Battle for a Market

As higher ed technology leaders convene today in Anaheim for the annual meeting of Educause, the battle for the lecture capture market is growing more intense -- and the definition of the market may be changing as well.

At Educause a year ago, there was still debate regarding how to win over faculty members skeptical of lecture capture -- a service in which class lectures are recorded and preserved in a digital library, frequently with additional materials such as relevant slides, quizzes or summaries. This year, the pre-meeting buzz has been less about debating whether lecture capture will take off than over which companies and which approaches are mostly likely to succeed. Some lecture capture companies are aligning themselves with big publishers -- while others say they are content not to.

One publisher-lecture capture partnership -- Macmillan and Panopto -- will today announce a plan to start pushing a business model in which individual faculty members would be sold on lecture capture and pass on the costs to students in the form of a low-cost licensing fee ($10 per student per course). The professors would assign a lecture capture purchase much the same way a textbook is assigned. While some in the industry see this as a way to expand lecture capture quickly beyond institutions that will pay for institution-wide licenses, others question whether this could anger students, and in turn frustrate professors who want to use the technology.

The Macmillan/Panopto push (which is a collaboration, not a merger or purchase) comes a week after McGraw-Hill Education purchased Tegrity, a lecture capture company. Further, existing lecture capture companies such as TechSmith and Echo360 report continued growth, with the former starting some pilots with sale of its high-end lecture capture service to individual professors, not institutions. But the TechSmith pilot for Camtasia Relay isn't based on students paying the fees, but on faculty members being reimbursed for doing so at institutions not willing to go all-out on a campus contract. Matterhorn, an open source alternative, has also emerged.

The companies involved in lecture capture did tens of millions of dollars of business with higher education in the last year, and are expecting significant growth for the next five years, as more faculty members and more institutions embrace the concept. (See Inside Higher Ed's Technology and Learning and Digital Tweed blogs for analysis on why the approach is likely to take off.) As a result, many experts predict that more publishers will embrace some form of lecture capture, either by purchasing existing companies, building their own system, or creating alliances.

Pearson, for example, already has many technology services that go beyond publishing and has encouraged partnerships with lecture capture providers. Don Kilburn, president and CEO of Pearson Learning Solutions, said that he considers lecture capture "an interesting business" in which "the technology is quickly evolving." He said that, at Pearson, "we keep our eye on new technology" such as lecture capture.

For those publishers that have moved into formal deals with lecture capture companies, some cite the need to broaden the definition of the services they provide. Troy Williams, vice president and general manager of new ventures at Macmillan, said he viewed the ties to Panopto for lecture capture as part of a commitment to "exploding the walls of the classroom" to bring more interactivity and student engagement to the learning process. He noted that Macmillan has already moved into the clicker business, selling devices that professors may use to quiz or interact with students during class.

The traditional model of lecture capture (including for Panopto) has been to sell to institutions, while giving away free use to selected professors to get their campuses excited and build demand for a campuswide contract. While Panopto is not abandoning that approach, Williams said that with Macmillan it will now offer a new "Panopto Fusion" product that will be sold like textbooks or clickers. The professor will make the decision to buy and assign use to a class, so students will pay the costs.

Williams said that he believes the trends are such that over the next five years, many colleges and universities will indeed buy contracts for their entire campuses. But with budgets tight and some institutions putting off any "big ticket purchase," he said that Macmillan believes that the model used to sell textbooks can work for lecture capture. He noted that the price per student ($10 for a single course, with discounts if more than one course assigns the service) is relatively low, and said that tech support would still be provided.

Given student concerns about textbook prices, Williams said that "pricing was a big concern" and every effort was made to keep prices low -- with large (but not yet determined) discounts planned for an "all you can eat" model in which students could have access for a year for as many courses as they are taking where the professors assign lecture capture.

In some ways, McGraw-Hill has just moved in the exact opposite direction. While McGraw-Hill has had an individual purchase option, Tegrity (its new division) plans to continue to focus on institutional sales. Michael Berger, senior director of marketing at Tegrity, said he believes it is "very difficult to go instructor by instructor" from both a sales and an organizational perspective. Given that an institution can provide campuswide training about how to best use lecture capture, "it makes a lot more sense to do this on the institutional level."

He said he understands why a publisher might want to embrace the model that has worked for textbooks, but he said that there are enough differences between lecture capture and a textbook selection that he thinks the smarter choice for publishers is to deviate from their traditional business model.

TechSmith is trying yet another approach with its Camtasia Relay lecture capture service. Rich Boys, the product manager, said that it has been sold to institutions, but he said that the company is doing a pilot now selling to individual instructors. However, Boys said that he still envisions the purchase being made by the institution and not passed along to students like buying a textbook or clicker. While students are big fans of lecture capture, he said, "students are not going to be happy" if forced to buy access to lecture capture.

Boys said that he's not surprised that publishers are teaming up with lecture capture companies, but he said he's not sorry that TechSmith hasn't allied with a single publisher. Of publishers, he said that "I think digital media scares them."

Experts outside the publishing and lecture capture worlds generally agree that there will be more interaction between the two sectors, but are less certain that a business model similar to a traditional publishing approach will work.

Aimee Roberts, an analyst for Frost & Sullivan (a company that analyzes lecture capture among other technologies, but that is not affiliated with any of the players), said she thinks there is potential in the textbook-style model, where professors make the decision and assign the purchase. She noted that "professors love their free resources," so companies trying this approach may win converts who are interested in lecture capture, but don't have budgets or institutional backing for a campus contract.

She said that all the industry research shows that "students love lecture capture," and she predicted that if the price is kept down, they would pay, once they get to know how it works.

"I know students don't like buying their textbooks, and the last thing you want to do is to put out some more money for the technology, but if the students are able to experience these technologies in a trial version, I think they will see it as something that benefits them," she said.

But Kenneth C. Green, director of the Campus Computing Project (and an Inside Higher Ed blogger), is more skeptical. He said the business model being proposed by Macmillan and Panopto "raises the question of how much more we can push students to buy in-course resources, whether core or supplemental." He said he is not certain that there is much elasticity left in what students will buy.

A key challenge, Green said, is that the model of a campus purchase gives the student the sense that lecture capture is free, and that creates "an entitlement" that many students already have. Add in the various pilot projects where individual professors have free access to lecture capture, and there are many students who may like lecture capture, but don't think of it as something to pay for, Green said.

The new business model, he said, "may be viable," but this is "uncharted territory."

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