How universities add value in the digital age – lessons from the music industry

Music is a product that can be digitised, distributed and shared very easily and at little or no cost. This has meant that the industry has had to adapt to the digital age more rapidly than most, and is keenly watched for clues as to where others will go. There are undoubtedly lessons for education to draw from the music industry, as well as profound differences (Weller, 2011). However, there is one very intriguing parallel. At one time, you could only get an education at a university because that was where the experts and the manuscripts were, just as you could only listen to music if you went to a live performance. The development of the printing press and of recorded music respectively dealt a blow to both of these models, though certainly not a fatal one. However, we have now entered a world where knowledge in many forms, as well as music can be accessed easily and often for free. In this world, how will musicians, writers and lecturers be paid, and what is the fate of the institutions that support them?

There are a number of intriguing experiments in the music industry aimed at finding a new business model. These attempts are generally being lead by companies which are start-ups, or new to the industry. The traditional record companies have not been able to take the initiative on this, and the retailers who historically sold recorded music have not made the transition to the new world particularly successfully. Traditional educational institutions have so far fared better, but perhaps Spotify, Napster ,Last.fm and iTunes are paralleled by Coursera, Udacity, Khan Academy and Pearson in the world of education.

So how can the music industry adapt and can it show useful avenues for education? Online music services are a recent development and so research on them to date is limited, but one study of users of Last.fm is suggestive. Oestreicher-Singer and Zalmanson (2013) analysed customer data from the music service Last.fm. The company provides music listening services and also offers social features. The business model is a freemium one, whereby music and basic functions can be accessed for free. Those willing to pay a small subscription get an improved service, removal of advertisements and enhanced social features. As with most sites of this nature, subscriptions represent a far more profitable revenue model than advertising, and the authors were investigating the factors most likely to encourage users to subscribe.

On this point, the data was unequivocal:

“…community activity is more strongly associated with the likelihood of subscription than is the music consumption itself, and community leadership is more strongly associated with the likelihood of subscription than is mere community participation.”

In other words, the main value is derived from participating in the community, not from the content itself. The authors draw out the implication of this finding as follows:

“The adoption of this digital business strategy and its value proposition transforms the main role of the firm from providing content to establishing content-related and IT-enabled social experiences for its users…”

This emphasis is echoed by Spotify, the largest music streaming company. One of the board members at Spotify is Sean Parker, co-founder of Napster and early investor in Facebook. His vision has been described as follows:

“…an online world, driven by social interactions, where there’s better music made, and distributed at lower cost, because the music will find its audience more efficiently.” (Dean, 2013)

We can attempt to apply these insights to education as follows:

  1. Provision of content has little or no value. In some respects, this means that the battle for open education resources is already won (Weller, 2013). A great deal of educational resources are available for free, including some very high quality ones, so simply providing more adds little value. Universities can supply libraries, lectures and written materials if they like, but increasingly no one will be willing to pay for them.
  2. Curation of content may have some value. The sheer volume of information available can be overwhelming, so a trusted “filter” can be helpful. In essence, this is the role of textbooks, reading lists and curricula. These are often provided as open education resources, can be helpful, and can probably be charged for in some cases, but even these filters are often available for free, via the MOOCs, for example.
  3. Universities have a specific value-adding role in assessing and accrediting learning – for now. In the UK, universities have a monopoly on the award of degrees, which is highly valued by students and employers, based on the reputation of the university and the regulations around awards. However, the role of assessing learning is in principle divisible from the learning itself. Coursera are already charging for assessments that can count towards college credit at a much lower price than college courses (Coursera, n.d.). Over time, the financial logic will surely drive providers to assess and accredit learning separately from the act of learning.
  4. The greatest value lies in provision of social experiences. This does seem to make sense in the context of education – it is the experience of direct interaction with instructors and other students that can provide learning that is not easily achieved in other ways and create value – value which someone will be willing to pay for and which provides a model for financial sustainability.

If value really comes from providing social experiences, then perhaps that is good news for the existing higher education institutions, because that is one of the things they can and do provide. The MOOCs attempt to provide social experiences too, of course, via large discussion boards, so the universities will have to stay ahead of them. However, the challenge for educational institutions is this – are they focusing most of their resources on providing a positive social experience for students? Or are resources tied up in other activities which do not relate to this? Are students simply grouped into classes, or discussion boards and expected to get on with it, or are those valuable social experiences encouraged and facilitated? My guess is that the really successful teaching universities in the future will be those whose focus is on the social experience that facilitates learning and adds real value.

References

Coursera (n.d.) College Credit Recommendation Guidebook [online]. Available at https://www.coursera.org/signature/college-credit-guidebook (accessed 1 February 2014).

Dean, J. (2013) ‘Let a Billion Streams Bloom’, Fast Company, November [online]. Available at http://www.fastcompany.com/3018622/let-a-billion-streams-bloom (accessed 5 January 2014).

Oestreicher-Singer, G. & Zalmanson, L. (2013) ‘Content or Community? A Digital Business Strategy for Content Providers in the Social Age’, MIS Quarterly, vol. 37, no. 2, pp. 591-616.

Weller, M. (2011) The Digital Scholar, London, Bloomsbury Academic.

Weller, M. (2013) ‘The battle for open – a perspective’, Journal of Interactive Media in Education, Nottingham OER 2013 special issue [online]. Available at http://www-jime.open.ac.uk/jime/article/view/2013-15 (accessed 20 December 2013).

Advertisements

Leave a comment

Filed under H818 The Networked Practitioner

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s