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I'm seeing this in my tl a whole bunch so lemme save you some trouble: this article is so packed with bullshit they ought to designate it a superfund site. https://nymag.com/intelligencer/amp/2020/05/scott-galloway-future-of-college.html
The interview's tldr is: The pandemic is disrupting higher ed in a way that will lead to elite top 20 universities partnering with tech titans to create "hybrid" online/offline universities. So Harvard+google, http://MIT.Microsoft , etc.
It's a long interview and it's so packed full of nonsense I hardly know where to start. The person being interviewed doesn't seem to know much of substance about higher ed finance, branding, or administration. Is what he's saying possible? Sure. Is it likely? No one knows.
Before I drag this shit, let me note what he gets right: higher ed is facing a financial crisis! Mind blown, right? So he starts with a correct premise but also at this point common knowledge. Declining tuition revenue is going to create big problems and capsize some schools.
I understand why big tech may want to create longterm partnerships with elite research universities (many already are) but I'm baffled at one is in it for Harvard and MIT to give substantive control to big tech so they can massively expand enrollments.
Regardless, the real core of nonsense here is the interview's analysis of the "business model" of elite universities. Let's have a look at this passage, where Galloway tells on himself as being both pedagogically lazy as hell and also ignorant about basic higher ed financing.
What does Galloway mean by gross margin points of 94-96? He's saying that when he runs his class it draws $1.2 million in revenue against about $60K in costs. So first question: Does an NYU undergrad class with 170 students draw $1.2million in revenue?
He gets that number by multiplying credit hour cost times the number of students. NYU tuition is $58K divided by 8 credit hours per academic year: $7,500 actually, but it doesn't really matter. Why not? Because most NYU students don't pay $58K. The discount rate is about 30%.
So the real number is not $7k, it's about $5k. But it gets worse! Where on earth did he come up with $60K in costs? Hard to say, but I'd guess it's a round percentage of his salary. In other words, the only "cost" that goes into that 95% gross margin calculation is his salary.
What doesn't he include: Welllll... does he have a teaching assistant for those 170 students? At Duke, the cost on the department side for that is about $7k, and that's with a bunch of costs being swallowed by the the rest of the university.
What else isn't included? Does he have staff support? (Yes.) Does he have tech support? (Yes.) Does he have library support? (Yes.) Does he have a clean classroom? (Yes.) Is there power in that classroom? (Yes.) Heat and light? (Yes.) Is any of that shit free? HELL NO.
How much does all that cost? It's hard to say with precision, but most universities track university wide overhead costs. Duke's overhead rate for research functions on campus is about 60%: unless you have an exception, Duke takes about 60% of grant revenue in overhead.
Now maybe that's a bad comparison right? Galloway doesn't need an expensive electron microscope to teach marketing, so his overhead costs are lower, right? Except it doesn't work that way because that misunderstands what the students in Galloway's class are paying for.
Galloway thinks he's the product. He thinks students pay NYU $7K (actually $5K) a pop for him to offer marketing wisdom for an hour a week. But that's nonsense. An NYU undergrad degree as a consumer good is not an expensive handbag; it's a dinner buffet.
Galloway is the butterscotch pudding on the buffet. Some number of people will slop him on the plate. Others will opt for the beats. The buffet proprietor will note the costs of the items, sure, but she prices the buffet on the basis of total sales and total costs.
This is because she recognizes something basic that Galloway does not: her customers are not paying for a particular item; they're paying for access to a menu of items consistent with a general brand image of quality.
So, sure, Galloway doesn't need an expensive electron microscope but students are paying tuition for an NYU brand that includes a bunch of things not found in his classroom: dorms, gyms, Italian language classes, electron microscopes, libraries, etc.
And if NYU doesn't have those things they can't maintain their brand image. It looks like a shitty buffet! There's just that Galloway guy! And he's the garbage butterscotch pudding!
Harvard doesn't want to be a shitty buffet. Neither does NYU. Neither does Duke or Yale or Stanford or any of the other elites that Galloway thinks will be partnering with tech. They are, indeed, zealous brand managers, often to the detriment of both justice and good education.
And if Galloway is right about who has the best "brands" in the world--he says its those elite universities--why on Earth would they want to do something as vulgar and crass as adding tech companies to the masthead? It will dilute the brand.
It flatters tech aficionados like Galloway to think that the snobbish brand management of the Ivies et al regard big tech companies as equals, but, folks, it just ain't so. Worse still if the the partnership means that they stop doing what they're doing and become huge MOOCs.