The Alacra Store is an extreme long-tail ecommerce business. There are close to 100 million business information SKUs – research reports, earnings call transcripts, credit reports, news stories – from about 50 publishers available on the Store. Only rarely does a single report sell more than a dozen times; when it does it’s usually a credit research report or an earnings call transcript being purchased by attorneys for a securities litigation case. So when an expensive piece of content sells several times in the course of a couple of days, we take a look to see what it is.
This week Moody’s released a report titled More US Colleges Face Stagnating Enrollment and Tuition Revenue, which has been purchased several times on the Alacra Store. At $550, it’s not inexpensive. This is the abstract:
The cumulative effects of years of depressed family income and net worth, as well as uncertain job prospects for many recent graduates, are combining to soften student market demand at current tuition prices. In addition to these economic challenges, tougher governmental scrutiny of higher education costs and disclosure practices is adding regulatory and political pressure that hinders tuition and revenue from rising at past rates. Federal budget negotiations may result in further pressure on colleges if student aid and loan programs are curtailed to any degree, as a rising share of students are dependent on these funding sources.
I can’t give too much of the report away but here are three highlights:
1) Enrollment declined in 2012 at nearly half the responding universities.
2) For FY 2013, many universities are projecting either net tuition revenue declines or revenue increases that will not keep up with inflation.
3) Online course enrollment is beginning to alter the business model of US higher education.
Although the report is written for bondholders, it’s a great look into what’s affecting higher education.