Two game-changing agreements announced in the space of three weeks last month is the type of momentum most companies can only dream of, but for Lingo Media Corporation (CVE:LM; OTCQB:LMDCF) it is both reality and part of a larger overall plan that is falling perfectly into place.
Hot on the heels of an agreement with Telefónica Educación Digital SLU, part of the Spanish telecommunications group that ranks among the 50 top public companies in all of Europe, Lingo Media inked a distribution partnership with Gale, the library reference arm of one of the world’s largest education publishing companies, Cengage Learning.
It is exactly the type of leap forward the company was targeting when it made the bold decision to rebuild virtually from scratch its digital technology platform for students learning English as a second language. The whole idea was to position Lingo Media ahead of the curve, ready to capitalize on technology and learning trends as they evolved.
“About two years ago we made the decision that we were going to develop a brand new system, even though it might not immediately have any rate of return,” explains Gali Bar-Ziv, Lingo’s chief operating officer.
“We committed a tremendous amount of resources to building a suite of capabilities in terms of both content and the technology back-end. The result is that we are able to offer the marketplace a very flexible and solution-oriented product.”
Bar-Ziv uses analogies to get his point across, explaining that airlines use booking platforms that have been around since the 1980s, and that math curriculums in developed countries often date to a similar vintage.
When it comes to teaching communication skills, that just won’t do, as even though every language is based on certain vocabulary and grammatical concepts, change at more advanced levels is virtually constant. And that’s to say nothing about the challenge of not only piquing interest in language learners, but maintaining it once the novelty of gaining prowess in a new tongue begins to wear off.
Lingo Media saw that the solutions lay in two pillars that could also form its competitive advantage: technology and content.
On the technology side, the company’s objective is to offer products based on technologies no more than a year or two old. At that rate, users enjoy the types of interaction they are used to with other digital content encountered in their spare time, or at work. To use older systems, says Bar-Ziv, is to be “always chasing the next patch, rather than looking forward to innovation.”
The second pillar is content. With everything having been developed in the last 18 months, topics are current, as is vocabulary. No mention of phonographs, typewriters or Perry Como in Lingo’s learning modules. More like computer programming and ITunes.
The structure of the content library actually sounds as if it has similarities to that famous Apple Inc. (NASDAQ:AAPL) music service, in that users can access the system and take from it only what they want, thus making for customized lesson plans that achieve focused objectives.
“We build our lessons based on levels, skills and particular topics,” says Bar-Ziv. “They can therefore be configured to meet the particular needs of any institution. If you want 100 hours, we can configure a course for 100 hours. If you want 200 hours on one level, we can do that, too. Or we can focus on certain skills.”
Bar-Ziv says that many competing products are structured more like a book, taking the user simply from Point A to Point Z, with few options for tailored learning along the way.
It is the modern platform and content, he says, and the inherent flexibility for serious learners that is convincing groups like Telefónica and Gale that Lingo Media is the company to partner with in the industry.
From a corporate standpoint, the two agreements, plus others that came before them, position Lingo Media to take faster advantage of a rapidly growing market in which profit margins tend to be very high. Product development requires significant outlays, but once the platform and content are there, it is like having a warehouse full of product that never runs out and does not have to be re-stocked.
With both Telefónica and Gale, vast sales teams will represent Lingo product in pre-determined markets, taking a cut of the profit but instantly giving Lingo reach that would have been impossible to develop on its own. In the case of Gale, the agreement even calls for co-branding product as Gale Lingo, with related marketing to begin in the second half of 2016.
“Our approach is to partner with established players that are very connected and to work with them exploring opportunities in specific markets,” explains Bar-Ziv. “We understand that to operate directly in a market you need to be physically present, and that is very challenging. Our business model is one of finding different partners and partnerships and collaborating closely.”
Bar-Ziv guards further corporate strategy details carefully, choosing his words with skill befitting the officer of a company teaching English to students everywhere from academic institutions to the military. He does offer a few tidbits, however, including a window on Lingo’s vision.
“Many companies look at what they have built and try to figure out how best to sell it,” he says. “The reason we feel well-positioned in this marketplace is because we are looking forward. We are looking forward to educational needs, to educational trends and where we feel technology is going. We build our solutions so that when we look ahead we are ready to serve those needs and trends and opportunities as they emerge. We are excited about the future and feel we are still just at the beginning.”