LCX seeks content and funding for a learning object marketplace

Internet Strategies for Education Markets: The Heller Report, March, 2001

Defining intellectual property agreements in education is one issue (see above story), managing them is another. Recognizing the latter as the more complex proposition of the two, Pat McElroy has founded LCX www.lcxcorp.com), the Learning Content Exchange, a vision for a marketplace designed to manage e-commerce for learning objects in higher education. McElroy has 25 years of sales and marketing experience in higher education, having most recently worked as the head of higher education marketing for Oracle Corp.

As McElroy watches the market, he sees two key tenets: the future of e-learning is going to be a horizontal business with very few companies capable of capturing the chain from content creation to customer, and, he believes, the valuable coin of the realm will be learning objects, not complete courses.

LCX is an ASP, an outsourced infrastructure that can be used for various applications. At its broadest, it is a general marketplace that will carry learning objects created by publishing companies or individuals. The authors submitting the objects will define pricing, but McElroy anticipates a micropayment world of objects costing about $1 each. On the buying side, professors could assemble a collection of objects for a class and direct their students to buy the collection much as a textbook -- or individual purchases could aid a specific learning need.

When a purchase is made, the system will track royalty payments (including multiple royalty payments) as well as affinity fees to any third party that directed the buyer to the object. LCX will also takes a transaction fee, and this is to be the core of their revenue model.

For a smaller-scale application, a single campus could use the technology to outsource management of all their third-party electronic content, thereby ensuring that there are no infringements on copyright or licensing agreements. This type of use would be a fee-based service.

Early on, users will simply pay to access all content on the site for a defined period of time. Later, says McElroy, that subscription model will be refined to deeper and broader kinds of e-commerce, such as pay-per-use. McElroy anticipates launching a test form of the site in the fall and adding e-commerce features in the spring of 2002.

Meanwhile, the angel-funded company is seeking investors and building relationships with publishers and institutions that can provide learning objects. Negotiations are underway with a large consortium that has thousands of learning objects and the ability to provide reviews of learning objects. That party cannot yet be identified. McElroy also has a number of relationships that he is likely to bring to LCX; agreements with Academic Systems, for example, are likely, as are relationships with Oracle and Sun.