College: Who is the Consumer?

Mike Gibson has a piece on the bundle that is college education.

Taken together this is like an awful cable TV package. To get HBO, you also need to pay high prices for all those unwatchable stations like the Hallmark Channel. The future of higher education will involve unbundling this package and offering cheaper, higher quality substitutes.

Many of us have said that there is some potential to unbundle college. Gibson points to Reid Hoffman’s recent piece on separating out the credential.

Ten years ago, I wrote,

A generation from now, the most successful colleges may be the ones that provide the best aesthetics, while outsourcing the actual function of education.

It may be a mistake to make forecasts about the economics of college based on what we presume that students want, or even based on what we presume that parents want. Suppose that the most influential consumers of college are government and wealthy donors. If those consumers want bundling, then they will get bundling.

Consider the possibility that the biggest implication of Average is Over is the growth of toadyism. Be careful about predicting the evolution of goods and services based on consumer sovereignty. Instead, make your predictions on the basis of what will help in pleasing the very rich and the politically powerful.

2 thoughts on “College: Who is the Consumer?

  1. “Suppose that the most influential consumers of college are government and wealthy donors. If those consumers want bundling, then they will get bundling.” This is already largely true in the case of big-time college athletics, is it not, given the influence of wealthy boosters? (For example, in the pay scales of coaches, and the capital and operating expenses incurred in building lavish stadiums and arenas, special practice facilities, dormitories reserved for elite athletes, and so on.)

  2. “If those consumers want bundling, then they will get bundling”

    I’d take some convincing on this one. The consumers getting what they want hinges on the consumers effectively communicating what they want and the producer being willing to give them what they want.

    At least in this case there’s more competition than there is in the cable world. I have a choice in colleges, but Comcast is the only cable provider in my area. Even so, this change would require influential universities to being this change, thus forcing other universities to at least begin serious evaluation of unbundling. Not sure I see that happening.

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