The Chinese-English language barrier has allowed innovative companies to carve out niches in the language learning market. The arbitrage of English and Chinese, in particular, can be a lucrative practise.
One company that’s been doing this for awhile is Praxis, which runs Chinesepod out of Shanghai. Chinesepod is a podcast and website that teaches users Chinese. The podcast is free, but users pay a subscription fee for extra services. Fees start at US$9 a month for the basic package, which includes access to PDFs of dialogues, to US$200 for a year with all the bells and whistles, which includes daily practice phone calls from a Chinesepod staff member.
I’ve spoken to the Chinesepod team at their cool warehouse office near Xintiandi, and they say they’re profitable (but won’t disclose figures). They’re certainly enthusiastic about the possibilities of ‘language-casting’ (my shorthand for language learning podcasting… which is a mouthful) and have been chatting up partners and investors to expand their operations.
They’ve also assembled a really cool team, pulling in some of the most tech-savvy Sinophiles on the web. John Pasden of Sinosplice is their academic director and David Lancashire of the invaluable Adsotrans is also on their books. Innovation and quality probably won’t be a problem for Chinesepod.
But it’s not just small independent outfits like Chinesepod that are taking advantage of the language arbitrage situation. Nokia recently announced that it would partner with the language learning company New Oriental Group to provide English lessons through its handsets (see this WSJ article). The service, called Mobiledu, was launched May 27. The numbers are compelling: China has the largest mobile phone user base in the world, with 480 million users, and New Oriental estimates the English language learning market at US$2.3 billion last year.
The language barrier, combined with new personal technologies and using the internet as a distribution system, has created a fertile environment for language entrepreneurs. In this situation, The internet both enables and drives demand for learning new languages, while China’s integration in the global economy makes Chinese an increasingly useful business language. Firms like Chinesepod can further take advantage of globalization and the internet by basing themselves in a relatively cheap city like Shanghai while still having access to plenty of talent, both technical and linguistic. A company that offers Japanese lessons, called Japanesepod101, for example, is based Tokyo, which is much more expensive. Peter Galante, who started the site, says they’re not profitable yet, and high costs is one of the factors.
Chinesepod is looking to farm out their model across different languages, and their first target is the huge Spanish learning market in North America. They’ve already started Spanish Sense to this end, and they flew in teachers from South America to make it happen.
So somewhere in Shanghai, South American teachers are recording Spanish lessons that will be blasted across the internet and downloaded into the iPods of students in the United States. Pretty cool!