Thread regarding Cengage layoffs

Flat World’s CEO torched Hansen in a blog post (and appears to be a lurker here): https://www.linkedin.com/pulse/6-points-from-cengages-earnings-call-alastair-adam

The Hanson/Hansen plan proves how incredibly out-of-touch Cengage leadership really is. The man completely overlooks two universal truths:

1. Publishing sales is, will be and has always been a relationship sale. Professors love having long-term, responsive and knowledgeable reps they can turn to when seeking to make a book change. When a prof finds just such a rep? THAT'S who gets the call when it's change time!

2. Professors do not meet with publishing reps to discuss systems or pricing schemes. Professors want to discuss content above everything else! Sure tech tools may become part of the discussion eventually, but adoption decisions begin and end with content. Once confident that the content is there, THEN faculty want to talk price and tech (in cases where tech is a factor).

This is basic, 101-level truth, and the fact that Cengage leadership has lost sight of these truths is astounding. No wonder Cengage flounders and fails as it does - leadership might as well move HQ from Boston to Mars, so disconnected from reality are they!

The small companies Hansen/Hanson mentioned repeatedly during the call are the independent, non-corporate publishing houses. The Nortons and Routledges and Oxfords of the world. Hanson described them accurately: "low cost, mainly print-based publishers" and he recognizes that they are a primary reason behind the Cengage decline.

His observation is true, and it seems as if this trend will continue and even increase over the coming years. These are companies who produce compelling, well-authored new works and who offer them for sale in print for price points right around $100. Sometimes there's tech and sometime's there isn't, profs and students are free to make their own call when it comes to use of technology.

Cengage adoptions are low-hanging fruit for these companies. Cengage adoptions are over-priced, under-serviced, and MindTap has garned very few true-blooded, committed users out there. These companies are able to offer a good, old-fashioned textbook for less than a CU subscription and they are earning themselves double-digit growth years doing so!

It's so funny, and sad. From the Cengage Titanic A Deck point of view, the industry is fading and dying. From the close-to-surface lifeboat POV these smaller companies share, this is a golden age in educational publishing.

Keep up the great work, Mr. Hansen/Hanson! The independent publishing industry is counting on you!

The post beneath this one explains who is actually remaining and why. Anyone still hanging on to this charade is not a top performer but rather a top follower of mediocrity. Enjoy the endless days and nights clicking through Magellan in all his warts and glitches

thought two things were very interesting: 1) His explanation that a major area of cost savings is that fewer reps were needed for accounts because, with CU, specialized reps weren't necessary. The reps are there to increase share of CU, not to produce takeaways. 2) He mentioned that the #1 priority of both students and professors was cost...and that that issue was the singular value driving what was happening in the industry. Cost is certainly important; but, those "smaller companies" aren't just selling photocopied cheap textbooks...they selling digital products which compete very well against MindTap

In the investor call, Michael just said that CU will allow Cengage to reduce its cost structure.

It's spelled with an 'O' don't you know...