On March 3, Gale announced“expanded product and services initiatives, [a] new publishing program and the addition of industry-leading STEM content from partners.” According to the release, the updated strategies and partnerships “usher in a new era of resource development that will help libraries and their users thrive in today’s education landscape.” Gale VP and general manager Jim Draper notes, “Our new products and services … have broadened our scope beyond traditional library resources to help libraries solve real and emerging problems and create tangible outcomes for their users.”
The new initiatives include the following:
- Agreements with Springer and Elsevier to provide STEM (scientific, technical, engineering, and mathematical) content for the Gale Virtual Reference Library (GVRL) “to meet the growing needs of the hard science disciplines,” says Cengage Learning public relations manager Lauren Eddy. “The more than 2,900 titles from Springer, combined with additional content from Elsevier, will provide users with a single point of access to the most esteemed STEM publications.”
- The GVRL product is being rebranded because, Eddy notes, “[T]he product has outgrown its name and now goes way beyond a reference library.” GVRL’s ebook platform now “grants users the added flexibility of viewing and downloading content in multiple formats in addition to other unique benefits of Gale’s platform, such as ReadSpeaker text-to-speech technology and translation of content into other languages.”
- Seventy new ebook collections, which include humanities and social science disciplines and general interest topics, have been added to bolster Gale’s offerings to K–12, academic, and public libraries. Gale noted that more collections will be added in the future, “underscoring Gale’s commitment to being the largest eBook provider to libraries.”
- GVRL will be renamed with “plans to combine the reference content from its 90 publishing partners with monographs and multimedia content.”
- A proprietary monograph publishing program is being initiated as well. Combined with Gale’s store of 350,000 monographs, it “will deliver unrivaled benefits to scholarly and general researchers.”
Draper summarized the changes as Gale’s “big visions for the future,” noting that the company “look[s] forward to reimagining and reinventing ourselves to help libraries as they continue to evolve in this digital age.”
A Turbulent Year for Cengage Learning
This announcement follows a year of major challenges and changes for Gale and its parent company, Cengage Learning, which filed for Chapter 11 bankruptcy last July. At that time, Cengage reassured customers that “they will continue to receive high quality educational content, products and industry leading services and support they are accustomed to without interruption. Our vendors can expect to be paid in full for all goods and services provided from the date Cengage Learning filed for Chapter 11 forward.”
Cengage CEO Michael Hansen noted at the time that the company intended to “negotiate the terms of a comprehensive restructuring transaction with our key creditor constituents and quickly implement the restructuring plan.” In February, Cengage had restructured its debt and announced it was ready to “mark the beginning of a path out of bankruptcy and back to financial health.” On March 13, Cengage announced that the restructuring plan had been approved by the court. Hansen commented, “We have used this process to establish a new capital structure with a substantially stronger balance sheet. We expect to emerge as an even more competitive and well-capitalized company, with excellent liquidity and greater financial flexibility to accelerate our growth and continue to meet the evolving needs of our users and customers.”
Charting a New Identity and Role for Gale
It has been rumored that Cengage had been shopping Gale around, seeking to focus instead on some of the other Cengage-based business products and services. Joe Blumenfeld, SVP of corporate affairs, responded to questions about Gale’s future by noting, “[W]e do not comment on rumors and speculations. Gale is an important and integral part of Cengage and its business.” Even as Cengage itself has suffered in recent years due largely to debt problems, reports in Cengage’s 2011 annual report noted that 71% of Gale’s revenue at that time was from recurring subscriptions and sales, and 93% of its digital subscriptions in 2010–2011 were renewals. This suggests that Gale was not experiencing any significant growth. Strengthening Gale’s position in both the company and in the marketplace is clearly a necessary component in Cengage’s restructuring.
In announcing the bankruptcy last summer, Cengage’s chief sales and marketing officer, Kevin Stone, noted that “our focus over the next few years will be to strengthen our engagement with customers and a big part of our success in this area will come from our newly integrated sales and marketing teams.” Blumenfeld explains, “We have fully aligned our sales and marketing teams. This allows us to put support resources as close to the customer as possible, allowing for more seamless customer engagement. Listening to our customers, understanding their workflow and understanding the problems they are trying to solve, is a part of our company culture. This is evident in some of the new publishing program changes we have made on the research side of our business, Gale.”
Blumenfeld believes Cengage’s restructuring will be very significant for the company, its users, and client libraries: “We have come quite a long way in the process of resetting the company for future success. A large part of that strategy is to empower a dialogue with our core users. Marking an industry leading shift in long-standing practice, Cengage is putting students first in the development of educational materials. By closely aligning our product development and product management functions, we’ve developed an innovative product development process based on student workflow, and student feedback is continuously incorporated into our products and services. On March 13, Cengage Learning received confirmation of its Plan of Reorganization from the Bankruptcy Court that has been overseeing the Company’s Chapter 11 proceedings. The Plan received full support from all of the company’s major stakeholders. The confirmation clears the way for Cengage Learning to emerge from its court-supervised financial restructuring as expected, within the next few weeks.”
Fixing the Larger Problems in Education and Learning Today
The issues go far beyond Cengage or any other company in the education sector. Draper also noted in the recent press release that Gale has “broadened our scope beyond traditional library resources to help libraries solve real and emerging problems and create tangible outcomes for their users.” Blumenfeld stressed this critical social issue: “The dropout crisis in the United States is at epidemic proportions. Every 26 seconds another student gives up on school, resulting in more than 1 million American dropouts a year, or 7,000 every day. Today, there are nearly 40 million Americans without a high school diploma and there are limited options available for students age twenty-two and older who are looking to return to high school.”
President Barack Obama is making educational attainment a cornerstone of his higher education platform, with the goal of the United States having the highest proportion of college graduates in the world by 2020. Just last week, the Department of Education released new data that finds that “the opportunity gap among Americans hurts life-transforming opportunities for children.” Secretary of Education Arne Duncan notes that this new data “shines a clear, unbiased light on places that are delivering on the promise of an equal education for every child and places where the largest gaps remain. In all, it is clear that the United States has a great distance to go to meet our goal of providing opportunities for every student to succeed.” Efforts like the ones just announced by Gale may help institutions better provide key information and educational materials to students of all ages.
Eric Bond, an economics professor at Vanderbilt University, has studied the textbook market in-depth and says that “there are several factors putting downward pressure on prices of college textbooks, including technological innovations and competition from international editions of textbooks (especially after a recent Supreme Court ruling). The one positive factor might be the introduction of MOOCs [massive open online courses], which could potentially broaden the market for college textbooks. However, it is not at all clear how successful they will be in the long run.”
The cost of learning materials continues to increase as companies and institutions grapple with pricing issues, all of which leads to change. In the case of Cengage and Gale, they are embarking on a new beginning with renewed energy and progressive ideas. We can expect to see more change in the education and information marketplaces in the coming months as companies, schools, libraries, and even governments work to make learning tools more affordable, accessible, and engaging—yet reasonably priced.