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Alex Tabarrok
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Teaching today is like a stage play. A play can be seen by at most a few hundred people at a single sitting and it takes as much labor to produce the 100th viewing as it does to produce the first. As a result, plays are expensive. Online education makes teaching more like a movie. Movies can be seen by millions and the cost per viewer declines with more viewers. Now consider quality. The average movie actor is a better actor than the average stage actor. If you were making a movie with a potential audience in the millions wouldn’t you hire the best actors? With more viewers it also makes sense to substitute capital for labor, adding special effects, scenery, music and other quality improvements resulting in a movie experience unlike any that can be created on stage. Is there something ineffably great about a live performance? Occasionally, but the greatest stage performances are seen by only a handful of people.

The parallel between movies and plays and online and offline education has further lessons. First, the market for teachers will become more like the market for actors, a winner-take-all market with greater inequality and very big payments at the top. A principal player on Broadway might earn $62,500 a year, perhaps twice what a minor player might earn.[3] One of the biggest stars in the world, Julia Roberts, made $35,000 a week, or $1.62 million in a 50-week year performing in Three Days of Rain. Nevertheless, her stage salary pales in comparison to her typical payment of $10–$20 million per movie for much less work. Bigger markets support larger salaries, so the best teachers will earn much more in an online world.

Second, movies are better in many respects than plays, but no one doubts that a taped play is worse in all respects than a live play. Many of the early online forays into education were simply taped lectures, boring, flat, and worse than the same in-class lecture. To take full advantage of the online format, an online lecture has to be different from an in-class lecture. Different mediums demand different messaging. I turn to some of these differences now.

Alex Tabarrok on why online education works. Tabarrok is the author of the TED book Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast.