The entertainer’s guide to the multi-billion-dollar classroom

Entertainment companies are finding it hard to resist the US$8.4-billion ed tech market—despite the learning curve it presents.
June 15, 2016

For most of our modern existence, technology’s role in the classroom pretty much extended to the big hand on an analog wall clock—one that exerted a gravitational pull on students anxious to see it strike 3 p.m. Nowadays, there’s a different kind of clock-watching taking place. Kids entertainment companies, both large and small, are racing to the classroom in the hope of capturing a piece of the US$8.4-billion American ed tech market before their peers get there, while simultaneously revolutionizing the way children learn.

Their motives are, well, textbook. For one, Disney’s doing it. The House of Mouse’s publishing and consumer products divisions launched the tech-driven Imagicademy initiative in late 2014, which offers digital learning options in the form of branded apps and products. Then there’s the aptly named startup Age of Learning, which received a US$1-billion valuation from Iconiq Capital this spring, largely due to the success of its flagship platform ABCMouse.com. Meanwhile, Apple is well underway on its experiment to provide each student and teacher at 114 underserved schools nationwide with an iPad.

It’s reasonable to believe that success in the commercial world would translate nicely to an educational one that’s comprised of 50 million kids enrolled in roughly 100,000 US elementary and secondary schools. But with a nascent ed tech market comes a whole new crop of legal, distribution, marketing and monetary considerations that make creating content and technology for the classroom far different from producing it for the living room.

“Parents are no longer concerned that an iPad is going to rot their kid’s brain—they see it as a vehicle for learning”

- Nicholas Fortugno, Playmatics

Take Playmatics chief creative officer Nicholas Fortugno, who knows there’s irony in the fact that a decentralized school system—comprised of 14,000 US elementary and secondary school districts—offers a better sense of stability than the chaotic commercial app market. The Brooklyn-based gaming development company Fortugno co-founded in 2009 is focusing more attention on creating serious educational apps and web-based experiences for publishers like PBS Learning Media. (The studio’s Meerkatcher for PBS teaches basic fractions and arithmetic to fifth and sixth graders.)

“Making a really substantially profitable entertainment game isn’t viable in an indie development market, where thousands of apps come out every day. It’s not strategic,” Fortugno says. “We are in a unique position because we have contacts in the educational space from our years of working in entertainment. And parents are no longer concerned that an iPad is going to rot their kid’s brain—they see it as a vehicle for learning.”

A recent Michigan State University study found that schools with one-to-one laptop programs saw a considerable positive impact on students’ test scores in areas of English/language arts, writing, math and science. (On the flip side, a Massachusetts Institute of Technology study found that university students who used laptops and tablets for note-taking purposes scored 18% worse in exams than their paper-pushing peers.)

Aside from students’ penchants for all things digital, many educators themselves have grown up using games as consumers, which is leading the shift in how devices are viewed both within the classroom and at an administrative level.

In making this a possibility, Fortugno says viable educational games require the involvement of curriculum experts from the outset. As a third-party developer, he says his clients will have educational advisors already attached to a project, or else he will hire his own.

“The keyword is metrics. Can we prove that a child’s Common Core skills were developed through using our game? Can we show that a kid is talking and thinking about math because of this game?” he asks. On top of these questions, a crop of new ones surface when it comes to distribution.

“Teachers don’t always have time to find an app in a classroom environment. Principals aren’t usually looking. So how do you do it? You build giant relationships over time to get into school districts, and use that as leverage to get into a lot of schools at once. We also tie ourselves to organizations that have school access in order to create successfully distributed products,” Fortugno says, citing New York-based digital curriculum platform BrainPOP as an example.

“The real roadblock is distribution. In the Bronx, you’re still looking to get a computer into the classroom. But there is potential to fix it,” Fortugno says. “The link between games and education is natural. Not to mention that entertainment companies know how to make things fun.”

The notion of bringing more engaging and highly personalized tech-based content into the classroom speaks to a shift in needs among today’s kids, according to compliance expert and Playwell LLC principal Linnette Attai.

“Teachers are directing their own learning and finding customized approaches. Tech is perfectly suited to facilitate that in ways that paper never could,” says Attai. “And now, the entertainment sector is turning its attention to the classroom because it is seeing great opportunities to provide valuable digital materials and lesson plans.”

Attai is seeing varied approaches to the space, with solely education-oriented startup hubs mainly situated in California, New York, Texas and Utah. Then there are purely entertainment-based companies that are dangling their products at schools. “But there are also the companies that are seeing their products used in an educational setting and saying to themselves, ‘Oh, there’s a market here—let’s get into it,’” notes Attai.

And that’s where the knowledge gap surrounding laws, advertising and distribution becomes apparent. “Most companies entering the space don’t know there are laws in place [see "Classroom Rules," p. 40]. Products paid for by schools are generally ad-free, but ones that are free do have monetization models involved. Should they be allowed in schools? It’s an area of emerging legislation and some scrutiny. It’s not an easy formula,” she says.


Attai points to the fact that over the past three years, there have been more than 300 student data privacy bills introduced at the US state level, plus several at the federal level. During this time, 73 new state student data privacy laws have been enacted, including California’s Student Online Personal Information Protection Act (SOPIPA). In effect since January, it protects student data privacy and security and aims to restrict marketing to parents and students when the product is used primarily for K-12 purposes in schools or at home. So far, it’s been imitated by 18 states, with 26 others proposing similar bills.

Advertising to kids is an ongoing issue whether in a purely entertainment or educational setting. But it is currently allowed in schools, which are plagued by tight budgets. And companies like Speakaboos also represent the conversation about bringing digitized licensed characters into the learning environment. The six-year-old New York-based startup, which counts Blue’s Clues producer Dr. Alice Wilder as its chief content officer, has a library of 200 literacy-based stories and songs. Most of them feature licensed characters from HIT Entertainment, Sesame Street and Scholastic, and all are accessible via smartphones, tablets and PCs. The company has set its sights directly on the classroom, and has recently nabbed US$12.5 million in Series B-1 financing (care of Wellington Management Company) to help bring its product into schools and to support customer-acquisition initiatives.

“By age 13, less than 30% of kids are reading for fun. But what if we made reading as engaging as videos and games?” asks Speakaboos co-founder and COO Noelle Millholt. “Speakaboos’ reading-motivation platform is available to kids at home and schools, and while we were initially direct-to-consumer, we saw teachers paying for it out of pocket. We realized that…there are rich opportunities in education.”

In making this transition, Speakaboos formed a council comprised of educators. The company learned that the best classroom tech products are those that have met US Common Core guidelines, use a seamless log-in process, offer school and home compatibility, include cross-device functionality (since many schools don’t have tablets yet), and offer a reporting function that lets educators gauge student engagement levels. (As such, Speakaboos will launch a teacher reporting feature for its platform in September.)

For now, schools can pay for a Speakaboos subscription (US$7.99 per month/US$69.99 per year). To get its product into classrooms in the first place, Speakaboos ran a promotion that offered free accounts for teachers (thousands of which were set up across the US), and the company has worked with third-party distributors like Illinois-based Sunburst Digital and Ohio’s OverDrive—which operate under a revenue-share model—to get a foot in the door. Speakaboos is now assembling its own sales team that will pitch its product directly to schools.

“The good thing is that once you are sold into a school, and after being vetted by them, we see that renewal rates are high,” says Millholt. “A challenge is the fact that sales cycles are long, so it’s all about relationship-building. We are also competing with strict learn-to-read programs like Reading 360 and Raz-Kids. But our personal approach helps teachers to help kids.”

Getting personal has quite literally been the key to success for digital marketing company Oddcast. The New York-based agency is perhaps most well-known for its ElfYourself user-generated platform, which lets people place their avatars into a scene of dancing elves (and other iterations that have since followed). Oddcast’s avatar-based tech has been shuffling its way into schools since 2012 by way of Voki, a platform that lets kids create their own talking characters.

“We set up Voki as an afterthought, as a site for kids to play with. We didn’t anticipate the level of excitement it nurtured in the education community. It’s a great way for kids to express themselves. And for students who may be shy, they are finding a voice through these characters,” says Oddcast CEO Gil Sideman. COPPA-compliant Voki initially launched as a free platform, and has now attracted 3.5 million subscribers. The company has taken Voki’s educational value a step further, allowing educators to edit and personalize animated avatars that can then teach Common Core curriculum-based lessons.

These HTML5 web-based lessons are not free (but they are ad-free). A subscription program is in place that costs anywhere between US$4.99 and US$9.99 per month. And Sideman is confident that school boards will want to pony up for this new style of learning.

“The classroom is changing. Mobile devices and anything screen-based is going to be accepted. And when combined with speaking cartoon characters, which add a creative element, it’s a perfect storm,” says Sideman, admitting that his purely entertainment-based ventures have been limited since his move into the ed tech space. But he is turning to social media channels to promote Voki and is regularly engaging Oddcast’s online communities about the product.

While infusing avatars into the classroom may seem like a gateway to full-fledged futuristic learning experiences, Playmatics’ Fortugno says schools are light years away from a tech overhaul.

“Anyone who thinks VR will soon be in the classroom—when some schools are still running on Windows 98—is bonkers. People don’t understand how isolated schools are in terms of funding, and classes are not going to become tech centers,” he states. But he does offer some remedial solutions. “One of two things will change education: Very easy-to-access technology that won’t make schools have to update their equipment. That’s inevitable. And the second is using devices that kids already have. If everyone is already walking around with an Android anyway, why not use it for education? eReaders are powerful, but I don’t know schools that are currently using them.”

That may change soon, since Amazon has just won a three-year, US$30-million contract to sell eBooks into New York City public schools. But the e-commerce giant’s eReaders aren’t part of the equation, at least for now.

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