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'Big ambition': Pearson pins its future on new U.S. app

Stock MarketsJul 30, 2021 04:50AM ET
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© Reuters. FILE PHOTO: The company logo is displayed outside the Pearson offices in London, Britain August 4, 2017. REUTERS/Neil Hall

By Kate Holton

LONDON (Reuters) -Global education group Pearson launched a new Spotify-style "all-you-can-eat" college app in the United States on Friday, the centrepiece of its new digital strategy to build direct ties with learners throughout life.

Having been buffeted by rental markets and second-hand options for once-expensive textbooks, Pearson has embarked on a direct-to-consumer strategy offering unlimited access to content to provide more reliable subscription revenues.

Chief Executive Andy Bird, a former Disney executive who has launched the new strategy, said Pearson+ was designed to offer the same ease of use as the high-end entertainment and media apps that students are used to.

In time it will be rolled out to markets around the world and offered to school and college students, English language learners and workers looking to develop new skills.

"The ambition for Pearson+ is quite large. It has been designed to create what is the beginning of a digital learning ecosystem," Bird told reporters, adding that it could also include sections for assessments and qualifications.

Analysts at Citi said the app could boost medium-term growth.

"As importantly, it shows that Pearson's new CEO Andy Bird is willing to be more bold than perhaps originally anticipated," they said in a note.

The launch came as the company reported a first-half adjusted operating profit of 127 million pounds ($177 million), in a better-than-expected rebound, with growth in sales as exams resumed and demand for online products jumped.

Its Global Online Learning sales rose 25% on strong demand for Virtual Schools enrolment in the United States. Global Assessment sales were up 34% following the cancellation of exams last year, and its U.S. Higher Education business fell by 2%.

With the Pearson+ app, students can pay $9.99 a month for a single eText, or $14.99 a month for a multi-access package.

Bird said the group was also in advanced talks with several large companies, looking to provide training for employees.

Pearson's shares, up almost 70% in the last nine months following six years of volatile trading, rose 0.5% in a weaker broader market.

($1 = 0.7175 pounds)

'Big ambition': Pearson pins its future on new U.S. app
 

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