PricingHelp Upload Home 

I’m a big fan of Lucy Kellaway’s column in the Financial Times, and last week’s was particularly pithy about the wonders of copying.
The fact is that that almost all decisions are based on copying what other people do, as set out in ‘I’ll have what she’s having’ by a group of academics

“As life gets more complicated, with more people and more choices, everyone does more copying.”

While we all strive to be original, the reality is that many of our best ideas come from elsewhere and are repurposed. At Teachable I’m happy to admit that we borrowed the resource list design from iTunes, the subscription options page from Highrise and the contributor rewards from Teachit – to name a few.
We are all led to believe that copying is like cheating in exams – something to be ashamed of – but the reality is that copying keeps us up-to-date with the freshesh ideas rather than getting stuck in a rut.

“As we are ashamed of copying we give it fancy names such as best practice and benchmarking, but I’m not fooled.”

So let’s all celebrate the copying of great lessons on Teachable (as long as the contributor who put in the effort benefits).  Taking a shortcut to inspiration really isn’t cheating.

No shoe adverts at all!

Over the last two weeks i’ve noticed something strange. I never see adverts from Google from my office computer. No in-search ads, no Gmail ads, no Adsense.

It actually took me a week to notice, as I am so used to blocking out the adverts mentally.

I’m not logged into Google+, and I haven’t got any adblockers installed (not that they would work with text ads). I just don’t ever see an advert.

I’ve heard for some time that Google varies what results you see based on IP address, so i’ll assume they haven’t abandoned their main business model and stopped showing adverts across the UK.

So there’s a few interesting possiblities:

1. Google is experimenting to see if I use search more effectively without adverts – which implies they have real concerns about the click-through of the current format.
2. Google knows I am a business owner using Google Apps, Custom Site Search etc, and so thinks I am more valuable paying subscriptions to them. This is my hunch, but would be a real shift of business focus for them.
3. Since I’m a user who very rarely clicks on ads, they are leaving me out to increase the observed click-through rate of adverts.

Has anyone else noticed the same?

How much of the education budget gets skimmed off each year before it every goes near a school or teacher? Well now we know – since the government published every expense by the Department for Education from May 2010.

Excluding payments to Local Authorities, direct payments to schools, academies and colleges and to other government departments, the DfE has spent £870m since the election on external services.

We have delved into the detail and found that, on subject specific initiatives, Media Studies (through Mediabox) and Music (through Sign Up) got over £3m each, while Maths only £0.5m. Is that right when Maths is much more critical to future life chances?

One egregious example of waste is the £3m rent paid on the lease of the old MI5 building in Piccadilly, owned by the Sebba Family, which was vacated by the QCDA last year… but the break-clause in the lease was not exercised. How many more services have taxpayers paid for that the Department didn’t even use? There is also £5m paid to ‘Redicent Ltd’, although there is no such company registered at Companies House.

Although some of this £870m is due to be cut from the next financial year, the cuts announced (including Becta and QCDA) amount to only 25% of this largely discretionary spending.

The TDA (taking nearly a third of this budget) looks to be slimming down, but CAFCASS and the National College for School Leadership (costing over £220m annually between them) offer very dubious value to children and have so far escaped cuts.

£35m was spent on management consultants and professional services, with PA Consulting, Ecorys and Serco being the biggest beneficiaries.

What particularly annoys us at Teachable is that the DfE has already spent £10m this year marketing to the schools workforce; much of this is just a distraction to teachers, and a waste of paper. Promotion on Teachers TV will have to stop, but there is still over £3m on other advertising, half a million on event organisation and £0.3m supporting Teacher magazine and its falling readership.

If you can spot any more obvious potential for cost savings, please add a comment.

As an organisation based on the principle that ‘you get what you pay for’ with online content, we’ve been watching the Times subscription experiment with interest. We believe finding the right format to charge readers online is a prerequisite for future investment is quality content.

The payment figures from the previous 4 months were out yesterday, and the results are disappointing but not disastrous. The Times and the Sunday Times have had over 105,000 people paying since launch, and around half of these were subscriptions.

So on a monthly basis we can break that down as around £20,000 per month in one off transactions (£1 a time) and around £200,000 per month* in ongoing subscriptions. But it is likely they have spent many millions driving this traffic.

It is difficult to estimate what an online newspaper can really making from advertising, but an informed source put The Times’ previous 10 million visitors a month as worth about £1m a month in advertising.

So it may take over a year to surpass the advertising revenue they have given up, and the site will require ongoing promotion (since their search traffic has died away), yet it seems worthwhile to generate a GROWING revenue stream – online advertising rates substantially declined last year. Plus the opportunity for more targeted advertising.

However, I expect many smaller publishers to be daunted by the difficulty that even one of the biggest global media brands has had in getting people to pay online.

* The introductory offer is £1 for the first month, and then rises to £8 for web. Theoretically there is another £10 a month for the iPad, but that has been suspended to drive sign-ups. So we’ll assume that although 50,000 subscribers signed up, only half of those stayed on more than the first month (after the price rise). That makes 25,000 people paying £8 = £200,000

All in, the Department for Education got off lightly in the spending review, with only 3% cuts overall (compared with 25% elsewhere).

Primary and Secondary schools in England should be relatively unaffected, although no increase in school budgets will seem like a cut after a decade of 5%+ increases.

Winners

Early years / Nurseries – 15 hour a week allowance for all three and four year olds kept, plus Sure Start maintained

Schools in poorer neighbourhoods – £2.5bn pupil premium for some, but this will mean up to 5% cuts for schools in affluent areas

Teacher independence – “teachers will be given greater freedom from bureaucratic burdens to use their professional judgement to meet the needs of their pupils”

School Management Teams – lots more money will be going directly to schools with no strings attached, rather than siphoned off for local or central schemes. So one-to-one tuition, the ‘Every Child A Reader’, Extended Schools grants, school standards grant, school development grant, specialist schools grant, ethnic minority achievement grant, and National Strategies budgets are likely to all be rolled into the Dedicated Schools Grant.

Losers

BSF projects – apart from 600 lucky ones “in areas of severe demographic pressure and addressing essential maintenance needs”

16 – 19 education – Education Maintenance Allowance cut and FE College funding reduced by up to 25%

Civil Servants – major savings from “rationalising and ending centrally directed programmes for children, young people and families.”

Local Authority Children’s Services – spending for schools will be ringfenced, while other funding for LAs is savagely cut. So many advisors and support staff will presumably go.

Suppliers to Quangos and LAs – many software, training and consultancy advisors have built their business around the streams of money allocated centrally for ‘school initiatives’. This money will now dry up as suppliers have to convince schools directly of their worth.

We’re going up to Scottish Learning Festival in Glasgow on the 22nd / 23rd September. After a glance at the 26 page show guide, and the hugely complex exhibitors map, we realised we could help visitors out with some Teachable simplification.

We’ve produced a one page show guide to print and take the show – please download and share.

DOWNLOAD THURSDAY’S GUIDE

We’ll be updating it again on Wednesday 22nd when we’ve been around the show. We’ll also be producing a series of video blogs interviewing the best exhibitors and speakers at the show. Those should be live by 4pm on Wednesday 22nd.

We hope you enjoy the trip if you make it to Glasgow, or save yourself some time if you don’t

I was struck a BBC forum this morning asking whether users would be prepared to pay for an online edition of The Times newspaper. Admittedly, there is some bias as readers of the BBC news site are likely to be strongly in favour of free online news.

Still, the naive assumption of 99% of the posts that widespread, high-quality news will still be available if no-one pays is astounding.

Not a single comment here has pointed out that this is not about greed on behalf of News Corp; it’s about survival.

Every mainstream newspaper in the UK is loosing money at an increasing rate. At current projections the Independent, Evening Standard and most local newspapers will be close down by the end of 2010 (even with the cash injected by Lebedev). The Guardian, Times and Telegraph may not last 3 years without a new income stream. That’s because few people click on the online adverts, and all that writing, photographing, editing and web development still costs money.

So if the posts here are to be believed, and users baulk at paying for the online edition the options for getting British news in 5 years time there will be a stark choice:
(a) source news from a haphazard stream of opinionated bloggers
(b) rely on a monopoly output from the BBC (which will likely decrease due to cuts)

There won’t be a newspaper to buy at your local store.

And I feel strongly because the same argument applies to educational content in the longer term. Yes, a group of enthusiastic amateurs have always and will always publish their educational ideas for free, but if teachers want a reliable, high-quality range of resources they have to pay for it online.

Over the last year there has been fevered speculation about what the world’s fastest growing internet company is really worth. $10bn, if judged by Microsoft buying a tiny stake of 1.6% in 2007. $15bn, if judged by the 2% stake bought by a Russian investment group in 2009.

But the growth in users has slowed (unless Facebook actually starts giving free smartphones away in India and China), and like any maturing business it needs to be valued on what cash it is actually generating for shareholders.

So firstly, the top line. Facebook gets around 260 bn page views per day.

By a few simple experiments with their advertising platform I reckon the average click through rate for their adverts is just below 0.01%. They serve 3 ads on each page, so that means 1 in around 3,500 pages could be revenue generating for them. But that assumes they have enough advert inventory to keep showing new ads to their users (who get bored easily); perhaps safer to assume only 1 in 5,000 pages generates click-through revenue (or the equivalent).

We’ll assume the average click-through advertising rate is 30 cents.

$0.30 x 5m clicks = $1.5m per day = $550m per year.

The costs are not insubstantial either though: 40,000 servers – which probably cost the best part of $200m to buy and set up – and storing maybe 100 petabytes of images, video and log data (80bn images alone).

There are also 250 engineers and support staff, which is about $60m of annual cost.

So we could be assume that their total operating expenses are around $200m a year. That still leaves a healthy profit of $250m.

That doesn’t account for any revenue from some of their more sophisticated cross-sell and data-mining ideas – which have caused such user outrage. Assuming they can find a non-contentious way to double the profits over a few years, and maintain their pageviews (if not their share of global traffic), the business could easily be valued at 20x EBITDA, which gets you to … $5bn.

So it looks like Facebook needs to go some way to prove it’s worth, mainly because not enough people click on ads. That’s why we haven’t served ads at Teachable so far: only one is a few thousand users actually find them useful.

So Becta are officially gone in the autumn: by closing the quango the government hopes to save £80m.

And beyond that the education department’s budget will be cut by another £590m. The Chancellor has said that schools’ funding, the Sure Start programme and spending on education for 16-19-year-olds will be protected. But that leaves a lot of the Education budget protected:

1. Sure Start: £1.8bn
2. General Schools Spending: £31.7bn
3. Teachers’ pension scheme: £10.7bn
4. Young People’s Learning Agency (the 16-19 part of Learning and Skills Council): £6.5bn
5. Academies and Specialist Schools: £1.1bn

That means only £9bn out of a total £61bn Education budget that can be cut. So that £590m will be a 7% cut of everything else.

If you assume that the Building Schools for the Future (BSF) programme will continue in some form (or at least that many contracts have already been signed and won’t be reneged on), then there is only £5bn left unprotected – and 13% of that will be cut.

If you work in a quango or agency (or a supplier company) that gets publicly funded outside of these protected areas, I would be pretty worried right now!

The unknown part is how much of what these quangos do is seen as really essential, and will just be reabsorbed in a re-organised Department of Education (i.e. Becta employees become DfE employees) and how much will just be cut loose.

And let’s be honest; the government will need to reduce spending again by double the amount next year, so by the end of 2011 over 40% of those ‘non-core’ activities of the Education department could have ended.

As someone who has filled in countless internet forms I accept my email address is probably known to half the world’s spammers, and so I’m used to dubious emails turning up from across the globe. But nothing could prepare me for the missive this morning from a budding Indian entrepreneur.

“i am komal prasadplease inves ment in this enterprises 009310336633 in india read this file stevi product”

Now i’m sorry, but if I get a link request to a new educational website with an errant apostrophe I generally judge them unworthy. To get an appeal for serious investment from someone who’s never heard of punctuation is more than laughable. I love the spirit of someone trying to start a Stevia (natural sweetener) cultivation by appealing to Western wallets, but it took me three reads to work out that the sentence had meaning at all. So no, Komal, I can’t investment in your enterprises.

But then he has got my attention..