Are Universities Going the Way of CDs and Cable TV?

Like the entertainment industry, colleges will need to embrace digital services in order to survive.

Martin Parr / Magnum

After the coronavirus upended American life, millions of college students made the transition from sitting in campus lecture halls to live-streaming seminars at their kitchen tables. Do students think their pricey degrees are worth the cost when delivered remotely?

The Wall Street Journal asked that question in April, and one student responded with this zinger: “Would you pay $75,000 for front-row seats to a Beyoncé concert and be satisfied with a livestream instead?” Another compared higher education to premium cable—an annoyingly expensive bundle with more options than most people need. “Give me the basic package,” he said.

As a parent of a college-age child, I’m sympathetic to these concerns. But as a college professor, I find them terrifying. And invigorating.

Why terrifying? Because I study how new technologies cause power shifts in industries, and I fear that the changes in store for higher education are going to look a lot like the painful changes we’ve seen in retail, travel, news, and entertainment.

The example of the entertainment industry, which I’ve written about extensively, is instructive. Throughout the 20th century, the industry remained remarkably stable, despite technological innovations that regularly altered the ways movies, television, music, and books were created, distributed, and consumed. That stability, however, bred overconfidence, overpricing, and an overreliance on business models tailored to a physical world.

Trouble arrived early in the 21st century, when upstart companies powered by new digital technologies began to challenge the status quo. Entertainment executives reflexively dismissed the threat. Netflix was “a channel, not an alternative.” Amazon Studios was “in way over their heads.” YouTube? No self-respecting artist would ever use a DIY platform to start a career. In 1997, after one music executive heard songs compressed into the MP3 format, he refused to believe anybody would give up the sound quality of CDs for the portability of MP3s. “No one is going to listen to that shit,” he insisted. In 2013, the COO of Fox expressed similar skepticism about the impact of technological change on his business. “People will give up food and a roof over their head,” he told investors, “before they give up TV.”

We all know how that worked out: From 1999 to 2009, the music industry lost 50 percent of its sales. From 2014 to 2019, roughly 16 million American households canceled their cable subscriptions.

Similar dynamics are at play in higher education today. Universities have long been remarkably stable institutions—so stable that in 2001, by one account, they comprised an astonishing 70 of the 85 institutions in the West that have endured in recognizable form since the 1520s.

That stability has again bred overconfidence, overpricing, and an overreliance on business models tailored to a physical world. Like those entertainment executives, many of us in higher education dismiss the threats that digital technologies pose to the way we work. We diminish online-learning and credentialing platforms such as Khan Academy, Kaggle, and edX as poor substitutes for the “real thing.” We can’t imagine that “our” students would ever want to take a DIY approach to their education instead of paying us for the privilege of learning in our hallowed halls. We can’t imagine “our” employers hiring someone who doesn’t have one of our respected degrees.

But we’re going to have to start thinking differently.

(Martin Parr / Magnum)

Information technology transforms industries by making scarce resources plentiful, forcing customers to rethink the value of established products.

In the entertainment industry, major studios, publishers, and music labels maintained their power by controlling the scarce equipment and studio space necessary to create content, the scarce channels necessary to distribute content, and by using copyright law to create an artificial scarcity in how consumers gained access to content. Then a new generation of digital technologies made those resources plentiful, causing consumers to start asking discomfiting questions. Why pay CD prices for iTunes downloads that can be reproduced at zero cost? Why keep cable when so many movies and TV shows are available in less expensive and more convenient digital formats?

An analogous situation prevails in higher education, where access to classroom seats, faculty experts, and university diplomas have been scarce for half a millennium. When massively open online courses first appeared, making free classes available to anyone with internet access, universities reflexively dismissed the threat. At the time, MOOCs were amateuristic, low-quality, and far removed from our degree-granting programs. But over the past 10 years, the technology has improved greatly. And this past semester, the coronavirus pandemic transformed distance learning from a quaint side product that few elite schools took seriously to a central part of our degree-granting programs. Arguments for the inherent superiority of the residential college experience will be less convincing now that we’ve conferred the same credentials—and charged the same tuition—for education delivered remotely.

I need no convincing of the value of campus life and in-classroom education. I recognize that online platforms can’t perfectly replace what we deliver on campus. But they can fulfill key pieces of our core mission and reach many more students, of all ages and economic backgrounds, at a far lower cost. What online services lack in quality, they make up for in convenience—and as they get more popular, they’re only going to get better, which in turn could unbundle the prevailing model of higher education.

Indeed, that unbundling is already happening. Employers such as Google, Apple, IBM, and Ernst & Young have stopped requiring traditional university degrees, even for some of their most highly skilled positions. Inevitably, as employers embrace new skills-based certifications, many students may question the value of the traditional four-year degree. Even some of the best college instructors are taking their talents to new online platforms—and developing their own brand identities, distinct and independent from their home institution.

These shifts are all key components of a core feedback loop supporting colleges and universities. Students pay a premium to go to the best colleges so they can receive instruction from the best faculty—and job offers from the best employers. Faculty seek out campuses where they can find the best students, the greatest financial resources, and research engagement from top companies. Employers are attracted to colleges where they can recruit the best students, with the most up-to-date knowledge, delivered by the best scholars. We are now witnessing technology simultaneously disrupt each part of that loop.

This transition is likely to appear first in technical degree programs, where it is relatively easy for students to certify their skills online, there is high demand from employers, and there are plentiful courses from professors at top universities. It is also likely to impact master’s programs before bachelor’s programs, because many working professionals seeking to shift careers don’t have the time or resources for full-time, residential programs. Private universities may be affected before public institutions—which will be shielded, at least initially, by lower prices and the ability to leverage taxpayer support. But this transformation won’t stop with technical master’s degrees at private institutions. Ultimately, its influence will be felt at every level in the academy, and across nearly all degree programs.

So where does that leave us? As educators, we must constantly question how well we’re serving our students. To put it in starkly commercial terms—what’s our customer value proposition? We tend to get confused when we think about this question. Our industry has been so stable for so long that we’ve conflated our model with our mission. And no question about it: Our model is under threat. As we’ve seen in other industries, technology will change how we work—and that process will hurt.

Despite how terrifying these changes are, I’m convinced that they will ultimately be an invigorating force for good.

What is the core mission of higher education? That’s the question we need to ask right now. In my view, the answer is simple: As educators, we strive to create opportunities for as many students as possible to discover and develop their talents, and to use those talents to make a difference in the world.

By that measure, our current model falls short. Elite colleges talk about helping our students flourish in society, but our tuition prices leave many of them drowning in debt—or unable to enroll in the first place. We talk about creating opportunities for students, but we measure our success based on selectivity, which is little more than a celebration of the number of students we exclude from the elite-campus experience. We talk about preparing students for careers after graduation, but a 2014 Gallup survey found that only 11 percent of business leaders believed “college graduates have the skills and competencies that their workplaces need.” We talk about creating diverse campuses, but, as recent admissions scandals have made painfully clear, our admissions processes overwhelmingly favor the privileged few.

What if new technologies could allow us to understand the varied backgrounds, goals, and learning styles of our students—and provide educational material customized to their unique needs? What if we could deliver education to students via on-demand platforms that allowed them to study whenever, wherever, and whatever they desired, instead of requiring them to conform to the “broadcast” schedule of today’s education model? What if the economies of scale available from digital delivery allowed us to radically lower the price of our educational resources, creating opportunities for learners we previously excluded from our finely manicured quads? Might we discover, as the entertainment industry has, a wealth of talented individuals with valuable contributions to make who just didn’t fit into the rigid constraints of our old model?

I believe we will, but that doesn’t mean the residential university will go away. Indeed, these changes may allow universities to jettison “anti-intellectual” professional-degree programs in favor of a renewed focus on a classical liberal-arts education. But as this happens, we might discover that the market for students interested in spending four years and thousands of dollars on a broad foundation in the humanities is smaller than we believe—certainly not large enough to support the 5,000 or so college campuses in the United States today. Soon, residential colleges may experience a decline similar to that of live theaters after the advent of movies and broadcast television. Broadway and local playhouses still exist, but they are now considered exclusive and expensive forms of entertainment, nowhere near the cultural force they once were.

But remember, just because new technology changed the way entertainment was delivered doesn’t mean it impeded the industry’s underlying mission. Instead of destroying TV, movies, and books, new technologies have produced an explosion in creative output, delivered through the convenience, personalization, and interactivity of Kindle libraries, Netflix recommendations, and Spotify playlists. Despite—or maybe because of—the digital disruption we’ve recently lived through, we’re now enjoying a golden age of entertainment.

Whether we like it or not, big changes are coming to higher education. Instead of dismissing them or denying that they’re happening, let’s embrace them and see where they can take us. We have a chance today to reimagine an old model that has fallen far behind the times. If we do it right, we might even usher in a new golden age of education.