Several years ago, I asked the executive of a major educational publishing company if he ever thought that his company would acquire A Pass Educational Group. He responded, “So, let me think about this for a second. You are asking if I would ever take a cost that is currently a variable cost and make it a fixed cost?” Shyly, I responded, “I guess you wouldn’t do that?” He said, “Nope.”
Major educational publishers really get it. They don’t create very much of their own content. Instead, they sub out the creation. What they do effectively is make money. They own intellectual property and have channels for re-selling this property. This means that they must understand what intellectual property will sell successfully. But, of course, as my friend suggested, they do not have sufficient resources in-house to initially develop this content.
This is especially true when considering the fact that the same human resource cannot equally create all kinds of content equally. For example, a company that has always specialized in mathematics may decide to see what happens when it develops social studies content. While the math company has successful sales channels into schools, it does not have the resources for developing social studies content. A company that provides online courses may decide to develop a phlebotomy course. Consider the insane use of resources that it would require to keep phlebotomy writers on staff, just for the time that this specific course needs to be developed.
Of course, companies seeking to own educational and training content should recognize that there are costs beyond the human resources associated with developing high quality content. It takes effective processes and systems to develop content that matches particular specifications and objectives. It takes these same processes and systems to ensure that desirable content is created within precise schedules. Again, it costs money to develop and maintain these processes and systems, money that it would be unwise to spend if content creation is not an ongoing process.
The executive with whom I spoke understood that it costs significant amounts of money to keep content development resources available year round and successful companies do not always have an equal need for these resources. Therefore, these content owning companies typically contract their content development needs to content development houses. This business process allows publishers to spend the money only when they need to do so, lowering their costs.
The executive with whom I spoke clearly understood the business plan of successful educational publishers. The plan is simple:
Understand the types of content that the customer wants and needs.
Acquire this type of content.
Sell this content over and over to generate a sizeable profit.
Of course, many educational publishers compliment, even ground, this plan with a specific educational philosophy that they seek to infuse throughout their materials.
Educational publishers outsource their content development needs because it helps them achieve their business objectives. Successful educational content development houses know how to take on the philosophies of their clients and construct high quality content.