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Houghton Mifflin Harcourt Idea Proposal

Houghton Mifflin Harcourt Idea Proposal

Research Question: Will Houghton Mifflin Harcourt increase its market share as school and government spending on K-12 educational content increases?

Report Available: Nov. 12, 2015


Blueshift’s initial research shows K-12 educational curriculum spending trending higher. HMHC leads the K-12 space in market share and has developed some school district-friendly strategies. However several educators are wary that three publishers dominate the K-12 market, and uncertainty exists regarding whose mix of content is most effective.



  1. HMHC net sales fell 5%in its Q2, missing analyst estimates. The softness was predicted earlier in the year due to expected contractions in educational materials budgets. Billings in Q2 also declined by 15%, however they were 15% higher than what HMHC benchmarked at the beginning of the year. Some of its Q2 decline can be attributed to the timing of orders: some states’ orders that took place in Q2 2014 will occur this year in Q3 2015.
  2. State funding for educational material has fallen since its peak in 2005 but recent indicators show more funds being allocated to K-12 education. This trend is expected to continue for the next several years. HMHC leads the K-12 market in part due to its strong relationships with educational material buyers. HMHC’s bottom line could benefit as educational material purchases shift to digital content. The company recently committed to making all of its digital content compliant with IMS Global Interoperability Standards, a move that should win the favor of many school districts.Opinions about HMHC appear to be higher than major competitor PSO.
  3. Several within the educational system share concerns that the consolidation within the K-12 publishing sector will produce fewer options, but they applaud headway made by mid-sized players. Educational spending has shifted to digital content and other high tech educational material, but content decision makers are scrutinizing these purchases as studies show teachers’ underutilization of the technological solutions. Pearson has begun investing heavily in measuring educational material efficacy and may lead the sector in improving the underutilization or efficacy of ed tech and educational materials.


Will educational spending continue to increase in open territory and adoption states? What is the effect of industry consolidation on HMHC and others? How do buyers of content and decision makers evaluate HMHC compared to competitors? To gain insight into HMHC and the K-12 educational curriculum market, Blueshift will gather data and issue a market research report from independent sources in the following areas: Buyers of content/decision makers, Industry specialists, Sales channel, Supply chain, Curriculum developers


Companies: Houghton Mifflin Harcourt (HMHC), Pearson PLC (PSO), Scholastic (SCHL), Discovery Communications (DISCA), Cengage Learning Holdings (CNGO), John Wiley & Sons (JWA)