Tuesday, September 24, 2013

Bundling

One ring to bring them all

And in the darkness bind them

In addition to its role as an old timey courting practice, bundling is also a commercial strategy. From Wikipedia:

In marketing, product bundling is offering several products for sale as one combined product. It is a common feature in many imperfectly competitive product markets. Firms in telecommunications, financial services, health care, and information industries frequently offer products in bundles.[1] This is again common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products may be called a package deal or a compilation or an anthology.

It has been identified settings in which bundling can be used by firms to discriminate among consumers or to extend market power into a related product market.[2] Bundling in appropriate proportions is privately profitable, reduces a rival’s profits and overall welfare, and may drive rivals from the market.[3]

In addition to the examples mentioned consider a newspaper. By packaging a bunch of stuff you want (the sports page and the comics) with a bunch of stuff you might want (national and local news) and other stuff you might rarely want (classifieds, other ads) the paper achieved economies of scale. Other advertisement supported media have had similar models. The intertubes, the computer, and DVR make it possible to separate the advertising chaff from the grain. The consequent unbundling has devastated those industries.

Many people think that the next unbundling target might be the university. Traditionally the U has bundled beer parties and concentrations of attractive young people with practical material (like physics and math courses), slightly useless stuff (grouped requirements, humanities), really useless stuff (ethnic studies) and idle entertainment (theater, art), the ostensible reward for all of the above being a certificate called a degree, attesting supposedly to the fact that you learned something despite the beer and girls.

The Massive Online Open Course (MOOC) and other forms of distance learning challenge the notion that you have to spend four years on a specific patch of ground (campus) being subjected to all of the above in order to learn something. The magic ring that controls and animates the bundle, the degree, is at the heart of the upcoming struggle over twenty-first century higher education. As long as the residential university controls that ring of power, they can withstand the besieging forces of unbundling.

From Slate:

It’s nearly impossible to get into MIT, very expensive to enroll there, and exceedingly hard to graduate, which are some of the reasons why MIT degrees are so coveted. But very soon you’ll be able to take a series of online courses in computer science and earn an official certificate from one of the most prestigious engineering schools in the world, all for only a few hundred dollars—and without having to meet any admissions requirements. MIT will be launching these XSeries Certificate programs in the next few months, including one in “supply chain management.”

MIT, in a press release, says the new programs are part of its effort to “reimagine the building blocks” of education as universities begin to deliver more of their content digitally.

Yet the program is also part of something much larger: the beginning of the unbundling of the American university. Much in the way that 12-song albums gave way to 99-cent iTunes purchases, universities are now under pressure to offer more ways to slice off smaller bits of education.

I love it, but then I’m not a professor at a university – probably the people most likely to join reporters and editors on the unemployment lines.