Ads won't fund learning (as we know it)

http://flickr.com/photos/labanex/1572962316/

Following on from our business models discussion, Tony has a really interesting post on some back of a beermat calculations on what you would need to generate from ads to match current revenue for courses. It assumes there is no other income, ie students don't pay fees, no Government subsidy, no additional services, etc. It's a bit hard to follow, so here are a few headlines.

• Current course revenue: 800,000 GBP
• Each 'page' needs to generate 4 GBP
• To make the money back on click through advertising each course page would need 1million impressions per year.
• For an affiliate model we would need every student to click through once on every page over all presentations of the course.

Now, of course, there are loads of assumptions and simplifications in Tony's model, check his original post to see these. But what it does show is that current revenue streams would not really be sustainable on a pure advertising basis, at least as we do it currently.

Now I don't think we ever thought they would be, but it's good to get some figures against it. So, let's pretend Governments stopped funding Higher Education tomorrow, how would we fund it?

Here's some thoughts:

• It would be a hybrid model
• There would be 'education classic' - ie you get the same as you do now but parents/employers pay for all of it
• There would be disaggregation of the services - you pay for some content, so
  It would likely feature some selling of additional services (assessment, support, etc)
• Ironically it might make the need for free content stronger - because you need to assemble courses quickly

But most of all it would mean we don't do education like we do now. This is the big (and necessary for his purposes) assumption in Tony's post - that new forms of return need to equal current ones. If Government funding disappeared then so would many academic jobs and functions. Education would become much leaner, so who knows, maybe the ad model could fund this new stripped back model. The question then would be who would want to work in such a system?

I have visions of an 'academic call centre' with bearded profs answering phones to queries on Heisenberg while an aggressive 18 year old manager prowls the floor, barking out admonishments:

"Russell, stop smoking that pipe!"
"Dawkins, you've been on that call for two minutes, if they haven't got evolution by now, hang up."
"Everybody - three minute journal break, then back at your desks."

If we didn't know it already, Tony's post highlights that education doesn't come cheap, particularly the sort of education system educators would want to work in.

Comments

[Laura]

I love your vision of an academic call centre. Reminds me of the book Degrees R Us...

[AJ Cann]

Same as it ever was. Education is a service, not a product - we're not selling a kilo of Geography. So we would charge for service provided. Models to look at: Vodaphone, Virgin Media, Channel 4?

[Martin]

Sorry Alan, I don't think it's the as it ever was. Maybe that was true in the 80s, but people don't sell a kilo of feng shui consultancy either, but they know how to make a business out of it. We live in a service economy now, and as you say, education can be seen as a service, so education can be seen as something that is much more susceptible to commercialisation than it was, particularly if one thinks of it as an e-service. And one of the models of funding ebusinesses is through adverts.
I agree though that it is unlikely to be just adverts, and the Vodaphone model of say, charging for subscription to a service plus additional ones is more likely.

[AJ Cann]

UK Universities have been acutely aware of media profiles, competing for market share, etc for years. We're selling a service, just the same as Oxford or Cambridge, or indeed the BBC. Advertising is clearly not a viable revenue stream.

[Martin Le Voi]

It seems to me that what Universities have is a charter to award degrees. In the end, all that makes us stand out from other *content* providers is that we are licensed (and have the expertise) to run assessments and award degrees. I see the trend to content becoming cheaper and cheaper (if you look at an OU course, the physical content really is worth at most £50-£100, if you were to buy it commercially as books and DVDs), what we sell is professional assessment and a reputation for fair assessment. If the latter is ever *seriously* doubted, any university is in deep trouble...

Martin

[AJ Cann]

God, that's a depressingly businesslike view of education. Whatever happened to intellectual curiosity? If we cave in to this sort of view, who's educating the next generation of academics?

[Tiago Neves]

For me, the vision presented in this post is a bit too pragmatic, leading on the disenchantment of the world (and not only the academic world).