Over the last decade, the disruption of the traditional higher ed model has been often compared to other “content” and “distribution” industries upended by technology and new entrants: newspapers, publishing, music, and Hollywood.
It’s that last industry—television and movies—that I’ve been thinking about in recent weeks after hearing former Disney CEO Bob Iger talk with Kara Swisher at the Code conference (you can watch the full interview here).
As Swisher recalled during the interview, it was Iger who predicted way back in 2005 that technology—and at that time he was thinking the web, not mobile—would significantly disrupt the distribution of traditional television and movies, if not eventually their content business, too. “If you can’t beat them and you can’t join them, why not view them as potential partners and find a position to play,” Iger said, in talking about the companies that moved into Hollywood—Apple, Netflix, and Amazon.
What those companies and others did over the last decade-plus is introduce a new reality for linear media. No longer was media consumption limited to “shelf space” in a set schedule, Iger said. That concept of “shelf space” is one my own kids still have difficulty understanding because they never had to live under a model where media consumption was limited by “channels” on a “schedule.” (Remember when TV Guide arrived in the mail weekly.) Nor does Gen Z live in a world where studios release movies in theaters and then take them away for weeks or months before you can buy or rent physical copies of a DVD (and VHS before that).
Streaming changed linear consumption for Hollywood, much like it did for the music industry after the iPod was introduced in 2001, and much like web browsers before that in 1995 shifted the linear nature of newspaper consumption.
But in the interview with Swisher, Iger was careful to distinguish between content and distribution.
As he said, traditional television “is marching to a distinct precipice, and it’s going to be pushed off,” especially those entities that own the pipes and nothing else. While at Disney, Iger focused on building up its intellectual property—the content—which is one reason during his tenure the company spent big money to acquire Pixar, Marvel, and Lucasfilm.
As I listened, I wondered what is the IP of a college or university? Is it the professors? Is it the curriculum? Is it the residential experience? Or is it some combination of those and more? A good exercise for institutional leaders and their boards to engage in right now is to identify their true IP to understand what they really “own” and what makes them distinctive. And then like Disney—and now Netflix, Apple, and Amazon—can they create more of that IP (without saturating the market, which of course is happening in the streaming industry now)?
Like Disney, however, higher ed can’t just focus on the content IP. It must also focus on distribution. In the beginning, Iger explained, Disney partnered with Apple and Netflix to distribute its content before launching Disney+. Right now, most colleges and universities own their own distribution channels by delivering education on campus and sometimes online.
But as new players and upstart legacy providers continue to reshape the higher ed market and own emerging distribution channels, colleges and universities would be wise to build their own pipes—or more likely partner before these channels are totally closed off to them and they end up like the legacy cable companies.
Here are two examples of emerging distribution “channels” in higher ed: employers and online. (Compared to traditional face-to-face education, I’ll still describe online as “emerging”).
Increasingly, employers are partnering with third-party providers like Guild Education, EdAssist, and InStride, which manage their tuition benefits and come to largely own the distribution relationships between companies and institutions. In the distance-education space, we have online program managers, or OPMs, which facilitate a university’s move online (to learn more about OPMs, listen to this explainer episode of the Future U. podcast). A few institutions, like Western Governors University (WGU), Arizona State University (ASU), and Southern New Hampshire University (SNHU), manage their own distribution channels.
What’s clear in the online space is that at least in the adult student market (where online education started), some of the biggest players—WGU, ASU, SNHU, etc.—own both the content and the distribution channels (see McKinsey graphic below where the universities I just mentioned are on the right and toward the upper side of the graphic).
The question is as more students—traditional age, adults, lifelong learners—take more online whether the established players have an advantage in attracting them? (This article in Inside Higher Ed earlier this week suggests those big online players do have an early advantage with traditional undergraduates).
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