by Karen Meaney
October 2, 2018
In an era of trade wars and challenges to traditional formats and distribution models, U.S. education publishers are re-examining their business models for approaching international markets.
The markets themselves overall have continued to cool. The value of textbooks exported from the U.S. to foreign markets declined 7.3% to $180.5 million in the first half of 2018, compared to the same period last year. Meanwhile, the value of textbooks brought into the U.S. also declined, down 5.8% to $108.4 million in the first half of the year.
Pearson (London/New York) has been the poster publisher for re-imagining a market position in recent years, shedding businesses—including sales of its English-language school operations in China and the planned sale of the U.S. K-12 school business—and zeroing in on digital courseware solutions, certification and assessment services, and online program management on a global scale, particularly in developing nations.
Outside of its North American business, Pearson’s revenue in its Core segment increased 2% on an underlying basis in the first half of2018; revenue in its Growth segment decreased 4% in the half-year. Pearson attributed the decline to an anticipated drop in sales to schools in South Africa, following a large purchase there in the first half of 2017. Pearson generates about 10% of its revenue from professional certifications and English language in its Growth segment. Another 2% comes from higher education sales in its Growth segment; about 5% comes from school sales in its Growth segment.
Cengage (Boston) in the three-month period ended June 30, instituted a restructuring program for its International and Gale segments to better align operations in those segments with market conditions. The International segment took a $200,000 charge in the quarter for the restructuring.
In the three-month period, the first quarter in Cengage’s fiscal 2019, International revenue decreased 1.4% to $57.8 million. The company attributed the decline to decreased higher education sales in Australia and in English-language teaching products in Asia. Increased higher education sales elsewhere only partially offset those declines.
Refocus at MHE
McGraw-Hill Education (New York) in March named Simon Allen president of its International Group and installed new regional managing directors as MHE refocuses the international business to more of a regional decision-making approach. MHE also is increasing its front-list publication for its international business, as well as domestically.
MHE International billings of $94 million decreased 11% in the first half of 2018. Digital billings of $14 million fell 6.1%. Digital billings accounted for 15% of segment revenue in the first half of 2018, compared to 14% in the first half of 2017.
McGraw-Hill said the strong controls on sales to distributors to deter international student editions from coming back into the U.S. market exerted negative pressure on segment billings.
Overall, among the top 10 markets for textbooks exported from the U.S., the largest value growth was in Germany, up 129.1% to $5.7 million; United Arab Emirates, up 39.6% to $8 million; and Australia, up 22.4% to $21.2 million.
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