Betamax was the better machine and everyone in the business knew it. It had a sharper picture, better sound, a tape that aged well. Sony figured that superior quality would be enough and held their license close. JVC gave their VHS format away to anyone who wanted to build a machine, and by 1984 forty companies were making VHS players while twelve still made Betamax. Ultimately the better technology lost to the one that you could actually buy.
Higher education is running Sony’s playbook on academic credit. And it’s losing the same way. Difficulty buying erodes margins and trust.
The loss in value for the customers (students) who attempt to transfer shows how bad the problem is. A 2017 Government Accountability Office study found that students lose 43 percent of their credits, on average, when they transfer. And if you’re leaving a private for-profit that approaches a total loss of credit. Research published in Sage’s American Educational Research Journal reinforces the problem. They found that roughly 80 percent of community college students intend to earn a bachelor’s degree, but only about a third ever transfer, and of those who do, two-thirds lose some credits while 40 percent lose all of them. Meanwhile, transfer volume is climbing. University Business reports it rose 4.4 percent this fall, nearing pre-pandemic levels, yet transfer students still graduate at lower rates than their peers, held back by a system that makes carrying credits across a state line feel like smuggling. Like the media wars, every institution is running a proprietary format and dares the student to find a system that will translate their media.
Consider how these wars tend to play out. In audio, the format winner wasn’t the best codec, or even the most open one. WAV was open and patent-free. AAC sounded better at smaller sizes. MP3, even while being patent-encumbered until 2017, won because every device agreed to read it. This is exactly what gen-ed credit is supposed to be like, an English 101 class that any school will accept without a fight. As Research.com reports, what still has to be addressed are the transfer of more specialized credits — the labs, the prerequisites, the courses gatekeeping a competitive major. Gen-ed is the MP3. And everything else still needs to find a way to play it.
Video tells a more hopeful story. After the Betamax bloodletting, the industry did something radical. They agreed. The DVD Forum settled on one standard before launch, there was no war, and the home-video market grew into something larger than VHS had ever been. When the industry forgot the lesson and let Blu-ray and HD-DVD fight it out a decade later, consumers did the rational thing and sat on their wallets until a winner emerged. Standardization grew the market. The format war froze it. JVC had understood the economics from the start: a large market at thinner margins is worth more than a small one at fat margins. Higher education is only beginning to understand the possibilities of this switch in thinking. Could making their systems more open and easier to use actually expand their market potential?
For too many institutions, credit loss is not a failure of the system. It is the system. And forcing transfer students to retake courses is revenue capture. As a short-term revenue tactic it may be effective, but as a long term strategy it is critically flawed. The people who pay, the students and the taxpayers behind them, do not find credit loss to be prudent stewardship. They experience it as a toll extracted from the people who can least afford it, and that becomes a large part of why public faith in the value of institutions has faltered.
Another analogy from media’s attempts to protect their value while paradoxically eroding it are the cable companies approach to streaming. These companies did not want to become “dumb pipes,” so they bought content: AT&T took Time Warner, Comcast took NBCUniversal. Now many of these same marriages are becoming unwound, because ultimately the cable operators were better at running infrastructure than content and their management and shareholders eventually realized it. The relevant question for a provost is which business the university is actually in? The content is made by faculty and instructional designers; the university supplies the brand and the credential that let that content command a price. When an institution refuses to let credits travel, it is not protecting its teaching. It is forcing a bundle, like the cable package you cannot unsubscribe a single channel from. And we are seeing how that plays out, forced bundles force actions. The cord gets cut. Students will figure out how to assemble their credits from wherever is cheapest and fastest and collect the credential from whoever will confer it, and the institution that mistook its bundle for its value will get routed around.
The obvious objection is that closed systems can win; Apple built the most valuable company on earth behind a walled garden. But look at who is actually winning enrollment in higher education. Western Governors, Southern New Hampshire, and ASU Online do not dominate by hoarding credits. They dominate by importing them. They accept articulated credit from almost anywhere, and then their completion machinery takes over. Openness on intake is their competitive weapon; it is the reason a stopped-out adult carrying a transcript full of orphaned credits can finish with them instead of starting from zero. The hyperscalers are the universal player that reads every disc. Their walls are around the experience, not the front door.
The technology to make every credit readable is arriving. AI is turning course-to-course equivalency from a labor of manual comparison into something closer to transcoding. At Marshall University, a team led by assistant provost Julia Spears is training AI on skills taxonomies to match what a student learned at one institution to what they need at another; CourseWise, a Berkeley lab spinoff written up in Forbes, is doing the same at platform scale. The accreditors are moving too. C-RAC’s guidance sets the right default — that credit should count toward completion unless there is evidence the learning outcomes were not met, rather than being denied out of habit — and, as Inside Higher Ed reports, more than 160 institutions have joined a new SACSCOC consortium to build common equivalencies for general education. That consortium is the DVD Forum: an industry choosing to standardize instead of bleed.
Texas offers a working proof. Its common course numbering system means a gen-ed course carries a legible label from one campus to the next, and that legibility helps every Texas student who moves. California, lacking the same coordination, is still fighting the old war — the backdrop for EdSource’s reporting on Assembly Bill 927, where community colleges trying to offer their own bachelor’s degrees keep running into CSU campuses determined to protect their turf. Austin Community College has chosen the opposite posture, working, as The EDU Ledger documents, to make its students’ credits travel to four-year destinations, and pairing that with a Wake Forest–funded effort to strengthen the general education core nearly every ACC student passes through.
One catch: articulation agreements alone don’t move the needle. Studies going back over a decade found states that signed transfer agreements saw no real bump in completion. A PDF that says “we accept your credits” is Betamax with a sticker on it. What actually works looks like UCF’s DirectConnect: guaranteed admission and shared advising across six community colleges. Friction removed, students supported.
Forty-two million Americans are sitting on college credits and no degree. What’s stopping most of them isn’t ability. It’s that friction. The cost of transferring, the maze of requirements, the transcript held hostage over an old parking ticket. Lower the friction and more will finish.
In the evolution of credit, there will be winners and losers, but there already are, under a system that’s antiquated and defended anyway. Doing nothing is not a successful strategy. The losers will be the schools still running Sony’s playbook into a demographic headwind, guarding a captive market that’s already walking out the door.
Make the credits travel.
