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© 2003 - LCX Corporation - Proprietary and Confidential Information Managing the Growing Demand for Digital Learning Content If You Give A Student A Computer:

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Presentation on theme: "© 2003 - LCX Corporation - Proprietary and Confidential Information Managing the Growing Demand for Digital Learning Content If You Give A Student A Computer:"— Presentation transcript:

1 © LCX Corporation - Proprietary and Confidential Information Managing the Growing Demand for Digital Learning Content If You Give A Student A Computer: Patrick McElroy Founder Learning Content eXchange, Inc.

2 © LCX Corporation - Proprietary and Confidential Information Copyright [Learning Content eXchange, Inc This work is the intellectual property of Learning Content eXchange, Inc. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.

3 © LCX Corporation - Proprietary and Confidential Information The 30,000 Ft. Perspective “In the Knowledge Economy, those individuals and enterprises that share and process their knowledge effectively will have a great advantage” Transforming e-Knowledge Norris, Mason & Lefrere 2003

4 © LCX Corporation - Proprietary and Confidential Information The e-Knowledge Transformation: Key Indicators Internet technologies, interoperability standards, and emerging e-knowledge repositories and marketplaces Enterprise infrastructures, processes and knowledge cultures, and …reinvention of best practices, business models and strategies for e-knowledge. Source: Transforming e-Knowledge - Norris, Mason & Lefrere

5 © LCX Corporation - Proprietary and Confidential Information Has Something Changed? The Enterprise Existing Competitors ComplementorsCustomers Suppliers Potential Competitors Possibility that your business can be done in another way Source: Only the Paranoid Survive Andrew Grove The Disruptive Force of Change 10X Force

6 © LCX Corporation - Proprietary and Confidential Information The Strategic Inflection Point Time Enterprise goes to new heights Adapted From: Only the Paranoid Survive Andrew Grove The Power of Disruptive Change Something HAS Changed! The Strategic Inflection Point Enterprise Declines Enterprise Success

7 © LCX Corporation - Proprietary and Confidential Information Disruptive Change: Examples The Transcontinental Railroad – 1870 The Computer Industry – Digital Entertainment Business – ?? Academic Publishing - ??? E-Learning Industry – ???

8 © LCX Corporation - Proprietary and Confidential Information E-Learning Market – Going Horizontal

9 © LCX Corporation - Proprietary and Confidential Information A 20,000 Ft. Perspective: A Challenging Digital World Old strategies and business models don’t work Those vested in the old business models don’t want to change The consumer is king in the digital world – enabled by powerful technologies

10 © LCX Corporation - Proprietary and Confidential Information Going Digital in Higher Education - Working Definitions Digital Learning Resources – All digitally-based materials that impact the academic mission of the institution (instruction and research) Learning Content Management (LCM) All of the technology, business process and institutional cultural issues related to finding, acquiring, organizing and distributing digital learning resources to institutional constituencies

11 © LCX Corporation - Proprietary and Confidential Information Types of Digital Resources Digitalized Text Linear Video Audio Digital Images Software tools Simulations On-line Testing Online Research Resources Tutorials Animations Interactive Video Instructional Modules Full Online Courses Tutorial Services Dynamic Learning Modules

12 © LCX Corporation - Proprietary and Confidential Information We Have To Live With Copyright Protection in The Digital World TYPES: Public Domain Fair Use Institutionally Marketed Commercial Requires Controlled Distribution ?

13 © LCX Corporation - Proprietary and Confidential Information Learning Content Management Objectives and Requirements Protect rights of copyright owners Provide tools for users to locate, acquire and use content Store Find License Package Enable economic exchange –Buy, share and sell Distribute –Securely and persistently –Tracked and documented Objectives Requirements

14 © LCX Corporation - Proprietary and Confidential Information Today’s Higher Ed Environment Restricted resources Increasing competition A tech-savvy generation of faculty Established localized practices and procedures Persistent cultural realities Pressures of the digital revolution

15 © LCX Corporation - Proprietary and Confidential Information Academic Technology Is: Growing rapidly as a component of the instructional process –Instructional integration still key IT issue over the next 2-3 years –Half of all courses use internet-based resources (vs. 10% in 1995) –One third of all courses have a web page (vs. 10% in 1996) Under significant budget pressure –Public institutions experiencing academic computing budget cuts 55% of public universities 43% of public four year colleges 37% of community colleges Source: Campus Computing 2002 – Kenneth C. Green – The Campus Computing Project

16 © LCX Corporation - Proprietary and Confidential Information If you give a student a computer…. Digital resources will be a competitive imperative –Distance learning applications –Hybrid course materials –Complementary support of traditional programs –Digital core collections Today’s year old student expects a digitally sophisticated environment Mature non-traditional students expect the flexibility offered by technology solutions The Pandora's box of the digital world has been opened

17 © LCX Corporation - Proprietary and Confidential Information What doesn’t change in the digital world? Some realities of the academic world –Faculty play the primary/exclusive role of selecting appropriate learning resources for their students –Unique institutional cultures and processes will be very difficult if not impossible to change –Discipline communities play key role in organizing their faculty constituencies The challenges faced by publishers –Find customers –Get paid for their products –Defend their brand –Have their products securely distributed

18 © LCX Corporation - Proprietary and Confidential Information Digital Resource Management in Higher Education – Where Are We? Very few institutions have developed effective, comprehensive internal systems –Libraries lead the pack – 76% offer online reference resources (Green 2002) –Selected research universities have made some inroads No systems or mechanisms exist to address broad inter-institutional connectivity Producers have the power in the market Standards and technologies exist to do things differently

19 © LCX Corporation - Proprietary and Confidential Information DRM at a Crossroads Business as usual (the “Reactive” approach) –Incrementally respond as problems grow –Use today’s systems and processes to handle tomorrow’s problems - OR- Anticipate and collaborate (the “Proactive” approach) –Anticipate tomorrow’s realities today –Meet common needs through shared resources Institutions can choose from two paths:

20 © LCX Corporation - Proprietary and Confidential Information If You Give A Student a Computer… Commercial Publishers Other Institutions Other Repositories Academic Department ERP Systems Budget Finance Student Finance Institutional Repositories Publishers’ Repositories Students Faculty Business Office Negotiation Management Legal Review Campus Technology Infrastructure

21 © LCX Corporation - Proprietary and Confidential Information “Hard” Costs of Reactive Approach Part 1 – Content Acquisition Purchasing –Contracts negotiation and management - in the hundreds Legal –Contract legal review and negotiation – in the hundreds ERP – connecting to the publishing world –Student system – student/faculty authentication and role confirmation –Student finance system – student purchase accounts –Institutional finance system – publisher access –Human resource system - faculty/staff authentication

22 © LCX Corporation - Proprietary and Confidential Information “Hard” Costs of Reactive Approach Part 2 – Content Sales/Marketing Legal –Institution/faculty IP negotiation and management –Rights tracking –Publisher contract development and negotiation Business office/foundation –Marketing content to publishers –Developing direct business models/infrastructures –Contract development and negotiation –Royalty tracking and distribution

23 © LCX Corporation - Proprietary and Confidential Information “Hard” Costs of Reactive Approach Part 3 – Secure Distribution Digital Resource Intranet –Development –Integration Internal systems Hundreds of publisher repositories –Content Sharing Integration with other institutional systems Legal Exposure –Improper digital resource distribution –Publisher info access to student and staff data

24 © LCX Corporation - Proprietary and Confidential Information “Soft” Costs of Reactive Approach Faculty will find it very difficult to assemble quality content for their students Significant staff and administrative time commitments to discuss, plan and react to a rapid increase in demand for digital resources High institutional and student costs for digital resources – due in part to high publisher costs A high threshold for marketing internally developed materials

25 © LCX Corporation - Proprietary and Confidential Information The Reactive Reality It will take a long time – and demand will outpace the institution's ability to react It will be VERY expensive There will be no broad-based institutional interoperability Academic publishers will continue to control the market It will be difficult to publish institutional content

26 © LCX Corporation - Proprietary and Confidential Information The Proactive Opportunity IF WE: –Agree on the inevitability of the need for effective digital resource management –Understand that institutions have similar needs –Know what resources we need (general requirements) –Appreciate the opportunities for a shared approach to the problem THEN: –Why not consider a collaborative approach?

27 © LCX Corporation - Proprietary and Confidential Information “Collaborating…is the only means of competitive survival” Brian Hawkins President – EDUCAUSE League CIT Conference Keynote November 2002

28 © LCX Corporation - Proprietary and Confidential Information The Collaborative Opportunity: Laying the “Tracks” –Creating the enabling infrastructure –Developing shared business models –Developing shared legal frameworks –Establishing common distribution systems Running the “Trains” –Participate in a digital resource marketplace –Exercise collective purchase power

29 © LCX Corporation - Proprietary and Confidential Information Laying the Tracks: The Six Functions of a “Shared Resource Utility” 1.Find/evaluate content 2.License content (institution and students) 3.Purchase content 4.Securely distribute licensed content 5.Sell or share institutionally owned content 6.Provide publishers with access to faculty and students

30 © LCX Corporation - Proprietary and Confidential Information Integrating the Shared Resource Utility E-Learning Infrastructure/Tools/Resources Storage and Computing Network Connectivity Tools and Resources (Databases, LCMS. E-Commerce) Applications Provider Matching core infrastructure resources with needs of the market Institutional Constituencies Faculty, Staff, Students Institutional Systems and Processes ERP, CMS, Business Processes

31 © LCX Corporation - Proprietary and Confidential Information Shared Web Service Applications: Let the Systems Manage the Process Web Services Resources Inter- Institutional Connectivity Publisher Connectivity Infrastructure Resources Institutional Constituencies

32 © LCX Corporation - Proprietary and Confidential Information Benefits of the Shared Resource Utility 10X lower “hard” costs –One time costs –Ongoing operational costs Lower “soft” costs Faster timeline More functionality –More robust internal applications capability –Connectivity with other institutions

33 © LCX Corporation - Proprietary and Confidential Information The Marketplace Opportunity: The Disruptive Power of Digital Markets The Napster Phenomenon Academic Journal Publication Textbook Publishing Digitalized movies

34 © LCX Corporation - Proprietary and Confidential Information Digital Content Economic Exchange Issues Royalty payment Royalty tracking Pricing/business models Neutrality of services Demand aggregation

35 © LCX Corporation - Proprietary and Confidential Information The Market-Maker Function All effective markets require a market maker –Supermarkets –NASDAQ –E-bay Digital market maker requirements –Deep market understanding –Represent interests of consumers and producers –Open standards-based –Technology- & publisher-neutral

36 © LCX Corporation - Proprietary and Confidential Information Higher Education Digital Resource Market Models Digital Bookstore –Content purchased by student at direction of faculty –Content purchased by student to support individual learning needs Digital Library –Core digital collections –Shared (with other institutions) and purchased content –Accessible to all students and faculty Digital Reserve stacks –Available to limited student/faculty populations

37 © LCX Corporation - Proprietary and Confidential Information “Value Net” Reference Markets Textbook Market Long Distance Telephone Market Publisher Telephony Infrastructure Distribution Tracking & Billing Bookstore Marketing & Sales 50% 25%

38 © LCX Corporation - Proprietary and Confidential Information Who Has The Power? Today’s producer-centric distribution empowers the publisher –Many isolated buyers –High “push” marketing costs –The “journal flip” Publishers benefit from a consumer-centric distribution mechanism –Large buying communities increase volume potential –Common contractual mechanisms reduce cost –Lower “pull” marketing costs improve profitability

39 © LCX Corporation - Proprietary and Confidential Information Sooooo……… If You Give a Student a Computer… Buying and managing large quantities of digital resources is inevitable You will “do it” or it will “do you” “Business as usual” won’t cut it – too expensive and deals with only internal issues You’ll have to have both an enabling infrastructure and access to an effective market mechanism Collaboration makes sense It’s all about empowerment!


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