OnCourse changes course
Video service for schools runs out of capital
Public television's venture to develop an on-demand digital delivery system for teacher-friendly classroom video is scaling back its ambition, having nearly run out of money before its beta test.
Lou Pugliese, who resigned as OnCourse executive director March 2 [2003], estimates the project would need to raise and spend $11 million before it could break even, but says the recession thwarted fundraising. The project raised only $3.5 million and will have spent all but about $250,000 by August, he said.
In comparison, a Booz Allen study for CPB, the major backer of the project, estimated in 2000 the service would need $50 million to get going.
Pugliese, former c.e.o. of Blackboard Inc. and head of education projects at TCI and CNN before joining OnCourse in 2001, said he quit after agreeing with the OnCourse board that his vision of the service would not succeed any time soon.
“The board decided it needs to take a slower track,” summed up Michael Connet, OnCourse v.p. for business development.
The nonprofit, based in Washington, D.C., is moving toward contracting with a private company to provide a service that public TV stations can offer, said OnCourse Chairman Rod Bates, executive director of Nebraska ETV. The board has the ultimate objective of the full-featured service Pugliese was developing but will rewrite its strategy for getting there, he said.
The OnCourse board “moved very quickly to change course” after reading a new consultants' report to CPB recommending that it not put more money into the project, according to Cheryl Williams, education v.p. at CPB. OnCourse had asked for an additional infusion of cash, she said.
Potential partner: United Streaming
Front-runner to provide the OnCourse service under contract is United Streaming, a two-year-old company based in Evanston, Ill. Johnjoe Farragher, United's v.p. for business development, said the likelihood of cooperation between OnCourse and United is “very, very high.” OnCourse also has talked with AIMS Multimedia, another privately held company that offers an on-demand service for teachers.
Twenty-eight public TV licensees already work with United as its local representatives, which “makes a real good partnership for us,” Farragher said. The licensees, including education-minded stations WHRO in Norfolk, KLVX in Las Vegas, Georgia PTV and the New York state stations, account for 60 percent of United's volume, he said.
If OnCourse and United make a deal, the service to schools would carry the station's name as well as United's, Farragher said. Participating stations also would get a volume discount negotiated by OnCourse, he said. [OnCourse and United negotiated a deal by May.]
OnCourse may later seek to graduate to partnership with United, taking equity in exchange for contributing assets, Bates speculated. Farragher acknowledged that public TV's digital signals will be a valuable asset for downloading video material to video servers at schools. United's service could also be improved by adopting the more sophisticated online systems developed by OnCourse, Bates said.
Public TV also could contribute a valuable brand-name asset, Pugliese said. Surveys indicate that teachers can't distinguish among video sources, except that they recognize material from such PBS programs as Cosmos and Nature, he said.
OnCourse already has developed or selected many systems needed to launch video-on-demand, Pugliese said. It's ready to beta-test an “information architecture” that lets teachers search for video clips by topic. Meanwhile, WNET has digitized about 100 hours of video clips for the test, and Education Development Center, a prominent research nonprofit, is preparing metadata tags for them, Pugliese said. It built an “asset manager” system that helps OnCourse match video “learning objects” with state curricular standards. And it's ready to test a copyright-protection system that would restrict usage of video clips to schools that had paid for them.
“In an environment where research suggested it would take over $20 million, we did it for less than $3 million,” Pugliese said.
A service like OnCourse would come in very handy on Capitol Hill as a concrete demonstration that public TV can deliver educational material on its new digital signals, Pugliese said. But the project lacks united support from public TV. Only 22 station licensees and educational institutions were investors. “When they say education is a priority, it's fragmented,” he said. “It's a very high priority in some places, a lower priority in other places.”
Private sector runs ahead
Two private companies, United and AIMS, launched their online video services for schools two years ago, beating OnCourse to the market.
When Kansas City's KCPT began work on an online system in 1998, both United's parent company and AIMS still focused on videotape sales, Connet recalls. But they moved quickly to offer their programs online.
United's website now offers 20,000 short video clips and 2,000 longer programs, according to Farragher. In February, teachers streamed or downloaded 321,000 clips or programs from United, four times as many as in February 2002, he said. Two-thirds of the material comes from United's own library but it also acquires selected material from TVOntario, Standard Deviants, Environmental Media and other familiar ITV sources.
United grew out of Altschul Group Corp., founded in 1954 by Gil Altschul as a producer and distributor of film strips and 16mm films for schools. In 1998 the company absorbed a competitor, United Learning.
United's list price for access to its library is $995 a year per school for kindergarten through eighth grade, $1,495 a year for senior high schools. OnCourse wanted to charge about twice United's price per student so that producers wouldn't lose revenues as schools switched over from videocassettes, said Bates. Pugliese said OnCourse recently began planning prices closer to United's.
Though “streaming” is part of United's name, it's not the technology of choice for delivering digital video to schools. United's users are slowly moving toward downloading video files ahead of time. OnCourse, like KCPT's Chalkwaves service, has planned to store its entire video library on video servers in schools. Stations will update the video libraries by datacasting over their digital signals at night.
Public TV: nobody's in charge
Pugliese found that public TV has “really good intellectual capital” among its employees but doubts an entrepreneurial project can “flourish inside an oligarchy — everybody's in charge and nobody's in charge,” with neither CPB nor PBS setting and pursuing a strategy for the field.
“The persistent virus in the public television business is a penchant for playing it too safe,” Pugliese told Current. “We spend a lot of time struggling to get things done, without exercising enough imagination.”
With some complacency, public television thinks like a broadcaster, he said, instead of moving quickly toward the “push-pull” interactivity of the future, when much of the public — not just classroom teachers — will want to get video on demand.
OnCourse hires United Streaming as online vendor
OnCourse, an offshoot of public TV that aimed to deliver digital video clips to classrooms, has agreed, as expected, to hire United Streaming, a competing private company, to provide videos and online infrastructure for the next three years, says Rod Bates, chair of OnCourse. The service will be operating by fall, he said. United agreed to give public TV stations a lower standard price, Bates said.
Twenty-eight public TV stations already have signed with United, Bates
said, and others will be invited to offer the service locally, co-branded
under their
names and United’s.
Unable to raise the capital to complete its own infrastructure and begin
operation, OnCourse scaled back its plans this year (see story above).
Bates hopes to
negotiate a closer equity partnership with United that would bring in OnCourse-developed
technology and stations’ assets.
Eleven prominent instructional video distributors, meanwhile, plan to announce this week a competing digital video service called Chalkwaves, using the name, technology and video selection of a regional service created by KCPT, Kansas City; and WSIU, Carbondale, Ill. The regional service will remain separate but provide technical aid, says KCPT President Bill Reed. The distributors, including Agency for Instructional Technology, Annenberg/CPB, TVOntario and GPN, plan to charge schools more than United does and pay producers three times the royalties, says AIT’s Joanne Flick.
The national Chalkwaves will provide video storage units at schools, Flick says, while United relies on Internet streaming and downloading to schools.
Web page updated Feb. 22, 2005
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