College — now brought to you by Comcast!
The potential for media conglomerates to operate fully fledged colleges, or even primary schools, is all too real. Welcome to a strange new world.
Prediction
Within the next five years a major media company, such as Walt Disney, Comcast, or Facebook* will attempt to either create, buy outright, or form a substantial partnership with a small for-profit college. This scenario might sound far fetched, but this strange future may be closer and more real than educators or students can imagine.
Envisioning such a school is not difficult. Education publishers, such as Pearson, McGraw-Hill, and Scholastic have been producing education media for decades and in some cases for more than a century. Textbook publishers and education media firms sell their material to schools, collecting billions of dollars annually from tax-payers. Media companies outside of the traditional education publishing sphere have been attempting to enter this marketplace over the last 20 years. These outside media companies (whether it’s Reuters News, Viacom or YouTube) either directly create, purchase or collect copious amounts of content every year. Portions of that content pool could be easily classified as education media and then repackaged as learning material.
In many cases media conglomerates have already sold material to schools and students. Disney operates a small education division, Rupert Murdoch’s News Corp. briefly owned education technology firm Amplify, and Discovery Cable Networks hoped to make a profit with a variety of online learning materials before selling most of their education division earlier this year. If these companies can sell media directly to students and taxpayers what has stopped them from creating and operating fully fledged schools?
Hurdles to Corporate Media Ownership
For media companies there are currently several hurdles to creating a fully functioning, independent school outside the traditional public (or even private) education space. The first hurdle is cost — creating and operating a traditional brick and mortar school costs a lot of money. Budgets are easily eaten up by the building of physical schools, payroll for teachers and staff, and operational costs. Charging high tuition rates can resolve this, but then you are essentially just recreating a private school without leveraging your most valuable asset — your media content.
Once budgets are blown on school operations there is slim margin for profit, this profit margin creates another disincentive for media companies to invest in education: the return on investment is typically low. Education is largely a public enterprise because only government taxes can generate the level of capital needed to build, operate and sustain a school district. Companies once wholly unrelated to education would need to take on sizable risk in order to enter the primary or higher education spaces.
Perhaps the highest hurdle for education companies that might dare to move from content provider to school operator is regulation. At the local, state and federal level schooling in the United States is guided by a plethora of regulatory laws. Primary and secondary schools are controlled at the local level, often via publicly elected school boards, funded at the local and state level and guided by federal and state education laws. Colleges and universities in the US operate under both federal law and typically at least one accreditation authorizer. If colleges take federally backed loans (most schools can’t survive without doing so, including for-profit schools) there is an even stricter set of regulations and by-laws they must adhere to in order to stay open and teach.
Current Education & Media Technology Trends
These relatively high barriers to operating a school are quickly being lowered thanks to several continuing and newly arriving trends in education and media technology. Three of these trends may converge in the near future to allow corporate media to operate colleges, secondary and even primary schools:
- Online schooling continues to expand at all levels of instruction.
- Student tracking is now mimicking online marketing tracking.
- Lax regulatory regimes open the door to greater private investment.
By breaking down those three trends we can see where media conglomerates might enter the market and create their own for-profit schools:
Online Learning Expansion
Online learning and Internet technology assisted schooling is a big business and is expected to grow even bigger. Some estimates have the “global e-learning” market set to grow by over 7% annually over the next 5 years, increasing in size by more than $100 billion US dollars in revenue. According to the National Education Policy Center the number of US K-12 students learning fully online or in blended settings is around 400,000. And colleges are continuing to add more diverse online degrees, including degrees that have been thought of as difficult to teach outside a physical campus setting such as law and medicine graduate degrees.
Online education dramatically cuts down on the overhead costs of schooling because physical buildings do not have to be built, less labor in the form of in-person teachers is required, and many administrative tasks can now be automated. Primary education has seen the wide spread adoption of comprehensive Learning Management Systems such as Canvas, Blackboard, and Schoology. Through LMSs a multitude of classroom and school wide administrative tasks can be managed and in some cases completely automated. The large scale expansion of online learning may lead investors to believe that traditional schools could be easily replaced with for-profit schools controlled by content rich media companies.
Student Tracking & Marketing
Several years ago when Sal Khan, creator of Khan Academy, wanted to develop and launch a brick and mortar school he wanted the school to be dedicated to student tracking. He envisioned a school where every quantifiable value connected to a student is recorded in digital form, from attendance to student self- assessment for assignments big and small. Today the school (the Khan Lab School) does track students, but perhaps not to the degree to which Khan originally envisioned. Khan’s idea was a forerunner to the tracking now taking place via LMSs and Student Information Systems (SISs) at the primary, secondary and collegiate levels. Higher education’s use of student tracking has been particularly celebrated thanks to the creation of better student outcomes. For the past several years Georgia State University has been utilizing student tracking to intervene when a student falls behind or fails to meet expectations. The results of this tracking have been largely positive and on-time graduation rates have increased.
This form of tracking is not unlike the tracking that takes place when you surf the Internet. Via snippets of computer code called cookies marketers follow our every move as we shop online, search the web, and even message our friends and families. Marketers use that data to sell you consumer goods and that consumer data is extremely valuable to retailers, financial firms, and even political groups. If media companies were allowed to record student data collected in a school setting they could sell that information to marketers. To some degree this form of selling is already happening. This additional revenue stream for media companies would undoubtedly make school operation a very profitable venture.
Relaxed Regulation
Besides the prohibitive cost associated with operating a school another barrier to corporate media ownership is public control of schooling. But that barrier is becoming more permeable everyday largely thanks to relaxed regulatory regimes at the federal level. Successive education department administrations have encouraged corporate investment in education, albeit in two very different ways.
First, President Obama and Education Secretary Arne Duncan incentivized corporate involvement in education by creating a media technology focused office inside the Department of Education. The ConnectEd Program and the Office of Educational Technology encouraged investment from private technology firms, Internet service providers, education focused organizations and media outlets. The program received sharp criticism from education advocates who believed the program was an ill conceived waste of money.
Secondly, the current Department of Education Secretary, Betsy DeVos, has increased corporate power in education by either rolling back or delaying regulation designed to limit the power of for-profit education firms. One regulation that is currently under review was originally designed to create greater accountability in college accreditation. DeVos is uniquely unqualified to challenge corporate education money due to her family’s previous investments in for-profit education. DeVos’ has also backed media technology focused “school choice” initiatives (such as online charter schools) regardless of their abysmal student outcomes. These deregulation measures put public schools at a disadvantage and open the door to more corporate investment.
The Future
The advent of media run schools will likely first take place in the higher education sector because the structure of higher education in the US already allows for more private investment than the k-12 sector. We’ve seen large scale corporate operation of schooling ventures before now with media technology firms offering vocational training. The first wave of for-profit post-secondary schools occurred after World War II. For-profit schools popped up across the US to train GIs coming back from Europe and the Pacific. Some of those schools were operated by media technology firms such as RCA. Today, vocational and skill specific training is increasingly handled by for-profit tech schools, credential focused learning platforms (such as Lynda.com) and Silicon Valley backed “boot-camps” such as General Assembly.
The RCA schools, renamed Technical Career Institutes or TCI Colleges in the 1970s, were eventually shut down in 2017. The TCI shutdown occurred two years after a New York City consumer agency investigation claimed that multiple for-profit colleges, including TCI, were conducting questionable operation practices. The outcome of that investigation is perhaps an ominous harbinger of what we can expect from hypothetical media company run schools.
Last week, in a sign that media controlled schools are closer than we might imagine, Amazon CEO (and the world’s richest man) Jeff Bezos announced the One Day Fund initiative. The fund will focus on two main objectives: fund education projects Bezos’ education philanthropy foundation already partners with and create a network of preschools in low income areas. In his announcement Bezos refers to students as “customers” and said that the initiative would be developed via the same strategies guiding the Amazon company.** The vague announcement did not go into details on how the fund would be operated or how communities would be involved in the schools. According to Bezos the schools would supposedly be new, non-profit and inspired by Montessori education. Bezos’ Amazon has previously dabbled in digital education and currently holds a lucrative public school supply contract. Is Bezos creating a model for for-profit media controlled schools to emulate?
For those filled with fear by the idea of a media conglomerate such News Corp, Sony, CBS or Amazon owning and operating schools there is some promising news. Due to continued market volatility in the for-profit education sector media firms may not follow where others have gone until a profitable track record can present itself. Besides the collapse of for-profit brick and mortar schools like TCI, online for-profit schools have seen a decline in enrollment between 2012 and 2015, whereas non-profit schools continued to grow online. It’s hard to know if this trend will continue but the for-profit decline does show that operating a money making school is still a challenge regardless of removed hurdles, even if it’s a challenge media conglomerates may take up in the near future.
* Due to their media technology infrastructure and the centrality of media content in their users’ experience I would classify Facebook, Twitter, YouTube and other social media platforms as media companies. Others argue that the jury is still out.
** Amazon is a media technology firm. Even though consumers are more familiar with its online retail arm, Amazon operates one of the largest cloud technology services for online businesses. Plus: if your company wins multiple Golden Globes and Emmys — it’s a media company.
