Transnational Education
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Thoughts, research, current events, and instructional models -- for accredited degree programs delivered internationally

Monday, June 09, 2003


U21 Global: A Few Easy Questions

This wouldn't be much of a Transnational Ed blog without some mention of the Universitas 21 international consortium of universities, with Thomson Learning as the commercial partner, finally opening its virtual doors. It happened the week before last, but I don't feel that it's too late to make a comment since the whole affair has been strangely under-reported, or under-analyzed anyway. Maybe that's because, after six years of press releases about nothing, any Wow! factor has long since dissipated.

So many backgrounders have already been written about U21 Global that the world doesn't need another one. A bunch of brand name universities are teaming up with a huge publishing and info biz multinational corporation to offer an online MBA. That's pretty much the whole story so far.

Remaining unanswered for me, however, are just a few little questions:

1) What the heck are the universities actually contributing, besides money?

Universities have faculty, some of whom can teach. Universities are developing their own online courses and have invested in Course Management Systems. None of these resources and capabilities will be brought to bear on U21. All online course development, system management and student assessment is Thomson's. New faculty and adjuncts are being hired. The Universities are contributing their reputation to Thomson's content and its presentation.

Yes, I know, there's the U21pedagogica, (I'm not making this up). This oddly named entity functions as an academic Quality Assurance board -- it is the last (and only) academic line of defense against whatever Thomson cares to produce. Three university Presidents at a time control the board.

2) Does anyone really believe that U21pedagogica can be an independent QA force?

U21pedagogica is not owned by U21 Global; thus, it can provide QA services to U21 Global as a separate entity. U21pedagogica is, however, wholly owned by Universitas 21, which, with Thomson Learning, are co-owners of U21 Global. All U21 Global courses must be certified by U21pedgogica. None of that matters. What matters is that both sides have their money on the same side of the table. The internal QA police and the development staff are in business together no matter how they draw the chart.

I'm not saying there will be no conflict, it's not that simple. Their common interests will simply establish a very narrow set of parameters within which conflict will occur and be contained.

3) What about that $111 billion (US) market!

This one makes me laugh. You have to be in the right position to see it, reviewing multiple news sources on the U21 Global launch. Every one of them mindlessly repeating the precise figure of $111 billion (US). And not a penny more.

I do not know who made this estimate, and I made an admittedly modest effort to determine the source. As a result, I do not know what assumptions the estimate is based on. Nobody does. But everyone knows one thing -- it's a $111 billion (US) market!

U21 Global predicts registration of 5,000 students by 2004, which is coming up sooner than you'd think. I see that as about a $30 million (US) business with a high profit margin. On the other hand, I will be extremely surprised if they reach 20% of the predicted registration level with paying customers.

But even if they do -- U21 Global is only predicting $500 million (US) in revenues ten years down the road. I don't know what that will be in Profit, but let's say it's 20% -- which most companies will ever achieve in their dreams. A 20% Net yields $200 million (US), to be split between Thomson and Universitas 21, which means $100 million (US) divided 16 ways. There would be weighted shares no doubt, but still, the return is not staggering, plus it's a long way off.

We'll be watching.



posted by Dr. Nickel at 10:57 PM | Link | Comments

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Tom Nickel
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