For this month's award, we will delve into a disruption that took place a few years ago, and how that disruption is about to have a second act, accelerated by coronavirus. Hence, it is related to the June 2020 ATOM AotM.
Streaming video has already disrupted the film and television industries completely. Due to recent events, it is now on the brink of its second act.
First, a recap of the first act. Netflix was the first and most well-known among existing streaming services, of which there are now over a dozen. The disruptions inherent to this were immense and across multiple sectors. Blockbuster alone had 9094 stores at its peak in 2004, alongside Movie Gallery's 4700, and these were not small stores in square footage and parking lot space. There were other, smaller video rental chains as well. Collectively, they consumed thousand upon thousands of acres of prime urban land. The removal of this entire resource allocation and supply chain was immensely productive, and rapid.
Additionally, the entire structure of how films and television are produced was upgraded into a more productive version. The old paradigm of 26 episodes per season, and commercial breaks every few minutes was extremely restrictive. Most 'one hour' programs from the 1980s and 90s were barely 40 minutes of real content. All of that has been swept aside with the technological revelation of on-demand streaming. The exceptionally low price of most streaming services qualify as a true ATOM disruption. Try explaining to young people today how, in the early 1980s, people had to rush home to not 'miss' their favorite program or a movie that was being shown on TV for the first time (including commercials for a third of that time).
But the second act is the disruption of the next industry, education, by the same medium. The seeds were sown in 2015, with only the 800,000 Chinese students paying full price delaying the manifestation of this ATOM disruption. Coronavirus has shuttered in-person schooling, which has forced students online. Yet, universities, in their hubris, want to charge the same fee. This invited comparisons that universities are ill-equipped to rebut, and are uncannily similar to what taxi medallions said when Uber disrupted their entitled status quo. Suddenly, questions of both cost and duplication of effort began to move to the forefront.
The following list summarizes the extent of the mismatch, even though the Harvard 'annual' price actually represents just the eight-month academic year. Furthermore, $50,000/yr for Harvard is probably still a better value than $40,000/yr for a university ranked closer to #50. Of course, this table is for dramatic effect, and the disruption is going to be in lower-value education (K-12 and lower-tier universities) first.
Articles written about this disruption have appeared in important non-tech publications :
The 'emperor has no clothes' moment for the ridiculously expensive 'education industry' draws near. People are beginning to finally figure out how little value (or even negative value) they are getting for their money, combined with the acceleration of technological alternatives. This is something I have been anticipating for some time, and thus had become one of the most overdue disruptions around.
The key, of course, is for employers to have the courage to buck the status quo. Employers have been unusually timid about hiring entry-level candidates without degrees, or even creating their own onsite training programs.
For example, there is no reason why a large tech company cannot simply hire the 18-year-olds with the highest SAT scores, and put clusters of them into on-site training programs, and even house them in local dormitory-like apartments near the office campus. If the SAT score is not enough info, students can also add a dossier of their accomplishments and a writing sample. Effectively, the college application for which a student pays $50-$100 for the privilege of submitting, can be an online upload for free, accessible by login only by verified employer HR staff email addresses. Once hired, the tech company mentors the candidate, and commits to three years of employment, so that their resume is sufficiently solid in the absence of the university credential. Each US military branch has 'basic training' that is of 7-12 weeks in duration, so there is no reason tech companies cannot have a 3-year training program for 18-year-olds. As long as other tech companies recognize the training from the first (Google, Amazon, etc.) as valid, the graduates can circulate throughout the tech industry, and the monopoly of universities is broken.
In addition, the premise that the 'contacts' they make at a university are more valuable than the contacts they make in their first three years at Google, Amazon, or Tesla is absurd. The truth about college is that a person's best friends usually are not going into the same professional field, whereas this link is met in the training program. Even if their compensation net of free housing is very little, that is still a vastly higher net compensation relative to a university degree. But alas, these supposedly innovative tech companies have not yet demonstrated the courage to bypass college.
Fortunately, the ATOM might do the hard work of normalizing streaming education at the same cost as other streaming content, bypassing the need for employers to wait for a 'Spartacus'. This long-overdue correction of a massive resource misallocation may finally be upon us.
Related :
The Education Disruption : 2015
Related ATOM Chapters :
3. Technological Disruption is Pervasive and Deepening
8. The ATOM Transformation by Sector