Why don’t we see the rising costs of college as price gouging?

College has become expensive because prices have consistently risen at rates above inflation for quite some time.

A chart from this Wikipedia article shows cost of college since the 1980s shows tuition has increased about 3x cost of living and 2x medical costs.

If private industry raised prices so consistently, price gouging would be a common criticism.

The closest we seem to get to criticizing college costs is simply lamenting it, as if it’s just some force of nature that can’t be reckoned with.

If you are sensitive to price gouging in the private sector, can I ask why you aren’t as sensitive to it in college education?

Subscription Fatigue

What gives? Everybody seems to want $4.99/month from me. “It’s just a cup coffee,” they prod.

I get it. A few businesses did well with the ‘subscription model.’ A classic example is Netflix vs. Blockbuster. Stitch Fix subscription-fied clothing.

The case sounds good to managers. Subscriptions get more of their company’s revenue onto a recurring basis where customers, once signed up. face behavioral barriers to canceling. It feels like this reduces the exposure company revenue has to the whims of customers on a transactional nature.

But, as a customer, I’m at that point where each new subscription, even though it’s ‘just a cup of coffee,’ is too big of a hurdle for me to agree to. Subscription fatigue.

I’m guessing I’m not the only one.

Just as they are a barrier to cancelling, I wonder if subscriptions are becoming a barrier to adoption?

Also, I think subscriptions act as a veil that keeps managers from thinking about what really matters: what customers want.

They see Stitch Fix and think customers want to buy their clothes on subscription.

They miss that maybe Stitch Fix customers really want to get new clothes without having to to go through the trial-and-error process to become an expert shopper.

Update: It seems like businesses should explore mixed models, so customers can transact how they choose. Some may prefer subscription, some may prefer transactional.

Stitch Fix makes it easy to do both.

Discovery+ does not. Subscription is the only option.

MLS is no transcendent soccer

It occurred to me today while reading some back and forth on pro/rel, soccer in the US and and in Europe that opponents of pro/rel miss something.

A key knock against pro/rel, from critics, is super clubs that win or contend for their league titles over and over again. These critics like the American system, that handicaps teams through a myriad of salary, draft and roster rules to achieve more competitive parity and less super clubs.

One comment I read today, pointed out that comparing the number of teams/clubs that have won the championship in MLS to Premier League is not the right comparison. A better comparison is to the two leagues under the Premier League in the U.K.’s soccer pyramid.

Those leagues have far more champions and a large number of clubs that have been promoted into the league and relegated down to the next league.

But, why compare to those leagues? After all, MLS is the top league in the U.S.

First, the level of competition in those leagues are more on par with MLS, because the payrolls are more on par.

But, that comment made me think there’s a more important reason.

The top leagues around the world have created what the critics the would call super clubs. These critics don’t understand why its fun to watch the same clubs in contention year after year.

But, for fans, those leagues have created clubs and soccer that transcends geography.

What does that mean?

Lots of folks around the world, not just in their home cities, follow Manchester United, Arsenal, Liverpool, Barcelona, Real Madrid, Juventus, PSG and Bayern Munich, among others. Even more have heard of them.

The attention garnered by teams in MLS and the 2nd and 3rd tiers in Europe is limited to the populations in the towns around them or people with affinities to those towns.

The big clubs transcend this geography because they have the world’s best players and best coaches. Their coaches are less constrained by budget to get the players that can execute their systems.

Soccer fans around the world want to watch the best players and best clubs for lots of reasons. They enjoy watching the top players and teams.

They want to see how the top play. They want to see what’s possible. They want to see results of all the hard work those players put in and the talent that goes with. They want to see how the coach has pieced together a masterpiece to execute their vision and how they handle adversity and adjust game plans, rather than watching a coaches make due because they that had to make tough trade-offs to make a budget.

While I think it’s tough to peel the apart the affinity folks have for a club vs the club’s players and performance is tough, Man United is a good example of what happens when you don’t have the performance. They have good players, but that’s not enough and and the club has lost a little bit of the transcendent footing over the past few years as they have struggled with performance.

I’d argue that its owners might think the game is just about getting the best players and misses the part where you have to get managers that can build the teams that can execute their winning vision. In Man United, I see a team of good players, where the coach, like coaches in the U.S., have to make due with what they have, rather than get the right pieces for their game plan.

And, while soccer fans love to follow their transcendent favorites, they also love to follow their local teams and cheer them on, too. Those are the 2nd and 3rd tier leagues in England and MLS, maybe, if they have a local team.

These soccer fans don’t get bored watching their transcendent teams continue to pile on results because they are watching the best do what they do.