I have a few investments in the web video space. Specifically, Tubemogul and Edufire . I am off to Tubemogul’s Board Meeting today and am always excited to dive into the quarterly data. I will post an update from the Company tomorrow. Today, I asked Jon Bischke, The CEO and Founder of Edufire, to update the landscape from his daily battles in the educational video space…..Thanks Jon:

I’ve had several conversations recently with people around the subject of online video in education (specifically higher education). I’ve received many interesting reactions ranging from “No one in higher education cares about video” to “Video will change everything about education”. So which is it? Admittedly, I’m biased but I’m going with the latter. And here’s why…

Does it make any sense for 5,000 teachers around the country to teach the same college algebra or macroeconomics course every semester? Of course not. Obviously, if you could take a class from Greg Mankiw or Tyler Cowen why would you resort to taking a class from some mid-level hack (assuming prices were similar)? The only reason 5,000 teachers are regurgitating the same subject in 5,000 separate classrooms around the country is because as little as a few years ago we didn’t have the technology for thousands of students around the country to learn from the same professor.

Enter UStream Justin.tv LiveStream etc etc etc

So why is higher ed largely pretending like these technologies don’t exist (OK, there are some pioneers out there but precious few on a relative basis)? I think it’s the classic case of The Innovator’s Dilemma. If you’re making money doing something the way you’ve always done it you’ll largely continuing doing it the way you’ve always done it. And that’s fine and dandy until a disruptive innovation comes along.

That disruptive innovation could quite possibly be online video. Why?

Scale.

When you have scale in education you have crazy stories like Megastudy and celebrity teachers like this guy in Hong Kong. Teachers making millions because they are able to scale their ability to thousands of students. It’s like Kobe Bryant playing at Staples Center or Jagger at Wembley. These guys make millions and are celebs because what they do scales.

Scale breeds competition. Millions of boys growing up wanting to be Kobe or Mick. Girls who want to be Michelle Wie or Taylor Swift. How many kids grow up wanting to be a famous teacher? That’s about to change. Sites like AcademicEarth and TeacherTube are putting teachers in the spotlight in a bigger way than has ever been seen. Companies like Brightstorm and Educator.com are creating new uber-platforms for the best and brightest of the teaching corps.

And this = all good. Because one of the ways this is going to help is that it’s going to lower costs for education while increasing quality. The winners (ultimately) will be students and teachers. The losers? Those that are maintaining the status quo. Want to know what the most profitable segment of education is? Freshman lecture mega-classes. Do the math. Stick 500 students in an auditorium, charge them the full tuition and then subtract out the cost of one professor and some lowly TAs and you have a recipe for ridiculous margins (Kevin Carey does a fantastic job describing this phenomenon in this article) and subsidization of most of the other (money-losing) parts of the university. Don’t think video will change the landscape for those classes? Yeah, and I have some newspaper companies to sell you who didn’t think craigslist would affect their mighty empires either.

Last week we announced online CLEP classes at eduFire (full announcement here). Through those live video courses and the accompanying exams you can gain college credits for about 80% cheaper than a place like The University of Phoenix. We’re only a small blip on the radar and like a lot of the other disruptive start-ups in the space, likely to remain tiny for a while. But over time many of these blips are going to grow larger. And as Christensen points out in industry after industry, yesterday’s disruptor becomes tomorrow’s disruptee.

Video, most notably YouTube, has changed the landscape for a lot of industries. The web is a fundamentally different and richer place than it was just a few years ago. And pretty soon, the highly disruptive force that is video is about to sweep through the education landscape. The effects of the video tsunami on education will indeed be very interesting to watch.

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