OER and the Future of Publishing imagined by Jose Ferriera, by David Wiley and by Michael Feldstein

Jose Ferriera, David Wiley and Michael Feldstein offer their different perspectives and opinions about free creative work and the future of the educational publishing industry.

Jose Ferriera, could free content at scale, distributed for free, break the textbook industry?
In a word: no.
“There are limitations to OER that offer the textbook industry ample room to add value in a post-OER world.
1)    Low production values
Publishers have advantages in creating content with high-production values.
there is plenty of space for publishers to add value on top of OER — if they are willing to focus on higher value-add content, instructional design, and services. Publishers who can’t beat OER deserve to go out of business. Those who have a strong vision of what OER will, and won’t, do will thrive in this new landscape.”

David Wiley, could free content at scale, distributed for free, break the textbook industry?
In a word: yes.
“I was the member of the panel Jose quoted as saying that ’80% of all general education courses taught in the US will transition to OER in the next 5 years,’ and I honestly believe that’s true. The combined forces of the innovator’s dilemma, the emergence of new, Red Hat-like organizations supporting the ecosystem around OER, the learning outcomes per dollar metric, and the growing national frustration over the cost of higher education all seem to point clearly in this direction.”

Michael Feldstein, could free content at scale, distributed for free, break the textbook industry?
In a word: “it depends”
“All of this analysis assumes that in David’s ratio of standard deviations per dollar, all that matters is the ratio itself, independently of the individual numbers that make it up. But that cannot be uniformly true. Some students cannot afford educational resources above a certain price no matter how effective they are. (I would love to lower my carbon footprint by buying a Tesla. Alas….) In other cases, getting the most effective educational resources possible is most important and the extra money is not a big issue. This comes down to not only how much the students themselves can afford to pay but also how education is funded and subsidized in general. So there are complex issues in play here regarding “value.” But on the first-order question of whether OER can “break the textbook industry,” my answer is, “it depends.” ”

 


 

OER and the Future of Publishing

Jose Ferreira Blog

 

 

 

 

A Response to ‘OER and the Future of Publishing’

I recently had the wonderful opportunity to participate on a panel about OER at the Knewton Education Symposium. Earlier this week, Knewton CEO Jose Ferreira blogged about ‘OER and the Future of Publishing’ for EdSurge, briefly mentioning the panel. I was surprised by his post, which goes out of its way to reassure publishers that OER will not break the textbook industry.

Much of the article is spent criticizing the low production values, lack of instructional design, and missing support that often characterize OER. The article argues that there is a potential role for publishers to play in each of these service categories, leveraging OER to lower their costs and improve their products. But it’s been over 15 years since the first openly licensed educational materials were published, and major publishers have yet to publish a single textbook based on pre-existing OER. Why?

Exclusivity, Publishing, and OER

The primary reason is that publishers are – quite rationally – committed to the business models that made them incredibly successful businesses. And the core of that model is exclusivity – the contractual right to be the only entity that can offer the print or digital manifestation of Professor Y’s expertise on subject X. Exclusivity is the foundation bedrock of the publishing industry, and no publisher will ever meaningfully invest in building up the reputation and brand of a body of work which is openly licensed. Publisher B would simply sit on the sidelines while Publisher A exhausts its marketing budget persuading the world that it’s version of Professor Y’s open materials are the best in their field. Once Professor Y’s brand is firmly associated with high quality, Publisher B will release it’s own version of Professor Y’s open materials, free-riding on Publisher A’s marketing spend. Publisher A’s marketing efforts actually end up promoting Publisher B’s competing product in a very real way. No, publishers will never put OER at the core of their offerings, because open licensing – guaranteed nonexclusivity – is the antithesis of their entire industrial model. Some playing around in the supplementals market is the closest major publishers will ever come to engaging with OER.

New Models Enabled by OER

However, we are seeing the emergence of a new kind of organization, which is neither invested in preserving existing business models nor burdened with the huge content creation, distribution, and sales infrastructure that a large commercial publisher must support. (This sizable infrastructure, that once represented an insurmountable barrier to entry, is quickly becoming a millstone around the neck of big publishers facing the threat of OER.) The new breed of organization is only too happy to take the role of IBM or Red Hat and provide all the services necessary to make OER a viable alternative to commercial offerings. I had to chuckle a little reading the advice to publishers Jose provides in his post, because that list of services could almost have been copied and pasted my company’s website (Lumen Learning): iterative cycles of instructional design informed by data, integration services, faculty support, etc. I agree wholeheartedly that these are the kinds of services that must be offered to make OER a true competitor to commercial textbooks in the market – but I disagree with the idea that publishers will ever be willing to offer them. That realization is part of what led me to quit a tenured faculty job in a prestigious graduate program to co-found Lumen Learning.

All that said, the emergence of these organizations won’t spell the end of large textbook publishers as we know them. Instead, that distinction will go to the simplest possible metric by which we could measure the impact of the educational materials US students spend billions of dollars per year on: learning outcomes per dollar.

Learning Outcomes per Dollar

No educator would ever consciously make a choice that harmed student learning in order to save money. But what if you could save students significant amounts of money without doing them any academic harm? Going further, what if you could simultaneously save them significant money and improve their learning outcomes? Research on OER is showing, time and again, that this latter scenario is entirely possible. One brief example will demonstrate the point.

A recent article published in Educause Review describes Mercy College’s recent change from a popular math textbook and online practice system bundle provided by a major publisher (~$180 per student), to OER and an open source online practice system. Here are some of the results they reported after a successful pilot semester using OER in 6 sections of basic math:

  • At pilot’s end, Mercy’s Mathematics Department chair announced that, starting in fall 2012, all 27 sections (695 students) in basic mathematics would use [OER].
  • Between spring 2011 [no sections using OER] and fall 2012 [all sections using OER], the math pass rate increased from 48.40 percent to 68.90 percent.
  • Algebra courses dropped their previously used licenses and costly math textbooks and resources, saving students a total of $125,000 the first year.

By switching all sections of basic math to OER, Mercy College saved its students $125,000 in one year and changed their pass rate from 48 to 69 percent – a 44% improvement.

If you read the article carefully, you’ll see that Mercy actually received a fair amount of support in their implementation of OER, which was funded through a grant. So let’s be honest and put the full cost-related details on the table. Mercy (and many other schools) are still receiving the support they previously received for free through their participation in the Kaleidoscope Open Course Initiative. Lumen Learning, whose personnel led the KOCI, now provides those same services to Mercy and other schools for $5 per enrollment.

So let’s do the learning outcomes per dollar math:

  • Popular commercial offering: 48.4% students passing / $180 textbook and online system cost per student = 0.27% students passing per required textbook dollar
  • OER offering: 68.9% students passing / $5 textbook and online system cost per student = 13.78% students passing per required textbook dollar

For the number I call the “OER Impact Factor,” we simply divide these two ratios with OER on top:

  • 13.78% students passing per required textbook dollar / 0.27% students passing per required textbook dollar = 51.03

This basic computation shows that, in Mercy’s basic math example, using OER led to an over 50x increase (i.e., a 5000% improvement) in percentage passing per dollar. No matter how you look at it, that’s a radical improvement.

If similar performance data were available for two construction companies, and a state procurement officer awarded a contract to the vendor that produces demonstrably worse results while costing significantly more, that person would lose his job, if not worse. (As an aside, I’m not aware of any source where a taxpayer can find out what percentage of federal financial aid (for higher ed) or their state public education budget (for K-12) is spent on textbooks, making it impossible to even begin asking these kinds of questions at any scale.) While faculty and departments aren’t subject to exactly the same accountability pressures as state procurement officers, how long can they continue choosing commercial textbook options over OER as this body of research grows?

#winning

Jose ends his post by saying “Publishers who can’t beat OER deserve to go out of business,” and he’s absolutely right. But in this context, “beat” means something very different for OER than it does for publishers. For OER, “beat” means being selected by faculty or departments as the only required textbook listed on the syllabus (I call this a “displacing adoption”). Without a displacing adoption – that is, if OER are adopted in addition to required publisher materials – students may experience an improvement in learning outcomes but will definitely not see a decrease in the price of going to college. Hence, OER “beat” publishers only in the case of a displacing adoption. For publishers, the bar is much lower – to “beat” OER, publishers simply need to remain on the syllabus under the “required” heading.

How are OER supposed to clear this higher bar, particularly given the head start publishers have? OER have only recently started to catch up with publishers in many of the areas where publishers have enjoyed historical advantages, like packaging and distribution (c.f. the amazing work being done by OpenStax, BCCampus OpenEd, Lumen Learning, and others). But OER have been beating publishers on price and learning outcomes for several years now, and proponents of OER would be wise to keep the conversation laser-focused on these two selection criteria. In a fortunate coincidence for us, I believe these are the two criteria that matter most.

OER offerings are always going to win on price – no publisher is ever going to offer their content, hosting platform, analytics, and faculty-facing services in the same zip code as $5 per student. (And when we see the emergence of completely adaptive offerings based on OER – which we will – even if they are more expensive than $5 per student they will still be significantly less expensive than publishers’ adaptive offerings.) Even if OER only manage to produce the same learning results as commercial textbooks (a “no significant difference” research result), they still win on price. “How would you feel about getting the same outcomes for 95% off?” All OER have to do is not produce worse learning results than commercial offerings.

So the best hope for publishers is in creating offerings that genuinely promote significantly better learning outcomes. (I can’t describe how happy I am to have typed that last sentence.) The best opportunity for publishers to soundly defeat OER is through offerings that result in learning outcomes so superior to OER that their increased price is justified. Would you switch from a $5 offering that resulted in a 65% passing rate to a $100 offering that resulted in a 67% passing rate? Would you switch to a $225 offering that resulted in a 70% passing rate? There is obviously some performance threshold at which a rational actor would choose to pay 20 or 40 times more, but it’s not immediately apparent to me where it is.

However, if OER can beat publishers on both price and learning outcomes, as we’re seeing them do, then OER deserve to be selected by faculty and departments over traditional commercial offerings in displacing adoptions.

I was the member of the panel Jose quoted as saying that ’80% of all general education courses taught in the US will transition to OER in the next 5 years,’ and I honestly believe that’s true. The combined forces of the innovator’s dilemma, the emergence of new, Red Hat-like organizations supporting the ecosystem around OER, the learning outcomes per dollar metric, and the growing national frustration over the cost of higher education all seem to point clearly in this direction.

 

 

 

OER and the Future of Knewton

Jose Ferriera, the CEO of Knewton, recently published a piece on edSurge arguing that scaling OER cannot “break the textbook industry” because, according to him, it has low production values, no instructional design, and is not enterprise grade. Unsurprisingly, David Wiley disagrees. I also disagree, but for somewhat different reasons than David’s.

When talking about Open Educational Resources or, for that matter, open source software, it is important to distinguish between license and sustainability model, as well as distinguishing between current sustainability models and possible sustainability models. It all starts with a license. Specifically, it starts with a copyright license. Whether we are talking about Creative Commons or GPL, an open license grants copyright permission to anyone who wants it, provided that the people who want to reuse the content are willing to abide by the terms of the license. By granting blanket permission, the copyright owner of the resource chooses to give up certain (theoretical) revenue earning potential. If the resource is available for free, then why would you pay for it?

This raises a question for any resource that needs to be maintained and improved over time about how it will be supported. In the early days of open source, projects were typically supported through individual volunteers or small collections of volunteers, which limited the kinds and size of open source software projects that could be created. This is also largely the state of OER today. Much of it is built by volunteers. Sometimes it is grant funded, but there typically is not grant money to maintain and update it. Under these circumstances, if the project is of the type that can be adequately well maintained through committed volunteer efforts, then it can survive and potentially thrive. If not, then it will languish and potentially die.

But open resources don’t have to be supported through volunteerism. It is possible to build revenue models that can pay for their upkeep. For example, it is possible to charge for uses of materials other than those permitted by the open license. Khan Academy releases their videos under a Creative Commons Noncommercial Share-Alike (CC NC-SA) license. Everyday students and teachers can use it for free under normal classroom circumstances. But if a textbook publisher wants to bundle that content with copyrighted material and sell it for a fee, the license does not give them permission to do so. Khan Academy can (and, as far as I know, does) charge for commercial reuse of the content.

Another possibility is to sell services related to the content.

In open source software, this is typically in the form of support and maintenance services. For education content, it might be access to testing or analytics software, or curriculum planning and implementation services. This is a non-exhaustive list. The point is that it is possible to generate revenue from open content. And revenue can pay for resources to support high production values, instructional design, and enterprise scaling, particularly when paired with grant funding and volunteer efforts. These other options don’t necessarily generate as much revenue as traditional copyright-based licensing, but that’s often a moot point. Business models based on open licenses generally get traction when the market for licensed product is beginning to commodify, meaning that companies are beginning to lose their ability to charge high prices for their copyrighted materials anyway.

That’s the revenue side. It’s also important to consider the cost side. On the one hand, the degree to which educational content needs high production values and “enterprise scaling” is arguable. Going back to Khan Academy for a moment, Sal Khan popularized the understanding that one need not have an expensive three-camera professional studio production to create educational videos that have reach and impact. That’s just one of the better known of many examples of OER that is considered high-quality even though it doesn’t have what publishing professionals traditionally have thought of as “high production values.” On the other hand, it is important to recognize that a big portion of textbook revenues go into sales and marketing, and for good reason. Despite multiple efforts by multiple parties to create portals through which faculty and students can find good educational resources, the adoption process in higher education remains badly broken. So far with a few exceptions, the only good way to get widespread adoption of curricular materials still seems to be to hire an army of sales reps to go knock on faculty doors. It is unclear when or how this will change.

This brings us to the hard truth of why the question of whether OER can “win” is harder than it seems. Neither the OER advocates nor the textbook publishers have a working economic model right now. The textbook publishers were very successful for many years but have grown unsustainable cost structures which they can no longer prop up through appeals to high production values and enterprise support. But the OER advocates have not yet cracked the sales and marketing nut or proven out revenue models that enable them to do what is necessary to drive adoption at scale. If everybody is losing, then nobody is winning. At least at the moment.

This is where Knewton enters the picture. As you read Jose’s perspective, it is important to keep in mind that his company has a dog in this fight. (To be fair at the risk of stating the obvious, so does David’s.) While Knewton is making noises about releasing a product that will enable end users to create adaptive content with any materials (including, presumably, OER), their current revenues come from textbook publishers and other educational content companies. Further, adaptive capabilities such as the ones Knewton offers add to the cost of an educational content product, both directly through the fees that the company charges and indirectly through the additional effort required to design, produce, and maintain adaptive products. To me, the most compelling argument David makes in favor of OER “winning” is that it is much easier to lower the price of educational materials than it is to increase their efficacy. So if you’re measuring the value of the product by standard deviations per dollar, then smart thing is to aim for the denominator (while hopefully not totally ignoring the numerator). The weak link in this argument is that it works best in a relatively rational and low-friction market that limits the need for non-product-development-related expenses such as sales and marketing. In other words, it works best in the antithesis of the conditions that exist today. Knewton, on the other hand, needs there to be enough revenue for curricular materials to pay for the direct and indirect costs of their platform. This is not necessarily a bad thing for education if Knewton-enhanced products can actually raise the numerator as much as or more than OER advocates can lower the denominator. But their perspective—both in terms of how they think about the question of value in curricular materials and in terms of how they need to build a business capable of paying back $105 million in venture capital investment—tilts toward higher costs that one hopes would result in commensurately higher value.

All of this analysis assumes that in David’s ratio of standard deviations per dollar, all that matters is the ratio itself, independently of the individual numbers that make it up. But that cannot be uniformly true. Some students cannot afford educational resources above a certain price no matter how effective they are. (I would love to lower my carbon footprint by buying a Tesla. Alas….) In other cases, getting the most effective educational resources possible is most important and the extra money is not a big issue. This comes down to not only how much the students themselves can afford to pay but also how education is funded and subsidized in general. So there are complex issues in play here regarding “value.” But on the first-order question of whether OER can “break the textbook industry,” my answer is, “it depends.”

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: