Will the downsizing in edtech be followed by a reduction in media spends?
Does the string of layoffs portend a downsizing of marketing spends?
As liquidity is tightening and investors are looking at business models more rationally, the bottom line will start to matter more and more. This phase will mean consolidation in the edtech space and an increased pace of mergers and acquisitions. Existing players will become more cautious with their spending and growth plans. This has resulted in promoters looking to reduce costs, and some of the recent layoffs are a consequence of this. This could also have edtech reducing media spend in the short term.
Less capital going into edtech will necessarily lead to some reductions in all kinds of spending across the industry in the short term. But after that, once the dust settles, the winning companies will be in a position to scale up big and fast, and capital will flow again.
I think the current cycle in edtech is mostly about digital as a delivery model. But digital as a source of new and better knowledge is still largely undeveloped and could be the next big opportunity for investment. This is why I believe that, in a hybrid educational model, global schools have a lot to say, as their model is not just the delivery of learning but also the generation of knowledge.
It is a similar situation to the one we witnessed in the video-on-demand market. As much as Netflix and others have changed the way we consume content, the companies that excel in content creation – think Disney, for instance – are still there and very well positioned,” says Professor David Bardolet, Dean and Professor of Strategy, SDA Bocconi Asia Center, Mumbai.
Originally published on : https://www.medianews4u.com/has-the-edtech-bubble-burst/