easier to manage course materials, personalize assignments, and identify students who are struggling and need additional attention, Cengage says.
Cengage will pilot test the product at more than 180 schools this spring, before rolling it out more widely in the fall. The company is considering creating more remedial education products, potentially for English courses, Hansen says.
This product “really is culminating a journey that started three and a half years ago when we went into bankruptcy with the old textbook business model,” he says. “Since then we have emerged, and we are very proud and excited about this particular product.”
