The Blockbuster Lesson for Higher Education

I currently have the…pleasure?… of serving on a campus committee that’s charge ostensibly is “to advise the vice chancellor for Administrative Services on the facility needs of the campus.” This is my second year (of a three-year term) on the committee. At one of our meetings last year, as we were being briefed on several planned construction and remodeling projects, I raised the question, “Has anyone considered that we may be acting like Blockbuster in an age of Netflix? Given trends in higher education, with increasing use of online technology, does it make sense to continue investing so much in brick-and-mortar facilities?” Few seemed to understand (or appreciate) my question, and it went largely unaddressed.

Earlier this week, I ran across an article by Clayton Christiansen and Michael Horn in the New York Times arguing that online education is going to be an agent of transformation in higher education. They argue that most traditional higher education institutions are, at best, reacting to online education in the same way sailing ship companies reluctantly adopted steam engine technology by just supplementing their sailing vessels with a steam engine, rather than embracing the new technology and replacing their sailing ships with steamships. Yes, that is precisely the way most universities–including mine–seem to be reacting to online education. I sent a link to the article to my fellow committee members, reminding them of my comments last year about Blockbuster.

It seems that, in the minds of some at least, advising the vice chancellor on the facilities needs of the campus does not include taking into account the potential changing nature of higher education and its implications for the facilities needs of the campus. Such a “bigger picture” is beyond our pay grade. Not surprisingly, I suppose, those observations were shared by administrators who sit on the committee. I was referred to our University’s fairly fresh “strategic plan,” which itself ignores the external higher education environment in which we operate. Point made.

But then, the real irony of the story. Within hours of these email exchanges, DISH Network announced they are shuttering the remaining Blockbuster stores in the US and shutting down Blockbuster’s mail-order deliver service. The company that, in its heyday, revolutionized the video rental industry is now dead; a victim of ignoring what it perceived to be an inconsequential technological change. As Larry Downes and Paul Nunes share in their Harvard Business Review blog today, Blockbuster became a casualty of “Big Bang Disruption.”

I doubt my committee colleagues noticed the announcement. If they did, I’m sure most disregarded it as purely coincidental and not relevant to our work–if they even connected the dots. And yet the questions remain for traditional universities and colleges, including mine:

  • Are we ignoring a big bang, disruptive technology in online education? (For a nice piece arguing yes, see Alex Tabarrock’s “Why Online Education Works“)
  • Are we still investing in long-lived brick-and-mortar assets that are likely ill-suited to compete in the future market for higher education?
  • Do we recognize that our market niche, if we are to have one at all, will likely be less about selling higher education than about selling a collegiate experience?
  • What kind of facilities are best suited to servingĀ that market?

But those aren’t questions for me or this committee. Above our pay grade. Not what the kind of question the facilities committee should be asking. I wonder who in Blockbuster was similarly dismissed?


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