May 19, 2008
Colleges Must Shake Up Their Business Models to Counter New Competition Online, Former FCC Chairman Says
America’s leading colleges and universities must “embrace massive experimentation” to stay competitive as more and more educational choices become available thanks to the Internet, said Reed Hundt, former chairman of the Federal Communications Commission and a senior adviser on information industries to McKinsey & Company, during a conference late last week on the future of the Internet.
“What happened to the recording industry is what is happening to the newspaper industry,” said Mr. Hundt, referring to the financial troubles of many music labels and newspaper companies now that songs and news stories can be found free online. “And what’s happening to the newspaper industry will probably happen to elite universities.”
In an interview after the session, The Chronicle asked him to elaborate. “The music industry had the following view, ‘We’re going to package these songs, maybe you’ll like one of the songs a lot but the rest will be our way,’” he said. In a similar way, colleges are saying to students: “You take these 25 courses, we’re going to give you a degree — some of the courses you’ll really like, others you won’t but we’re telling you what you have to do.”
Now that professors are putting course lectures online and new for-profit colleges are emerging, he said, students may soon ask themselves why they have to do things the old way. “That basic model is under assault when you create so many different channels of supply, and when you create so many ways for the audience to reach the suppliers,” he said.
He said that judging by the amount of money that institutions like Harvard University (where the conference took place) have building up in their endowments, it seems that campus leaders have not yet figured out what the next big investment should be in their future. “They haven’t decided how to redefine their mission for the 21st century,” he said. —Jeffrey R. Young
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I certainly agree with the final paragraph — universities don’t know where they’re headed — but Reed Hundt’s characterization of the overall problem is confused. The record companies and newspapers have one set of issues; the education “industry” has another.
Unlike the people who buy records and rags, our customers — students — require not only what they like but also what future employers like — credentials, for one thing, as well as boring courses in composition, accounting, foreign languages, and computing, for another. All that will continue to be important no matter what the delivery mechanism.
As with newspapers and record companies, the universities that survive the competition for customers will eventually get rid of their versions of boilermen and blacksmiths. American and European schools will also greatly diminish or throw away such outmoded concepts as classroom teaching and tenure and focus their efforts on the real market. In alphabetical order, that would be: Africa, Asia, Latin America, and, until the oil runs out, the Middle East.
In the very near future, I predict, wistful intellectuals will be thrilled to find even Rod McKuen poetry on the World Wide Web. Most Internet bandwidth will be consumed by the customers of newly converted industries hungry for news and tunes and meal tickets.
— S. Britchky May 19, 06:40 PM #
Now that it is possible to sit at home and complete a degree course, thanks to Internet, is it enough that a youngster confines himself to the monitor? Human interaction skills which also we learn at colleges are important. Not all activities can be done through computers, as in a factory where workers and robots will have to work together to churn out products. In short, while theory could be well studued in a computer way, extensive internship will be a must.
— N T Nair May 19, 10:32 PM #
It is the beginning of a long slow twisting in the wind for many of the lumbering land grant universities and small private colleges. The Internet and Web-based comet hit the U.S. about ten years ago or so and changed the face of higher education delivery going forward. For-profit universities that are publicly traded are now midcap stock entities worth several billion dollars and rising without much if any debt. Additionally, they have no wringing hands held out for large campus maintenance needs with dwindling taxpayer dollars. The ‘baby boomers’ big spending era is essentially over along with home associated millage funds in state coffers.
Nevertheless, there will always be a place for traditional classroom learning, internships and the like, but that is gong to level off in the 25-40% range of total courses. The tenured ranks will continue to thin. Student consumers want convenience and modern access alternatives in the 21st century rather than set times for classes, constant commuting cost escalations, and comfortable day schedules for professors.
The technical and global revolution affecting university course delivery has just begun. Most of the ‘chalk and talk’ courses that remain shall be found later in the historical sediment layers and artifacts well above the dinosaur bones. Time to technically adapt colleagues, at least to some degree for career survival.
— Thomas May 20, 12:43 AM #
Um, yes.
— Jeff McNeill May 20, 01:06 AM #
Rising energy costs associated with commuting to classes, as well as those associated with supporting a traditional resident student population, will undoubtedly make on-line higher education opportunities increasingly more attractive to students and to institutions, alike. The cost of higher education is already through the roof due primarily to competitive physical plant upgrades and expansion. The virtual campus is as inevitable as a $200 barrel of crude and the eventual extinction of the middle class SUV. Telecommuting faculty and virtual administrators are already here! An increasing number of young people seem to prefer sitting at home in front of a computer over enjoying the outdoors and engaging their peers in social activities. (Sad, but true!) The new market is forming rapidly. The strong and adaptable institutions will survive. Others will go the way of the typewriter.
— John May 20, 07:44 AM #
They’re comparing apples to oranges. A degree program is an organized set of courses with specific objectives, covering a defined set of knowledge and skills. Students can’t just randomly pick what classes to take. They won’t end up with a specific degree.
I do, however, agree that distance education will continue to grow. It will not entirely replace the traditional classroom, but like many technologies will simply compliment what already exists. Currently there is a surge of interest in distance education to reach more students. This will level off as we all move in this direction and compete for the same student pool.
— Odin May 20, 08:25 AM #
Hundt incorrectly, I think, lumps higher education into the information industry. Higher ed is, rather, in the learning-certification business — that is, certifying that its graduates know or can do something. In that realm, higher education remains the leader of a privileged oligopoly of providers — a list that hasn’t changed much in the past 50 years. In some disciplines, higher education competes with professional associations, corporate learning companies, and even software vendors to certify learning. Meanwhile, in “higher-order” thinking and analysis, traditional higher education still has no peer, even among the upstart for-profits.
— eb May 20, 08:41 AM #
As though colleges’ and universities’ only role is undergraduate learning—higher ed serves communities, states, the country and the world through research and service as well—much of this could never be done on-line. And what of the “community” of the ugrad? Where will adolescents grow up if not in dorms, and appts, and classrooms, and the library, and the local bar and sporting events? Give me a break…
— CTH May 20, 08:58 AM #
I can see on-line courses successfully replacing massive lecture halls, but many courses function better with a physical presence, whether fostering active discussion or allowing hands-on lab work.
The institutions that will be pressured most are the ones that treat undergrads as peons. The ones that actually offer some benefit from physical presence (such as including hands-on lab work for freshmen) will feel much less of a squeeze.
— a different Dan May 20, 09:03 AM #
Music and newspapers are non-interactive. Colleges, particular the elites, are interactive, interpersonal, and immersive in a way that only the blindest Second Life zealot could imagine the internet to be. Yes, online alternatives will grow, but not at the expense of the elites.Mostly the market will grow.
— Mark May 20, 09:32 AM #
We are comparing apples and oranges here. The recording industry and newspaper industry are not higher education, and it’s illogical to make this analogy. Perhaps we should make the luxury automobile one instead. Mercedes will always have a share of the market because there will always be people for whom Toyota isn’t what they want. Ditto for Yale and State University. This is precisely the reason why the elites never go under and, indeed, continue to flourish.
— Eric May 20, 09:39 AM #
I’ve been involved in online higher education since 1996, at public universities. I have also sat at employer education fairs with reps from for-profit institutions and I know colleagues in the for-profit sector. What most analysts of the for-profit sector overlook is that those “schools” cherry-pick the curricula that are least dependent on physical facilities. U of Phoenix is not building science labs—they send their baccalaureate students to public institutionst for their general education. In that sense, public institutions and the taxpayers who fund them are actually subsidizing a chunk of the for-profit sector. Those pieces of higher education that are best adapted to the virtual environment are also those that require the least extensive physical infrastructure. Online education is here to stay—and to grow—but bricks-n-mortar will continue to have a role, too.
— pwherry May 20, 09:55 AM #
You mean distance education will continue to grow? You mean the internet is not a fad? Is this story really news?
— Ram May 20, 09:59 AM #
“Living is easy with eyes closed
Misunderstanding all you see”
This John Lennon quote is what came to mind when I read many of the previous comments.
Technology is changing higher education. Get used to it folks. “The times they are a changin’.”
Higher education, in its current form, is not providing what students want or need. Who says a college education has to be linked to traditional chalkboard classrooms and university bars. Imagine taking classes while you travel around the world. Imagine low income students being able to get an education because they won’t have to quit their job at home and find themselves unemployed in that “college town” that offers very little opportunity.
I could go on, but perhaps I should have stopped at the Bob Dylan quote.
— D.Lee Beard May 20, 10:12 AM #
I’ve been in higher ed since 1980, and I’m convinced that much of its value comes through the socialization of young people as they mature. After all, they’re @18 and mostly immature when they enter college. That’s not to say that academics are not important, but the socialization role is usually overlooked. Distance ed works great for those students who are more mature and who are self-starters, meaning that it does NOT fit everyone. Many students are better off in a physical campus environment while they mature – or they should bypass college and come back to it when they’re ready.
I work in distance ed and I’m highly aware that universities still need to accept the fact that students are customers, not chattels they can order around. Mature students know this and they are assertive about their programs. Aside from a few disciplines where physical presence is mandatory or nearly so, students can shop around for their degree, and they are often willing to do so. The biggest advantage established institutions have in that market is that their names are recognized. Yes Virginia, sometimes it’s good to have a football team.
— Al May 20, 11:03 AM #
In reference to Al’s comment, students may be consumers but they are not customers in the traditional sense. Graduates of universities (online or traditional) are a product and if the quality of that product diminishes then the folks who purchase that product (employers) will have to look to other means to fill their needs. The problem with undergrads is that, although they may know what they want, many don’t yet know what they need in an education (those boring accounting and composition classes that someone mentioned already).
— Jay May 20, 02:21 PM #