January 8, 2015
Who needs Nate Silver and FiveThirtyEight when we can get “news analysis, data visualizations, commentary and historical context” from the staff of the NYTimes? (Actually, FiveThirtyEight and Nate Silver are still pretty great).
The latest Upshot article that has got me thinking about higher ed (what else) is Neil Irwin’s piece on What Rising Airline Fees Tell Us About the Cable Industry.
The biggest news coming out the Consumer Electronics Show is probably Dish Network’s Sling TV service, a $20 month package offers live streaming of many traditional cable channels (including ESPN and CNN, but not the broadcast networks). Irwin makes the point that the history of airline unbundling demonstrates that TV viewers may be less than happy with the results of cable unbundling.
Airline ticket prices might be cheaper today, but airline flyer satisfaction has been declining. It is annoying to be constantly upsold to premium economy, checked baggage, priority boarding, or a meal during flight. Every flight becomes an exercise in compromise, economic balancing, and envy.
The bundled cable bill may be depressingly expensive, but at least it is simple. Making decisions and keeping track of a myriad of streaming services might get old very quickly for those consumers accustomed to a simple and comprehensive cable service. (Of course, for existing cord cutters such as my family - an option to get Sling TV is a welcome development).
What Irwin does not mention in his piece is how successful unbundling has been for airlines. Ticket prices (for no frills flights) have decreased at the same time that airline industry became profitable. All of these profits, however, are attributable to ancillary services. Without the extra charges for checked bags or seat upgrades the airlines would lose money. And we are not talking about a little money. Last year, the top 10 airlines made over $20 billion. With oil prices dropping the outlook for 2015 is even brighter.
What would unbundling look like in higher ed?
Can we imagine instances where a college or university unbundling some services in order to focus on mission activities makes sense?
What services would be unbundled, and what would need to stay as included in the existing tuition and fees?
The sort of school that I’m imagining would think about unbundling are institutions where both prices (tuition, room and board, fees) are high, but are inadequate to cover costs. Tuition dependent institutions that compete, at least in part, on price. Schools where the ability to lower costs are limited without severely impacting quality (how much deeper can be cut?), but that are also facing sever constraints on the ability to raise prices.
I would actually like to put some real names to these oft-described institutions of higher learning. We hear all the time about the deep problems of tuition dependent, non-highly selective institutions (private, not-for profit), but I’ve never seen a list of these “at-risk” schools. Can you enlighten us?
An unbundled university would probably be as frustrating for students (and faculty) as the unbundled airline is for passengers. Part of the magic of higher ed (at least traditional residential higher education institutions that predominantly serve an 18 to 22 year old market - which I know is a minority of all higher ed students) is the bundled experience. Freshman and sophomores all live in the same dorms. (Buying a super luxury option - beyond maybe a single - is not usually an option). Everyone can workout at the gym. Hang out in the student center. Take advantage of the resources in the learning center. Attend the same performances and guest lectures. Make an appointment with a counselor.
The thought of every non-curricular / extra-curricular activity being subject to a fee is somewhat appalling. A class (a cohort) will no longer have a common set of experiences. Income, rather than energy or talent or creativity, will be the determinant of academic quality of life.
Despite this grim vision, I suspect that unbundling is already occurring on many campuses (please provide your examples), and will be the future of many more.
Unbundling may be the only way that many institutions may be able to address the twin challenges of rising price and insurmountable cost pressures. This unbundling trend, when it comes, will only increase levels inequality across schools and students.
What do you see as the future of unbundling in higher ed?
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