SkillsBank, Grolier enter software project Firms will develop educational material for home use

February 06, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

SkillsBank, a Baltimore-based company that develops computer software programs for school use, said yesterday that it has struck a partnership with Grolier Direct Marketing, a telemarketing arm of the stalwart publishing house, to develop and market a new line of educational software for home use.

The partnership marks 10-year-old SkillsBank's first effort to develop a product line for the mass consumer market in multimedia educational software, estimated by analysts to be $100 million annually in the United States and growing.

And, the deal marks Grolier's first entry into the exploding market for CD- ROMs that have educational themes.

The software, which will teach and reinforce "basic skills" -- reading, writing and mathematics -- will be targeted to elementary school grades three to eight, the companies said. It will have the capability to adjust to a child's learning level, will diagnose for parents how well a child is doing, and will show parents the concepts that the program is meant to teach, SkillsBank said.

Garry McDaniels, SkillsBank's president, said the company believes that parenting trends favor introduction of home-use educational software. The company's research, he said, found a growing number of parents taking an active role at home in their child's education.

"This is very exciting for us," said Dante Cirilli, president of Grolier Direct Marketing. "It will be the first time Grolier will market a product that is strictly curriculum based. But it also is a big challenge. We want to bring some innovation to this product line, so there is an element of fun to it."

The agreement also calls for privately held SkillsBank to develop a line of home use software for adult and adolescent remedial education.

Connecticut-based Grolier will share some software development costs and will assume the responsibility of selling the new line through its strong telemarketing division, which generates an estimated $250 million a year in annual revenue.

About 30 software titles are to be released in late August. Revenue from the product line will be split through a royalty arrangement. The companies declined to disclose details of that agreement.

Mr. McDaniels said the effect of the new product line on his company "could be extraordinary." He estimated that the home-use product line has the potential to double company revenues by mid-1997. The company has annual revenues of $6 million to $8 million, he said.

If the product line is as successful as SkillsBank expects, Mr. McDaniels said, it will likely result in the company adding new software development and sales jobs, though he could not project the number. The company currently employs 75 people.

Mr. McDaniels said SkillsBank devised the concept for the home use product, then presented their product to several publishers that market software through retail outlets.

SkillsBank decided not to deal with an unidentified publisher, said Mr. McDaniels, when he and other company executives grew worried about the fierce competition for shelf space from the enormous volume of new software titles issued annually -- estimated at 3,000 this year.

SkillsBank approached Grolier Direct, which markets its line of children's books and software products -- the line includes the Doctor Seuss Beginner's Reader Program -- through a sophisticated, niche-oriented marketing campaign that zeros in on new births in the United States.

Grolier Direct, a subsidiary of France-based Matra Hatchette, pitches its book products to households as children enter the learning years.

Mr. Cirilli said Grolier had been looking to enter the market for home-use curriculum materials, and liked SkillsBank as a partner because of its focus and experience.

The arrangement with an entrenched telemarketer will allow SkillsBank to compete on price with other educational software publishers, because it won't have to factor in the cost of paying retailers for shelf space, Mr. McDaniels said.

He expects titles in the series to average about $20 each -- about half the price of retail software.

The companies face tough competition in educational software for the home PC market, nonetheless.

Industry analysts say there are six to seven major players, including Learning Co., of Freemont, Calif.; Davidson & Assoc., of Torrance, Calif.; and Pearson PLC. of Britain.

All are angling heavily for the market, although many of their products have a strong entertainment theme and are not tied specifically to grade school curriculums.

Mr. McDaniels said a goal in developing the new home use software programs will be "to position ourselves as a company that won't sell a school product without a home product equivalent."

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