On a smaller scale, NBCUniversal has been building a service called NBC Learn, which digitizes and archives articles from NBC News to sell as a database and digital blackboard learning system; NBC Learn now operates in 5,000 schools in 43 states.
The Financial Times, owned by Pearson, is pushing MBA Newslines, a subscriber-only feature on its Web site that lets business students and professors create and share annotations on articles, allowing case studies to be built around real-time news events.
And then there is the Walt Disney Company . It is building a chain of language schools in China big enough to enroll more than 150,000 children annually. The schools, which weave Disney characters into the curriculum, are not going to move the profit needle at a company with $41 billion in annual revenue. But they could play a vital role in creating a consumer base as Disney builds a $4.4 billion theme park and resort in Shanghai.
Media companies have dipped their toes into education before, of course, only to find chilly waters. Discovery in 2006 promoted Cosmeo, an Internet-based service that offered children videos and other tools to help them with their homework; a year later, Discovery decided to stop marketing the product, which cost $99 a year, and laid off much of its staff. (Why pay for help when you can search Google at no cost?)
In 2007, Disney introduced a new position — senior vice president for learning — with the goal of moving into the North American education businesses. None of the company’s major efforts got off the ground, and Disney eventually pulled the plug, in part because it decided technology was changing the sector too rapidly.
News Corporation faces perception hurdles as it moves deeper into education — namely what some rivals refer to as the “Foxification” of schools, a pointed reference to Fox News Channel and its stable of conservative pundits. The company has said it has zero interest in inserting politics into schools, and notes that other assets, including the National Geographic Channel, which, like Discovery’s flagship channel, largely focuses on documentaries and educational programming, could play to the company’s advantage.
Last year, the New York State comptroller, citing News Corporation’s phone-hacking scandal in Britain, rejected a $27 million contract with its education division. The decision underscored one of the biggest hurdles faced by companies entering the education market: new products must typically gain state approval before schools even have the chance to decide to buy them.
Wall Street is skeptical that education holds as much promise as some media companies think. “When big conglomerates feel their core businesses have started to mature, they look for related synergistic businesses,” said David Bank, an analyst at RBC Capital Markets. “You have to ask yourself, are those education businesses really related and synergistic in core?”
Bill Goodwyn, chief executive of Discovery’s education unit, says in his company’s case, the answer is an emphatic yes. He conceded that Cosmeo “lost a lot of money,” but said that Discovery’s business had centered on education since its earliest days. Discovery Channel’s original name was Cable Education Network, for instance, and the company used to make money by shipping VHS cassettes of documentaries to schools.
Discovery currently sells a popular subscription streaming service to schools, which comes with 50,500 video segments and 6,200 full-length videos on topics like math, social studies and language arts. The service costs $1,570 a year for a school that serves kindergarten through eighth grade; high schools pay $2,095.
Still, Discovery’s previous efforts pale in scope to its Techbook initiative.
Mr. Goodwyn’s 200-employee division introduced the line of digital textbooks last year. Their cloud-based technology works with whatever hardware a district has — iPads, laptops, desktops. Discovery tailors them to the particular curriculum needs of various states (or districts within states).
“As a 30-year veteran, it was not always easy giving up some of the more traditional ways of teaching,” said Roseann Burklow, a seventh-grade science teacher in Mooresville, N.C. “But I love the Techbook. Students are engaged and can work independently or collaboratively.” (She did suggest one improvement: more games to help students review material for tests.)
Traditional textbooks cost about $70 a student; Discovery’s Techbooks start at $38 a student for a six-year subscription and go up to $55, depending on the subject and grade level.
Discovery knows education will never pay its bills. Last year, the company’s learning products, for instance, generated adjusted operating income of $23 million, a 53 percent increase over a year earlier. In comparison, its United States cable networks delivered operating income of $1.5 billion, a 10 percent increase from a year earlier.
Still, Mr. Zaslav said the education unit’s small size did not dim his enthusiasm. “Television is always going to be our primary focus, but we’re incredibly excited about the business potential of the Techbook,” he said. “Education is an area of solid, sustainable growth.”