Very interesting news from Pearson this week. Pre-tax profits were up 72%, to $1.8 bn, chiefly due to the increase in digital revenues, which increased by 18% in headline terms to £2bn. This means that sales of digital products now account for 33% of Pearson’s sales. Students using Pearson digital learning programmes up 23% to 43m, and Penguin eBook revenues are up 106%, now accounting for 12% of total Penguin revenues.
According to the publisher’s chief executive Dame Marjorie Scardino, the proportion of sales derived from digital output and services – such as teacher training – was more than 50 per cent .
So for the first time (as far as I’m aware) a major “traditional” publisher is seeing more revenue from digital than from mainstream media.
This must leave the laggards in the digital sphere pondering about what to do next. Pearson in general – and Marjorie Scardino in particular – have always shown remarkable foresight in promoting digital products. Within their ELT publishing operations the path hasn’t always been rosy (remember Longman English Success, which singularly failed to live up to its name?) but persistence is winning out, chiefly (I think) because the market is now truly ready for the technology. The only other UK ELT publisher with a similar level of interest in new tech – though without Pearson’s super-deep pockets – has been Macmillan, with its terrific suite of digital products and services (Campus, onestopenglish, Global).
If I were neither Macmillan nor Pearson, I’d start looking at how to play catch up as quickly as possible, and getting my house in order, digital strategy-wise. There are some very interesting acquisition targets out there, maybe still at “bargain” prices – certainly compared to in-house development costs – and it’s definitely time to start scouting around.