On MOOCs, MOODs and the Future of Higher Education

Are university faculty destined to be rock stars? And if so, what sort of rock stars are we?
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Are university faculty destined to be rock stars? And if so, what sort of rock stars are we?

A recent commentary from New York University's Clay Shirky, "Napster, Udacity, and the Academy," linked the potential, or perhaps the pending disruption, of higher education by massive and open online courses (MOOCs) to what the music industry faced in the advent of file-sharing networks.

Anyone who follows the news in higher education who has also followed the news in the music industry over the past decade likely feels as if the headlines, the hype and even the hyperbole look familiar. Shirky's article substantiates that feeling of déja vu.

The consequences for the music industry attributed to the file-sharing phenomenon -- of which Napster was only a part -- have been a bit more complicated than Shirky argues. In particular, the recorded-music and live-music sectors have experienced very different outcomes since the turn of the century.

Perhaps this difference in the wake of massive, open and online distribution (MOODs, if you will) of music files will help us construct a more nuanced set of expectations for the impact of MOOCs upon higher education.

Since 2000, revenues for the sale of recorded music have indeed fallen dramatically in the United States, as well as globally. According to the RIAA, recorded music sales (retail value) have dropped from just more than $13 billion in 2000 to approximately $7 billion in 2011. The IFPI, the worldwide representative of the recorded-music industry, reports that global sales (trade value, currency adjusted) of recorded music fell from $36.9 billion (2000) to $16.3 billion (2011). Essentially, the dollar value of the global recorded-music market, even when new revenue sources such as subscription music services (e.g., Spotify, Rhapsody, and Deezer) and online radio (e.g., Pandora) are included, is now nearly half the size it was only a decade ago.

The thought (or night terror) of university tuition revenues falling by nearly 50 percent likely triggered a wave of fear, uncertainty and doubt sufficient to explain any and all of the formal efforts, informal experiments and unsightly accidents related to online education that we have seen in the past year.

To the extent that what we faculty do is directly analogous to a musical recording, Shirky may indeed be correct. The talking-head lecture is easily recorded, copied and redistributed. In a Napsterized world, open access to these copy-paste experiences seems inevitable.

If we were to be completely honest, some university faculty have been Napsterizing themselves for decades. In fact, many of these talking heads willfully copy themselves every semester when they serve up the same lecture to multiple sections of the same class on any day, or to the next generation of a course in subsequent semesters.

If what happens in a classroom is more like a live-music event, however, the lessons we learned from the music industry over the past decade might prove quite opposite to those we learned from the compact-disc version of that industry.

Importantly, and in contrast to the fate of recorded music, revenue in the live-music market has increased dramatically since 2000. Pollstar reports that since 2000, live-music ticket revenues have increased by 250 percent, from $1.7 billion in 2000 to $4.25 billion in 2010. This increase, however, appears to be a combination of both a rise in ticket prices -- from $40.74 to $61.74 over the decade -- and the number of venues reporting to Pollstar.

Focusing upon the top 100 tours, in an effort to avoid any effect from an increase in the number of reporting venues, we see that gross sales of live-music tickets rose from $1.5 billion (2000) to $2.5 billion (2009). I am not including 2010 in this period, because a major music entertainment company, Live Nation, stopped reporting at least a portion of its box office statistics to Pollstar in June 2010, likely leading to an understatement of 2010 gross ticket sales.

What perplexes the music industry, and should also perplex higher education, is why and how this difference between recorded and live music occurred. An explanation for this difference seems to take two dominant forms.

On the one hand, we may simply have observed an income effect. Money that individuals or households no longer needed to spend on recorded music -- since that music, in both theory and in practice, could now be acquired for free -- was spent, at least in part, on live music. The live-music sector tapped into a larger pool of available disposable income in the form of higher ticket prices.

Data from the U.S. Census Bureau seems to support the assertion of an income effect. Spending on recorded music averaged roughly $61 for all consumers over the age of 12 in 2000. By 2010, that number had fallen to below $30. Over the same period, and as described above, the average ticket price for a Top 100 music tour rose from just under $41 in 2000 to just under $62 in 2010 (according to Pollstar). There appears to be at least anecdotal evidence that some money moved from one pocket to another.

On the other hand, we now have good reasons to believe that consumer behavior in the wild operates under more nuanced mental models than the simple income effect drawn on blackboards in ECON 101. For example, it is highly unlikely that we have a pile of dollars sitting on our desk labeled "For Music," and as that pile seems to be unused, we choose to spend the remaining stack of cash on the next concert.

Furthermore, simply attributing the shift in spending to an income effect within the For-Music stack fails to address a key question: If, for the price of an Internet connection, we had access to all of the world's recorded music at the touch of a button -- in both audio and video formats -- then why would we be somehow more willing to pay for a live version of these recordings, particularly when experienced in stadium-sized venues rather than in our living room? Because we could have easily spent on something else that money we supposedly no longer spent on recorded music.

Meaning, with recorded music so freely available, what experience -- beyond the music itself -- did we consider so valuable that we were willing to spend an even greater amount of money on that experience than we had spent before?

This uptick in live-music spending -- regardless of the underlying cause -- leads to a more controversial corollary for higher education: If access to all of the world's recorded music led to a greater willingness to pay for live experiences of that music, are we to conclude that access to all of the world's recorded lectures might lead to a greater willingness to pay for live versions of that talking-head experience?

I don't have the answer to that last question.

I do believe, however, that the history of the music industry in the wake of Napster presents a more complex version of disruption than is argued. If we are to apply these lessons learned from the music industry to our expectations for the future of higher education, we may be wise to consider this complexity fully.

If we are to be compared to rock stars, then the lessons we might learn from the music industry may depend upon what sort of rock stars we happen to be.