In a provocative article today in the New York Times (June 6, 2008), Paul Krugman makes the case that all media (books, music, articles, software, etc.) providers/creators will be forced to lower prices significantly or give away their products for free. The new business model will involve selling ancillary services or products.
This will not only produce a profound shift in how the world works, but it will affect the learning-and-performance industry as well. For example, no longer will I be able to earn practically nothing for producing some of the best research-to-practice stuff on the planet. Instead, I’ll be able to earn nothing at all for the research reports I produce. No worries, I’m all right with that. I’ve got my consulting and speaking to support me.
But really, all you training providers ought to peer deeply into the future. How will this affect you?
Here’s some wild ideas:
- Off-the-shelf e-learning courses will get really good and be sold really cheaply to wide audiences and all the small e-learning shops across the world will collapse into three to five big powerhouses, at least for generic topics like customer-service basics, leadership basics, Microsoft Excel, etc. (maybe just within countries at first because of the need to be culturally appropriate)
- Companies that sell vast collections of mediocre e-learning are doomed.
- Custom training vendors will have to focus on learning that is strategic to their clients success and/or tailored. We’ll all have to get better talking to the business people.
- Training will have low profit margins, but training with consulting will have sustainable profit margins.
- LMS’s (and the coming talent-development upgrades) will be given away cheap, but installation, training, and maintenance will be sold for reasonable margins. Moodle will win. Well, Moodle could get other open-source competition.
- Training departments (or talent-development departments) will be able to purchase some things more cheaply.
- All the e-learning development tools that proliferate today will disappear or be reduced to niche segmentation as two to five dominant players provide relatively inexpensive yet powerful authoring tools. Think Captivate at $259 in five years, $79 in ten years.
- Training vendors may actually be forced to prove their value as the market shrinks and competition heats up. Can you say control-group studies done by independent unbiased evaluators. (I’m probably biased in wishing for this).
Training vendors may actually be forced to pay attention to the learning research to enable them to actually get better results so they will look good on valid evaluations. (I’m probably biased in wishing for this).
Okay, what do you think?
As for my research/consulting practice, don’t worry, I’m already there. I basically make 80% of my money doing consulting, speaking and keynotes, workshops, learning audits, and providing instructional-design help. My research is done for love, because it’s the right thing to do, and because it makes me—in my not-so-humble opinion, extraordinarily good at providing consulting, workshops, etc.