August 30, 2023

There are some notable parallels between the predicament of the current screenwriters’ and actors’ strikes and the situation independent schools and teachers are facing now and in the years ahead. In a nutshell, Hollywood has been facing a declining business model of movie theatre attendance and the growth of streaming services like Netflix, Apple TV+, Prime, and YouTube, threatening their current distribution channel of bundled cable TV (estimated by PwC to be reduced by 50% by 2027). The major networks decided to join the unbundling movement with the launch of their own streaming services, minimizing the importance of cable (Hulu, Paramount Plus, and Peacock). During the pandemic, actors and writers feasted on the need for unbundled content to satisfy the demand for these new streaming services. 

Because most customers craved new content, watching reruns or time-shifting original shows due to busy schedules was no longer necessary. Post-pandemic, viewing of streaming services has declined or viewers have canceled more expensive subscriptions. For the streaming services to be profitable and reduce their current losses, Hollywood needs their content creation costs to stay flat or transition to less costly programming like reality TV. And there you have the impasse. Lowering costs means reducing royalties to union members.

It is increasingly likely that schools will also control costs by unbundling services, even in the academic program. The practice is not new to the world of education—the charter school world attempted to play the role of streaming services in public education, and independent schools have long unbundled curricula by adding consortia-developed online courses that save faculty and curriculum development costs. The bundled approach has become too expensive for most private schools. Other examples of unbundling are the explosive growth of homeschooling, the growth of online schools, the rise of micro-schools, where limited programs allow for a more customized student experience, and, of course, the rise of vouchers in many parts of the country, primarily used for program-specific schools such as performing arts, STEM magnets, or charters. Still, most independent schools remain the premier bundled solution, and at the current price point, are raising serious questions about the value proposition. Perhaps one-stop shopping in the education world is too expensive.

Now let’s take the analogy further. Imagine that your cable TV service with all its bundled channels is like your school. Your subscription price is the tuition that parents pay. The channel categories like News or Sports are your academic disciplines or extra-curriculars, and the individual channels are the courses and sections that your teachers and coaches lead. What do cable TV services do when they start losing subscribers as profiled by PwC? They start reaching for cheaper cost channels like reality TV where the actors command no residuals or are non-unionized. The result is a lower-quality product and a loss of customers.

And what do schools facing the same issues of declining enrollment and rising costs do to balance their budgets? They too start looking for cheaper content alternatives and quick fixes to maintain the breadth of the program. Begin by recruiting younger teachers, the cheaper content channel. Then lower the minimum qualifications like a Master’s degree or 3 years minimum experience, another less expensive channel strategy. They start paying more stipends to existing faculty to avoid the new faculty costs of recruitment fees and additional medical and benefits costs.  Have you noticed these practices at your school? It will tell you whether your school is managing a downward spiral or creating a sustainable future.

As we wrote in the article “Schools Can Learn from McDonald’s Reversal on All-Day Breakfast”, independent schools never anticipated that they could not recruit or retain teachers or that new hires would command a much higher price, similar to Hollywood fantasizing that they could pay actors a less than livable wage. If they had, they would not have embarked on an administrative binge these last 25 years, adding staff in every area from DEI teams to risk management, institutional research, sustainability programs, innovation directors, advancement, and enrollment management staff. So just when additional cash has become most critical because the teacher crisis is real, there is little wiggle room to attract the best teachers. Some of this is cost of living-related. Little wonder the profession is under strain when the median age of a first-time house buyer has risen to 36 years old. According to the New York Times, the median U.S. home sold for $416,100 in the second quarter of 2023, a 26 percent jump since early 2020. Median home prices were significantly higher in the Northeast ($789,600) and the West ($547,900). But the benefits of a rising tide have not uniformly lifted the younger generation, sometimes called the Unluckiest Generation. Thus, this strategy of stipends and younger, less experienced recruiting has its limits: experienced teachers feel more of the programmatic burden, and the younger teachers, suddenly dumped with a laundry list of responsibilities (“other duties as assigned”), are likely to see the profession as unable to provide a livable wage and a good quality of life. 

Schools had been feasting on an ideology called Baumol’s cost disease that assumed tuition could rise with abandon because the productivity gains in specific sectors of the economy (think technology and manufacturing) lifted everybody, particularly in the service sector. The accreditation agencies and national associations embraced this mindset and schools have been building skyscrapers of content, programs, and infrastructure, in the shadow of deficit budgets that appear balanced after annual giving and endowment draws. Now that the constraints of this accounting method have been exposed, even after the bandaids, schools are forced to adopt alternative strategies that help preserve voluminous content delivery and breadth of program. Some of that program will have to be supported by outside resources and new productivity tools. Artificial intelligence is the most recent tool that is likely, over time, to help schools do more with less. AI tutors are springing up everywhere and some, like Khan Academy’s offering, are being integrated into the learning management systems. 

Growing the content model is very difficult to sustain, just as Vox or Buzzfeed found out. Hollywood is at the same crossroads that journalism was several years ago. Schools need to determine whether they are in the content delivery business or something a lot more comprehensive, sophisticated, and nuanced. If the latter, then it is incumbent upon our schools to determine how they can best utilize their faculty in the ongoing growth and education of kids, and that might entail outsourcing (unbundling) services that are less critical to student success. Decades of the social efficiency ideology have nicely packaged the bundle. It just may no longer be affordable as a bundle, like broadcast or cable TV.

For independent schools to continue to thrive as a bundled solution, they are going to have to rethink scope, sequence, and pedagogy in a way that reduces the time commitment of experienced teachers and academic support staff. AI is a candidate to offer much more productive programmatic pathways for students, perhaps partially asynchronous. The key will be to identify those learning experiences that will be critical for adult-student face time, and those that can be addressed in other ways such as peer tutors, adult tutors, AI tutors, or online programs  If teachers find the transition difficult and miss their traditional role as “sage on the stage”, remind them they are changing their approach in order to make their long-term contribution to the school more valuable and affordable without sacrificing educational quality. While financial considerations may drive unbundling and rethinking the delivery of services, the future success of our students is also a major consideration. That means the integration of cross-curricular skills (derived from your Portrait of a Graduate) into your new curriculum. The tidy load paradigm of sections per teacher will disappear as you rethink your program. And of course, the relationship you have with your students will become an even more important component of your career goals. 

You must have done the math. It’s pretty easy just to forecast your budget for 5 years, make some assumptions on inflation and local real estate costs, and work out whether you are able to afford or attract teachers (young or old) and stem attrition. For many mid-market schools with limited safety nets (endowments), the answer is a clear “No” or at the very least “Unlikely”. This is what accountants call a “going concern issue” and accreditors, “an area for improvement”. Here is our full set of recommendations that were laid out in our April 2020 report: The Pivot Ahead for Independent Schools. We have condensed them below and added #1. Use these recommendations to customize a strategic plan of the type we have advocated:

1. Reduce administrator bloat in a way that doesn’t expose you to increased risk. It is very real and is impacting your ability to afford teachers. 
2. Implement “real PBL” on a broad scale to make learning more student-directed and provide a mechanism to increase teacher load. We mean the authentic form of PBL, not the PBL-lite version in practice at many schools.
3. Use blended learning and grading for equity as a transition to less scope and sequence, and more essential content. 
4. Adopt an assessment umbrella that recognizes cross-curricular skills (CBE) as well as key content objectives. This is what will make you a more complete and effective educator.
5. Eliminate the “more choice results in better outcomes” mentality. This includes how you track, the sequence of courses, and overall offerings.
6. Enable a schedule that is focused, flexible, and more student-driven. It enables agency and it moves the best teachers to the highest-value tasks.
7. Utilize technology that supports student pathways and cross-curricular skills.
8. Remove practices that reinforce cultural barriers to change.
9. Design professional development that requires outcomes.
10. Disassemble silos and hierarchies where appropriate to create better teamwork at the teacher and administrator levels.
11. Infuse SEL into the entire school program. Better relationships will be the core of sustainable bundled school solutions. Avoid divisive ideologies and focus on the learner.

Many schools are currently on a path to being unable to afford the teacher quality and experience they require. One crucial impediment is that the balance between content and skills in the curriculum is heavily skewed to content, and that is a function of acceptance of content standards over the building of essential skills. Content emphasis gobbles up class time and homework time at the expense of providing a skills-based context for essential content. That is the intersection of an educational ideology and the economics of sustaining high-quality schools. This is a shift that may take from 5 to 10 years to realize. It will take trust, collaboration, and a new architecture of learning. Building a plane while flying is never easy. Corporations are forced into these realizations and quick pivots because the mission is clear—generate shareholder value. Non-profits have more community-based values, and their mission ideology has frequently not delivered alignment (as I have written in my article Why the 50-Year NAIS Governance Experiment is Over), complicating the way forward. Plan to begin this challenging and exciting process now, before your Board decides that you have to adopt an austerity program.

You may also be interested in reading more articles written by Sanje Ratnavale for Intrepid Ed News.