Perdido 03

Perdido 03

Tuesday, August 25, 2015

Joel Klein Brought His Incompetence To News Corporation, Helped Rupert Murdoch Lose Hundreds Of Millions Of Dollars

Buzzfeed with a post-mortem on Rupert Murdoch's Amplify digital education revolution:

Amplify, Rupert Murdoch’s attempt to disrupt the American education industry, had a lot going for it: a lot of hype, a lot of media attention, a lot of high-profile names, and a lot of money to spend. Then add to all that the fact that the education industry seemed especially vulnerable — dominated by big, cozy, slow-moving incumbents, just the way Murdoch likes it.

But none of that mattered in the end. As it turns out, Murdoch’s News Corp. couldn’t even make waves in the education world, much less disrupt it. During its short life, Amplify bled money, losing $193 million in 2014 alone.

On Aug. 12, News Corp. said it was in final talks to sell Amplify, had written down the value of the business by $370 million, and would wind down the education unit’s first and most ambitious project, a custom-made tablet computer that was supposed to revolutionize education technology. The venture lasted just three years at News Corp.

Amplify’s high-profile failure, despite the people and money backing it, is a sign of just how strange and difficult to navigate the education industry can be. The company underestimated almost everything about the industry: the deep entrenchment of the biggest players and the complexities of selling to school districts — not to mention the surprising political power of parents and teachers unions, who had a not-insignificant hand in the company’s troubles.

Amplify wasn't helped when news broke that their tablets set themselves on fire or broke when turned over.

Nonetheless, the Buzzfeed analysis is that Amplify thought they could "disrupt" the education world by going right at their competitors and getting districts to sign on to Amplify contracts but failed to grasp that they needed to build and develop relationships with districts and district personnel first.

Another reason for Amplify's failure?

Google beat them by offering cheaper hardware in their Chromebooks that came with built in keyboards (Amplify requires separate keyboards for the tablets) and offered more software  flexibility:

For one company, however, grabbing market share in the education business has been anything but slow. Google was hardly a blip on the education world radar in 2010, when News Corp. bought the testing company that it would eventually transform into Amplify. But more than half of all devices sold in education are now Google Chromebooks, outstripping even iPads in sales.

“Is the industry still ripe for disruption? Absolutely. The disruptor has been Google,” said Phil Maddocks, an industry analyst with Futuresource Consulting. “They’ve come from nowhere.”

Google Chromebooks had a lot of advantages over Amplify’s tablets. They are cheaper than almost any device on the market. They also come with keyboards — a necessity for many state tests, which are increasingly taken by computer, and a feature that is increasingly in demand for older students.
Chromebooks are also better suited to the “extremely fragmented” education market, where many districts and teachers prefer to piece together content and apps, rather than turning to one company for curriculum, apps, and devices. While Amplify’s tablet was technically “content-agnostic,” meaning it could run other companies’ software, it was envisioned as a “complete mobile learning system,” in the company’s words. It came designed to be bundled with Amplify curriculum, with hefty discounts for school districts if they bought Amplify’s content alongside it. That subscription cost an additional $99 a year.

“They were really offering only one solution,” Maddocks said. “In the past, when we’ve seen hardware try to link up with content, it hasn’t worked. It all comes back to the fragmentation of the [content] market — every district wants a different solution.”

Amplify also misread the competition - they thought Pearson and other textbook companies would be slow to move to digital.

They were wrong:

And despite how it had looked when News Corp. headed back into the education market in 2010, companies like Houghton Mifflin and Pearson were not as print-bound and slow to adapt as they had seemed. Houghton Mifflin, the biggest player in the elementary education space, made heavy investments in technology, and its sales are now mostly digital, though by a slim margin.

These were key mistakes that ought to cost Joel Klein his job at News Corporation, but as we see again and again, accountability is only for the little people.

Instead, they will cost other people at News Corp their jobs, even as Klein makes excuses for his poor leadership at Amplify:

In a long letter to Amplify staff announcing the company’s impending sale, Klein offered his own explanation. “Amplify’s work has been so innovative and transformative that we’ve been ahead of the market,” he said. “That, in part, helps explain what has happened with our tablet business.”

Ahead of the market?

Uh, uh - behind the market.

Chromebooks with keyboards are the way forward, not Amplify tablets.

Software flexibility potential is the way of the future, not "complete mobile learning systems" built into the hardware and available to access for a yearly fee.

The only way Amplify was "ahead of the market" is if you think that tablets that break easily are the way of the future.

More Klein incompetence, this time at News Corporation, but as is usual with Jeol Klein, there is no accountability for his failures.

Joel Klein keeps failing upward.


  1. Bloomberg was about to fire Klein due to incompetence. Klein bailed out and attached himself to Dial M for Murdoch.

  2. Add our friend Chris Cerf to the round up.

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