Media exerts magic

July 30, 1999

Alison Goddard looks at how multinational multimedia companies are muscling into university territory

Pearson, the international media group, last month advertised for a job it described as "a top-quality opportunity in distance learning at Financial Times Management".

The successful candidate, the advert continued, "must have a record of leadership in university-level education" and "will need to be a protagonist for open/distance learning techniques and committed to providing academic excellence in a competitive and profitable business environment".

The advert concluded: "This is a unique chance to be involved in developing this exciting new enterprise in one of the fastest growing sectors in the education market."

Multinational multimedia companies are beginning to encroach on university territory. Possessing financial muscle plus the publishing rights to course material, they are making aggressive moves into the market for MBAs, professional short-courses and English as a foreign language. Whether this trend represents a threat or an opportunity to traditional universities and colleges is still unclear.

Neil Gregory, director of the research and contracts division at the London School of Economics, said: "A lot of media companies think that moving into higher education is a good idea. Their approaches vary between well-thought out ideas to those who want to get into internet-based distance learning because there is billions of pounds in it. We are in substantive discussions with an awful lot of (media companies)."

When Stuart Cunningham of the Queensland University of Technology in Australia conducted an analysis of the role of media companies in higher education two years ago, his team found little evidence that media companies were entering the market.

The study concluded: "While there is a good deal of hype relating to the involvement of global media networks in higher education, there is little evidence of this involvement and, at least in the declared strategies of many of the global media networks, little intention of involvement beyond interests in the carriage of educational content produced and controlled by other providers."

Since then, however, media companies have expanded their education concerns, forming partnerships with traditional universities where appropriate.

For example, Pearson Management Education was created seven months ago by merging Pearson's distance-learning management education programmes offered by the Financial Times group with Pearson Education, which publishes management education texts. It has about 8,000 students on MBA courses developed in collaboration with Heriot- Watt. It also offers MBAs and business degrees accredited by Nottingham Trent University.

Other multimedia companies are investing in commercial ventures set up by universities. For example, Knowledge Universe holds a 20 per cent share in Unext, a commercial distance-learning company established by the London School of Economics and five other universities in the United States.

Knowledge Universe was formed in 1996 and describes itself as "chartered to move aggressively to acquire and/or build a broad range of educational service and product companies across the education spectrum. Knowledge Universe seeks to create, build and acquire education-related companies, public and private, regardless of size."

It owns the Spring group of training companies and a multimedia publishing company called Knowledge Universe Publishing.

Unext is applying for degree-awarding powers in the US under the brand name "Cardean" and expects to generate revenue of at least $300 million (Pounds 187.5 million) in five years, enrolling thousands and possibly tens of thousands of students on management and business courses. It is also considering expanding into English language programmes.

Don Norman, president of Unext Learning Systems, thinks that the success of media companies in higher education will be limited. He stressed that Knowledge Universe had a non-voting share in Unext and that it did not interfere in the business.

Edwin Eisendrath, senior vice-president of Unext, added: "I am cynical about how media companies try to break into education by thinking: 'We have got the course books, we have got online, now what can we wrap around that?'. They are wedded not to what they are but to what they own."

Despite such cynicism, multimedia companies continue to enter the higher education marketplace. Harcourt's publishing and education services group generated revenue of $1.9 billion last year. Last month, it paid an undisclosed sum for Knowledge Communication, which specialises in internet-based professional development courses.

Harcourt is developing plans to offer higher education courses over the internet and, according to a spokesman, will apply for accreditation in the next few months to one of the six regional bodies that accredit higher education in the US.

Macmillan's US publishing arm developed a partnership last year with Sylvan Learning Systems to train people working in information technology. Macmillan provides the printed material, web-based instruction, software and instructors, while Sylvan delivers the courses through its Caliber Learning Network, an existing network of linked campuses providing adult education.

Last month, Sylvan paid $50 million for a controlling interest in the Universidad Europea de Madrid, a Spanish private university with about 15,000 students.

The effect that corporate and virtual universities, including multimedia companies' education concerns, will have on British universities and colleges should soon become clearer. Robin Middlehurst of the University of Surrey is studying the impact for the Committee of Vice-Chancellors and Principals and is due to report back in the autumn.

She said: "It is unclear what role the big media companies will play. If they want to enter into partnership with universities, then the situation could be seen as an opportunity. Universities and colleges together with media and information technology companies could each bring different expertise into play. An interesting idea is that of 'unbundling': separating teaching from assessment, course design, marketing and so on. Different organisations can supply different expertise."

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