News Corp. is putting its Amplify electronic learning platform and curriculum up for sale because the new school year selling season flopped and the rush to digital tools never materialized.
Was the demise due to educational institutions' reluctance to change or fatal flaws with Amplify?
Amplify, a News Corp. business unit that aimed to reinvent education via digital tools, tablets and curriculum reinforced with snazzy graphics, became a $371 million write-off in the media giant's fourth quarter.
That write-down comes nearly five years after it purchased Wireless Generation for $360 million in 2010 and renamed it Amplify. At the time, News Corp. was going to bet about $500 million on Amplify to dominate the market. Amplify was led by Joel Klein, the former head of the New York City Department of Education.
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Amplify had a digital library, various tools and a tablet-based platform. Amplify also had analytics, curricula aligned with state standards and distribution tools Amplify and AT&T collaborated on pilots for tablets.
News Corp. CFO Bedi Singh said on the company's earnings conference call:
We are in the advanced stages of reviewing strategic alternatives for Amplify. The recent selling season for the new school year for our digital ELA (core tools for grades 6-8) curriculum overall has been disappointing, and the marketplace for digital curriculum has been much slower to develop than we initially expected. Additionally, we are no longer accepting new tablet customers, and will only be providing service and support to existing customers.
Analysts were trying to figure out how much News Corp. would save by selling Amplify. One guess was that News Corp. would save anywhere from $75 million to $100 million.
News Corp. execs didn't confirm that guesstimate, but did note they'd save money.
While there will be a few obits on Amplify it's worth pondering what went wrong. Here are some observations:
Here's a look at Amplify's cost comparison with Google and Apple on a per student 1:1 basis:
To calculate the total cost of ownership over three years, we took the cost of buying the Amplify System for three years ($359 for the first year and $60/year for years two and three for software, content and support) and then calculated what it costs to buy a Chromebook with touchscreen (Acer C720P at $299) or an iPad Air ($499), as well as what it costs to get the equivalent instructional software, K-12 content and implementation support offered in our system for three years with each device.
Amplify may have a future with a new owner, but will need more runway to market its platform and develop an ecosystem. Even then, Amplify's competitors are likely to have more resources.