A Very Solid Business

Between media companies looking to schools for new revenue streams and charter schools as investment opportunities, I think I’m in the wrong end of the education sector.

Charter schools, as you might remember, were supposed to be innovative alternatives to “traditional” schools, funded with public money and often serving poorer communities.

However, according to something called Entertainment Properties Trust, they might also be a nice addition to your investment portfolio.

What is Entertainment Properties Trust? According to its website, it is “a specialty real estate investment trust (REIT) that invests in properties in select categories which require unique industry knowledge, and offer stable and attractive returns.”

And the website also says this: “Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments. This portfolio includes over 160 locations spread across 34 states with over 200 tenants.”

The video interview with the CEO embedded in the Answer Sheet post is quite strange, although not especially unsurprising given the concerted effort of politicians to sell off as many public resources as possible to the highest bidder.

I especially enjoyed this little piece of analysis.

Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product. There’s 400,000 kids on waiting lists for charter schools … the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer on this, uh, category, and uh, if you do business with states with solid treasuries. then it’s a very solid business.

Pick companies in the right states, the ones willing to divert lots of public money into charters, and you have a winning investment.

What we don’t get from the charter industry, and most independent charters as well, is a better education for the money spent, one of the claims often heard from their political advocates.

Missing the Revolution

In a post this morning Will pointed me to a USA Today article that claims Khan Academy is sparking a “global tech revolution in education”. This rant is probably only an amplification of one of the great points he makes but it’s worth repeating.

Actually, there is so much wrong in this breathless, fawning collection of misguided claims that it’s hard to know where to start.  But this statement (one that Will also quotes) is an excellent summation of everything the USA Today writer gets wrong.

“Technology is doing to education what it’s done to countless other industries: disrupting it,” Hu says. “Where education once was static, bound to a textbook, now it’s moving to a global, interdisciplinary model.”

The speaker is the head of head of education technology and services for Goldman Sachs so naturally he sees school as just another “industry”.

However, what Hu totally misses is that, while the education business is certainly working hard to automate the dispensing of knowledge (or at least academic credentials), understanding and using that knowledge is a much more difficult, more personal and hands-on process.

Having students watch a video explaining some bit of information or how to execute a specific process is still static and very much bound to a textbook. Except that instead of the book carrying only text and still pictures to be read and viewed, it now has audio and video. The effect is the same, a one-way transfer of material with no opportunity for a student to interact.

There’s absolutely nothing revolutionary about the Khan Academy materials. There’s nothing revolutionary in using technology to deliver the same old classroom lectures in “bite-size and conversational” pieces with no faces.

Finally, Hu goes on to say that Khan’s success is the “best thing that can happen to this space” (another business investment term) and that the space “needs more smart people who care”.

Will is also exactly correct to call that last part total BS.

Is That The Only Option?

This past weekend, the New York Times posted a very long but interesting look at the growing debt being accumulated by recent college graduates, as well as those who dropout. It’s a good overview that touches on some of the major problems, including deceptive advertising (aka recruiting) and the somewhat shady for-profit college industry.

However, I was struck by a comment made by one member of the state House of Representatives in Ohio, who also happens to be a current college student with lots of loans: “students need to understand that attending college is not an entitlement”.

Maybe not. But if you look at it through the eyes of most high school students and their parents, we’ve made college attendance something of a societal inevitability.

First you have politicians from the president on down setting increased college attendance and graduation as vital to rebuilding the nation’s economic structure. It’s a matter of world competition! The Obama administration has established a goal to make the United States “first among developed nations in college completion”. Even many of those legislators voting to cut support to both students and schools also support the same argument.

Then there is the culture and structure of our K12 schools where, at least in this area, the message is drilled into the kids almost from the first day of Kindergarten that the only goal worth pursuing after graduation is college. Almost everyone gets funneled into a “college prep” schedule with no consideration for any other post-high school path, and certainly little for the interests and needs of the individual.

So, what’s the choice? Skip college and miss getting that “good job” (not to mention being considered a “failure” by the popular culture) or go and be saddled with a huge debt, even if you “settle” for a state school.

If we as a society really believe that a college degree is something that will benefit both the country in the long run and almost every high school graduate, then we have an obligation to cover the fundamental costs. You cannot reconcile a societal norm of every kid going to college while slashing the support to make that happen. 

Of course, as with everything else we think is important, that’s going to take money. Not to mention some major restructuring in the way that colleges and universities do business (and higher education is very much a business), starting with separating out the stuff that has little to do with getting a good education (high profile athletic programs that are little more than pro farm teams leap to mind first).

But if “college for all” is just political talk, if our “leaders” are not willing to make some hard budget choices to make it happen, then let’s stop feeding that illusion to our kids. Instead, provide students with multiple options and help them find other, less expensive and possibly more satisfying, avenues to follow after high school graduation.

Actually, that second option is a excellent one anyway.

The End of Publishing

Scott pointed me to an interesting interview with Clay Shirky, part of a series of posts called How We Will Read, in which he discusses the future of publishing.

I love the same section Scott highlighted in which Shirky responds to the question of how publishing is changing.

Publishing is not evolving. Publishing is going away. Because the word “publishing” means a cadre of professionals who are taking on the incredible difficulty and complexity and expense of making something public. That’s not a job anymore. That’s a button. There’s a button that says “publish,” and when you press it, it’s done.

In ye olden times of 1997, it was difficult and expensive to make things public, and it was easy and cheap to keep things private. Privacy was the default setting. We had a class of people called publishers because it took special professional skill to make words and images visible to the public. Now it doesn’t take professional skills. It doesn’t take any skills. It takes a WordPress install. [emphasis mine]

However, Shirky also has something to say about the business of digital publishing that directly reflects the textbook industry to which we in public education are so wedded.

The original promise of the e-book was not a promise to the reader, it was a promise to the publisher: “We will design something that appears on a screen, but it will be as inconvenient as if it were a physical object.” This is the promise of the portable document format, where data goes to die, as well.

Institutions will try to preserve the problem for which they are the solution. Now publishers are in the business not of overcoming scarcity but of manufacturing demand. And that means that almost all innovation in creation, consumption, distribution and use of text is coming from outside the traditional publishing industry.

So far, the digital textbooks I’ve seen from the major publishers – and certainly those our overly-large school district has adopted – fit that description of inconvenience, scarcity, and lacking innovation.

Anyway, Shirky’s larger message about “social reading” is much more interesting. Go read the whole thing.

The Possibilities of Digital Textbooks

Digital textbooks are all the rage these days.

They’ll save schools billions of dollars, and relieve kids from the burden of carrying around the paper versions. More than a few education “experts” have applied the “revolutionary” tag to the concept.

And on that very subject, the US Department of Education and the Federal Communications Commission this week held a big meeting just up the road in Washington on that very subject, with the purpose to determine how the US can “move all K-12 schools to interactive digital textbooks in the next five years”.

So, who attended these high level discussions?

FCC Chairman Genachowski and Secretary of Education Duncan hosted a discussion with CEOs, senior executives, and other leaders from the education technology ecosystem to develop ways the industry and states can meet their challenge to move all K-12 schools to interactive digital textbooks in the next five years.

Representatives included senior executives and leaders from Apple, Aruba Networks, Chegg, Discovery Education, Idaho Department of Education, Houghton Mifflin Harcourt, Inkling, Intel, Knewton, Kno, the LEAD Commission, McGraw-Hill, News Corp, Pearson, Samsung, Sprint, and T-Mobile. [emphasis mine]

Education technology ecosystem?

Anyway, with the exception of the participants from Idaho (a known leader of instructional technology innovation, right?), do you see any actual educators in that list? Or any organizations representing the various educational open source initiatives?

No, what you see are the very large companies that already control the printed textbook business, some major tech companies, plus a few tech startups with interests in digital distribution. All of which stand to reap large profits from controlling the digital textbook business.

That’s what Duncan, Apple, Pearson and others really mean when they talk about the “possibilities” of digital textbooks.