Tyler Cowen: 'Everywhere Will Be Like the Music Industry'

The music industry, as we all know, has been turned upside down by the new behaviors enabled by the Internet. If you look at recorded music sales alone, the industry has nosedived since the late 90s. But if you take a broader view, we see that people continue to listen to tons of music, go to concerts, and that all kinds of startups are desperately trying to become the new model for the industry.

If George Mason economist and Marginal Revolution blogger Tyler Cowen is right, higher education is about to go the way of the record company. Speaking at the Aspen Ideas Festival, he offered up college as the next in a long line of industries that Internet-enabled innovation is going to scramble.

Look at the music industry. It's been completely overturned by the Internet. My vision of the world is that everywhere will be like the music industry, but we've only seen it in a few places so far. Journalism is in the midst of the battle. And higher education is probably next.

Journalism, of course, has also been turned upside down by the access to information the Internet enables. Newspaper revenue models collapsed in the face of Craigslist and lower online advertising rates. Newspaper editorial models collapsed under pressure from blogs, social media power, and the revenue problems. Magazines have survived, but usually in attenuated form. Television news no longer commands the nation's attention the way it once did. The picture, while exciting for a young digital journalist like myself, is not pretty overall.

As for higher education, David Karpf made a great counterpoint on the Huffington Post about why higher education will not be like music. Unlike the music business, colleges' revenue streams are safe.

Higher education in America faces its share of problems, to be sure. Tuition soars and students are racking up mountains of debt. But the underlying revenue model faces no direct threat. A modern-day Good Will Hunting might gain his education through MIT's online lectures rather than a Boston public library card, but the great mass of privileged 18-year-olds will keep heading off to college. Neither the University of Phoenix nor MIT's online courses offer a replacement for the college experience that students are currently paying for. And competition does not equal disruption.

Of course, the situation Karpf describes will only obtain unless or until a massive cultural change undermines the value of a degree. That seems unlikely now, but one has to wonder about 10 years down the line. Put it this way: if I gave you $100,000 and four years to turn an 18-year-old into a better 22-year-old citizen, scholar, person, and worker, would our current college system be what you'd do with the time and money?