Why Comic Book Fans Are Upset With Amazon

New post from Mark Tuminello –

mark tuminello comixologyThis new story on Vox about comic books was very interesting. If you’re not familiar with the world of comic books, which I am certainly not, there is an app that has dominated the online comic book world for two years. Comixology is the highest-earning iPad app in the Apple App Store (non-game app, that is). The app provides a way for people to purchase comic books with the tap of a finger, and displays them in all of their graphic glory.

In April, Amazon announced they were purchasing Comixology, which makes sense. Amazon is a major player in the world of book sales, dominating the online space. A spokesperson from the app made a statement that the company, brand and apps, wouldn’t be changed or otherwise affected by the purchase. But we’ve heard that before.

There are always changes when a company is acquired. Last week, users of the Comixology app found that Amazon had removed one-touch buying. We are now seeing a bevy of online backlash from users and publishers alike. Part of the reason Comixology was performing so well, was that it was very easy to use. Downloading comics was so easy, in fact, that analysts believe users spent more money. Sales tripled between 2011 and 2012, with $57 million in sales. They were a major player of comics moving into the digital space, with an estimated 20% of comics being purchased and consumed through internet apps.

The change made by Amazon seems minor, but the impact may be enough to give other comic book apps the opportunity to become new industry leaders. Apparently the buying process now involves several steps of verification of an account, and sends users out of the app and into the device’s web browser. Comixology is now a non-free pdf reader with links to purchase comic books. Users of the app are upset, because that’s not the app functionality that they bought last year.

Many comic book writers are coming forward to complain about the app, and users are finding themselves losing interest in some of their purchases during the purchase process.

The reason Amazon made the move is to remove the purchase from the iTunes infrastructure. Why let Apple get a piece of the pie when Amazon can be the sole beneficiary? It looks like they haven’t adequately measured the risk with the benefit. Removing the single most important part of an app, intuitive and easy purchasing, will kill it.

from Mark Tuminello

Are Student Loans the Next Housing Bubble?

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Mark Tuminello student loan bubbleThis article from the Huffington Post caught my eye.  The article points out nine ways that the housing ‘bubble’ of the last decade resemble the current state of higher education.  I work in both the financial and higher education sectors, and wanted to share some of the thoughts here.

The first similarity is that the same players are at work here.  We’ve got borrowers taking on loans that they may not be able to pay back.  We can expect that a percentage of students will become swamped with the debt they accrue in college.  The producers here aren’t homebuilders, but the providers of education – universities.  They continue expanding the offering, not planning for a potential fall in price.  The government, a provider of loans in the housing bubble, is actually the largest student loan provider.  And the non-governmental lenders, some of them, are lending irresponsibly.

Excess capital was a major component of the housing bubble collapse, and are similarly incentivizing risky loans to students.  Then there is ‘universal belief.’  In the case of higher education, borrowers (students) believe that they have to go to college, whatever the cost.  This encourages taking loans for students who may not be in the best place to start borrowing large sums of money.

We have overvalued assets.  Degrees cannot be re-sold, with their only financial value being better access to higher-paying jobs and connections.  Since these aren’t guaranteed results of higher education these days, college risks being unprofitable.  Add that to the fact that there is no down payment, no requirements of former employment, and we’re starting to see a problem develop.

Like in the finance sector, student loans are being securitized and sold.  Student loan risk is not being properly assessed.  They are based on credit score, which is insufficient when we consider these are people who have not been in the workforce in any serious way, and will be looking for jobs amidst relatively high unemployment.

The student loan asset security market is valued at over $2.5 trillion, and I haven’t read a lot of studies as to what effect a collapse of a bubble that size would have on a recovering economy.  Nevertheless, speculation would leave us to believe that the value of a college degree continues to go up.  With an increasing number of graduates, that might be too great an assumption.

Looking at these similarities, it may be wise to look back at the housing bubble and see if we can avoid making more of the same mistakes.

from Mark Tuminello

Democrats and Education

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Mark Tuminello educationSlate ran an interesting article this week that points out education as a major argument within the democratic party.  Even though the press most often runs stories of political infighting about topics like how much we should tax, how tightly we should regulate banks, and how high marginal tax rates should be for high income families, education has a much wider swatch of opinions…and just as much fervor.

In some of the financial questions facing democrats listed above, the differing views don’t represent entirely differing philosophies.  Instead, it’s really a matter of a few percentage points here and there.  Discussion about taxing high income families is about how we should carry out the agreed upon policies.  The divide among democrats is much more significant.

We know that democrats want to be the party that believes strongly in a very high quality of government-provided educational services.  So where is the divide?  Many teachers align themselves with democrats because of the importance placed on providing educational services for the country.  Teachers have actually gotten very involved in party politics, seeking to improve their own economic interests.  At the same time, many political scientists and writers, great thinkers, are worried that policies that exist to benefit tenured and incumbent teachers have become a major impediment to the quality of American education.  And democratic office holders find themselves on different sides of this issue all the time.

So where does the party stand on this issue?  It is very unclear at the moment.  What’s worse is that education is so rarely a large national discussion.  Instead, the president, congress, and other elected officials debate about taxes.  What has resulted is that education remains a disagreed-upon but rarely debated issue.  Whether democrats will be caught not knowing the party-line answer to questions of macro-level education trajectory remains to be seen.

The reform faction, on the surface, is winning out at the moment.  Many democrats have been persuaded to this thinking…for the time being.  Should the party be pushing for more charter schools?  Should teacher evaluations be tougher?  Education feels more important than a second-tier issue, but it looks like for the close future, it will remain there.  One day these party differences will come to light, and democrats will have to find a way to generally come to an agreement.

from Mark Tuminello

Moocs and Distance Learning

New post from Mark Tuminello –

Mark Tuminello moocsAs a professor who teaches ‘live,’ in the flesh, I found this article in The Guardian about distance learning interesting.  For instance, I didn’t realize that in 1938, an organization called the International Council for Correspondence Education was founded, with nearly 100 representatives in attendance.  Of course, distance learning is now more closely associated with advances in technology that is doubtlessly increasing the value of such an education.

The UK’s Open University had only been established for a couple years when it began broadcasting on the BBC in 1971.  JC Stobart, the channel’s first Director of Education, hoped to create a ‘wireless university.’  25,000 students watched the broadcast, focusing on the arts, social sciences, science, and math.

Even though we have all since seen commercials for online degrees since then, offered by universities and other organizations, distance learning really came into its own in 2008.  That’s thanks to Moocs – Massive Open Online Courses.  Moocs are courses that are free and open to an unlimited number of students.  Since 2008, MOOCs have grown rapidly, gaining critical acclaim.  Once particular Mooc provider, about a year ago, boasted nearly three million registered students.  That dwarves the number of students of the successful Open University over its entire existence.

To be fair, less than ten percent of students complete a course when it comes to Moocs.  That’s the catch with a free service, I suppose.  But those who are taking advantage of Moocs in a real way are avoiding rising tuition fees.  In the UK, they have received 10% fewer applications annually for the past couple years, between full- and part-time students.

Not all of these potential students are participating in distance learning, with numbers overall remaining the same year to year.  Distance learners tend to be older than the average university student, with many of them already holding degrees.  There’s still a lot of growth potential in distance learning, particularly as the technology develops.

The International Council for Correspondence Education is now known as the International Countil for Open and Distance Education.  They are also now partnered with Unesco.  There is a lot of hope in Moocs, even while the critics denounce it.  There is a generally accepted notion that there is still a long way to go before Moocs make a serious impact and become a significant portion of overall education.  Others wonder how Moocs will change education.  Democratizing education seems like a natural effect, but as there is no financial benefit as of now for providing Moocs, pay-to-learn models shouldn’t be too worried at the moment.

from Mark Tuminello

Can You Predict a Teacher’s Competence Before Hiring?

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Two companies are trying to help schools hire more effective teachers and they are using an interesting method to do so.  TeacherMatch based out of Chicago and Hanover Research from Washington have both created algorithms that could revolutionize the teacher selection process.  The driving force is test scores.  Both of these companies claim that their system will help school districts (they have been contracted by over twenty school districts between them) find teachers that can build up student scores.

For years Gallup’s TeacherInsight and the Haberman Star Teacher Pre-Screener have been the foundation of teacher hires across the country.  Both programs stressing a teacher’s beliefs and attitudes towards teaching.  These programs also focus more on a potential hire fitting in well with the school environment and culture.

Teacher Assessment - Mark TuminelloTeacherMatch CEO Don Fraynd was previously the chief improvement officer for the Chicago Public School system.  During that time he realized that how incoming teachers were being hired was not based on the qualifications he was looking for.  This caused him to leave CPS and he founded TeacherMatch three years ago.

To test his theory on qualifications he conducted a research study and partnered with others such as the Northwest Evaluation Association and University of Chicago.  The priority was to define what teacher qualities could identify into student test scores.  Every bit of research showed that four main factors needed to be judged when hiring a teacher: teaching skills, qualifications, attitude, and cognitive ability.  An elaborate algorithm was then created and judging these four things TeacherMatch can give each candidate a hard score.

While student performance is paramount and ineffective teachers tend to give students a disadvantage when it comes to testing there is also a business aspect to TeacherMatch and Hanover Research.  With their client list growing it appears teacher competence may become a $10 million industry for Hanover Research as early as next year.

from Mark Tuminello