How English Language Learning is Fast Becoming the Ticket to Access Our Global Economy: An Interview with Lingo Media CEO Michael Kraft

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The world has undergone dramatic change over the last couple of decades, in particular how our economies and cultures have become truly globalized. Information is spread rapidly across a much wider footprint than ever before.

In this globalized world, English has become the common language for communication. With thousands of different languages and dialects across the globe, English is the touchstone, the point of contact for disparate cultures to come together to share ideas and conduct business.

The result is a huge demand for English language learning. The industry is growing at a rapid rate as people and governments the world over invest time and resources to help punch that ticket to the global economy that English has come to represent.

One company at the forefront of this industry is Lingo Media ($LM:CA) ($LMDCF). Combining a diverse range of curricula tailored to a variety of different cultures and using the latest web-based educational technology, Lingo Media is fast becoming a supplier of choice for governments the world over. talked with Michael Kraft, President & CEO of Lingo Media, to dig into what’s driving the growth in this industry and why his company is so well positioned to take advantage of it.

EQ: Why is English language learning growing at such a rapid rate, and why does the industry that you're in have such solid growth as a result?

Michael Kraft: The English language learning space has been growing rapidly in recent years and has continued to grow because the world is becoming smaller with globalization. English has become the language of commerce at an international level, and one that transcends borders.

The number of people learning English is now around 1.5 billion and the market for English language learnings products has grown to over $55 billion.

For many, especially in developing countries, English has come to represent an opportunity for a better life - for a better education, a better job, and the ability communicate with the world. That is what’s driving demand to learn English.

Most developing countries have instituted educational initiatives as part of sweeping government mandates and reforms to help improve the socioeconomic condition of their citizens. This results in curricula which requires that English be taught in the public education systems of many of these countries and creates significant exposure to English language learning at a young age – as early as age 6 or 7 at the elementary school level, and 13 at the middle school level. This has been a big driver of industry growth.

The market opportunities are enormous. Estimates range from 1 billion to 2 billion people who are currently learning English around the world. Many of the learners are not just in first world developed countries, but increasingly in developing countries.

Countries are adopting English and creating a huge market base as students progress through and then graduate from public education systems. Then they move into higher education where English becomes even more important.

EQ: There’s a lot of very exciting new learning technologies you're applying. Could you talk a little bit about EdTech and why these products are catching on so quickly?

Michael Kraft: There’s a real opportunity in applying technology to language learning, and surprisingly, the adoption of EdTech is often greater in developing countries than in developed countries - similar to how we saw mobile networks being built in China at rates and with capacity that exceeded mobile networks in many Western countries.

Together with the relatively widespread use of computers, tablets and mobile devices, it opens up the marketplace to a much wider audience. That allows us to deploy technology solutions that in many cases remove the need for an instructor.

For many developing countries, the educators are often not very fluent in English and poorly equipped to teach it. The use of technology eliminates that reliance on the teacher, although in many cases blended learning is the desired solution. We have technology to facilitate learning at your own pace or learning at home, but hybrid learning where a teacher is utilizing technology is also very popular.

We’ve created Course Builder and Lesson Builder, which allow us to rapidly digitize content and courses for online use in a very interactive and engaging experience. The combination of the content our editorial team is creating and the technology framework and tools that we've developed allow us to provide leading solutions for learners of all ages.

And we’re getting results! We’re winning government contracts. The majority of the contracts we’re securing are government contracts: primarily from either the Ministries of Education or Ministries of Labor at a municipal, state or provincial, or federal or nationwide level. The testing and approval process that goes into those contracts before they're awarded is very thorough and really validates that our products do work.

EQ: Obviously, it's clear that the effectiveness of these programs is playing out in the market. But it also sounds like there is a pretty dramatic reduction in cost by taking this approach.

Michael Kraft: Without a question. Learning through an online platform only requires a device with some form of internet connectivity. We don’t require a physical classroom. We don’t require an instructor. We don’t require textbooks and other teaching materials. Basically, it's providing more access with less resources. It's opening up education to the masses, because sometimes there are not resources available for traditional classroom learning.

I think it’s the need for access that’s driving so much growth in the space for digital products. The worldwide five-year CAGR for digital English language learning products is 11.1%, and expenditures are estimated to surge to $3.1 billion by 2018. A lot of people who previously lacked the opportunity to learn English can now do so with these products, and it’s having a dramatic effect on the pool of potential customers.

EQ: How is Lingo Media preparing for growth? Is your product offering flexible enough to address different markets?

Michael Kraft: The evolution of the company has been a series of three acquisitions in the online e-learning space. They were all turnarounds, and in all of these cases what we've acquired is either very valuable long term content and/or technology tools that could be deployed and refined to improve our content offerings combined with our technology solutions.

Research by Ambient Insight points to five major catalysts for growth in the digital segment of English language learning products: large-scale digitization initiatives in the academic segments; new government educational policies designed to increase English proficiency; consumer demand for digital language learning products, particularly mobile products; the proliferation of mobile learning value added services (VAS); and strong demand for specialized forms of English. I think the acquisitions we’ve made have positioned the company very well to specifically address these major catalysts.

What we've done with these acquisitions over the last three to four years is to integrate, revise and update the content and technology tools and platform into a very sizeable and compelling digital library of English language learning content. Our content fits and meets the needs of the users. The technology tools and user experience combine to make an excellent product offering, so we will keep building up our sales pipeline and continue securing contracts. At the same time, we’re working on custom projects which allow us to greatly enhance and expand our digital content library in addition while at the same time we continue to sell our off-the-shelf suite of products.

For instance, the content created for a specific government contract in one country would likely be licensed for use in country on an exclusive basis. I think it's important to point out that the content we're building is not specific to one country; it has worldwide applications. It’s very general content that would appeal and engage users in any country so they can deal with real world, international subjects and topics that have no borders. It’s world content. When students want to learn English, they want to become world citizens. They don’t want to learn English for China. They want to learn English for the world so that they can study abroad, become world citizens, and do business worldwide. Our plans always include the opportunity to license or sell that content beyond the specific country where we may offer exclusivity as we have a very large world market to address.

EQ: Are there any other closing comments that you'd want to make?

Michael Kraft: I would like to highlight our recent financial results and also point out to investors what they should be expecting from us going forward as well as our value proposition.

Last week we announced our financial results for the second quarter of 2015 and reported revenue of $1.79 Million and net comprehensive income of $993,552 or $0.04 per share. Our performance is largely attributable to an increase in revenue from digital learning, which increased approximately 776% year-over-year. In the quarter, digital revenue as a percentage of total revenue was greater than print-based revenue for the first time in our operating history, a direct result of our enhanced sales and marketing effort which led to securing new sales contracts in Colombia, Mexico, Peru, and other Latin American markets. The EdTech market for English language learning continues to present us with favorable sales growth opportunities in Latin America and globally.

From an investment point of view, we're a hybrid model. We’re a software as a service model with earnings that is also concurrently developing some very exciting and compelling technology that could provide additional upside value and further enhance the returns for shareholders.

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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