University Teaching as E-Business?
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Case Study: Fathom

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NB: These draft case studies, compiled by Shannon Lawrence, are an internal resource for the University Teaching as E-business? research project. Originally released in October 2001, they were updated in March 2002. They were gathered from numerous sources, including news articles, press releases, scholarly reports, and company websites. In many cases, information presented herein was taken directly from The Chronicle of Higher Education's longitudinal series of articles on Information Technology and Distance Education, which represents the single best source for information about this evolving universe.

Fathom Knowledge Network Inc. ("Fathom") is a for-profit spin-off of Columbia University, established in April 2000, that operates as a consortium of elite education and cultural institutions (see Table 1). On its website (www.fathom.com), Fathom offers over 600 courses from partner institutions, boasting 800 faculty contributors, 750,000 unique visitors, 100,000 registered users and hundreds of students enrolled in online courses.

Products/Services

Fathom distributes lectures, interviews, articles, and exhibits by faculty and experts from some of the world's leading universities, libraries, museums, and disseminators of research. Online courses and seminars are available, as well as books and other products. Unique reference content spans all disciplines and fields of study and is organized in "knowledge trails," which are groups of Fathom features or reference entries that explore a common subject or theme.

Unlike other e-learning ventures, Fathom seeks to provide a more comprehensive, interactive site that allows the user to chat with the professor and to purchase the book under discussion, without ever leaving the site. Fathom’s competitive edge, however, is its high quality, authenticated content. All content is attributed to the contributing institution and its faculty or staff. Partner institutions contribute mainly content and brand and pay for the development of their respective courses and seminars. Course development takes anywhere from three months to a year. Fathom does not develop original courses, but takes a commission of about 20 percent on each sale.

Fathom does not offer degrees, though individual institutions may offer credit for courses taken through Fathom. Classes that can be taken for college credit or for personal enrichment cost up to $500 for 7 to 12 weeks of instruction. Shorter seminars cost between $50 and $200.

Governance

In order to maintain quality control, Fathom relies on two separate groups: 1) a group of faculty and administrators from Columbia University Teacher’s College, which approves all courses offered on the site, and 2) an academic advisory council that oversees other academic content on the website to ensure Fathom’s standards of academic and editorial integrity. The Council is chaired by Jonathan Cole, Provost of Columbia University, and includes leading representatives from the Fathom consortium who represent a range of disciplines and responsibilities within academic and intellectual communities. The Council was established by Fathom's Board of Directors to provide strategic oversight of Fathom programming, to alert Fathom to scholarly trends, and to serve as a resource on all matters that pertain to either academic content or the academic community.

The Academic Council advises and supports Fathom in its mission to have programming that is of the highest academic quality and that also welcomes the diversity of opinion accompanying the creation of original scholarship and knowledge. The Council helps ensure that Fathom's content reflects the integrity of its universities, libraries, museums, and research institutions, and the ideas of individual faculty and staff members. The Council, chaired by Jonathan Cole, Provost of Columbia University, includes leading representatives from the Fathom consortium who represent a range of disciplines and responsibilities within academic and intellectual communities.

Ann Kirschner, CEO of Fathom, maintains a close relationship with the Columbia University’s Executive Vice Provost, Michael Crow, in order to better understand how the university, and its decision-making processes, function. Columbia University maintains a five-member faculty panel that reports on Fathom’s progress to the faculty senate.

Finance/Strategy

Fathom originally intended "to capture the high-end knowledge/education market by creating a top knowledge destination web site." (Columbia, April 3, 2000) The venture planned to rely on users who, intrigued by informative articles, would buy scholarly books and distance-education courses produced by a number of institutions, from which Fathom would get a marketing fee or a percentage of a sale. Only two months after the site went online, Fathom's original business plan did not show potential for attracting either the customer base or outside financing that its developers hoped. In February 2001, Fathom changed its business strategy to focus on students seeking courses in professional development and on students interested in lifelong learning, and to de-emphasize marketing to students seeking to complete their degrees. Fathom now offers users more short, free courses to introduce them to the idea of online education, before attempting to try to sell them on longer, more expensive courses. Fathom’s new primary direction is providing noncredit courses. This new strategy parallels a partnership with George Washington University's open architecture course software, Prometheus. Utilizing Prometheus software, the seminar material is presented in a variety of media, including text, images, audio, video, and animation. Following this "virtual lecture," participants can join discussion boards, take a self-assessment test, or learn more through related educational links. The free seminars are expected to take between a half-hour and two hours to complete.

Fathom also scaled back marketing and advertising in order to cut costs and keep the project afloat, and is concentrating instead on building a word-of-mouth customer base of students, professors, and alumni from the member institutions. Based on this new approach, the company expects to be able to begin covering its regular annual operating costs for technology, personnel, and marketing by the beginning of 2003.

Fathom also provides consulting services, which appears to be a new strategy. Most recently, Fathom was hired by the AARP to redesign their website and provide educational content.

Fathom’s ability to continue operating in new directions is partly attributable to the willingness among Columbia University’s administration to make Fathom grow through university funding and support. Columbia considers Fathom a significant part of its three-part digital media strategy, which involves the University arena, the interface between the University and the market, and the market arena. Virtually all of the initial financing, $18.7 million, came from Columbia, and the university dedicated another $10 million to the project in February 2001 to keep it operational for an additional two years, at which time it expects to be self-sustaining. Financing for Fathom has been generated through the university’s Strategic Initiative Fund, which funds innovate projects, include many digital ventures, through patent revenue. This fund is the only uncontrolled revenue stream of the university because it comes with no company or government agency agenda. Executive Vice Provost Michael Crow, who prides himself on being an "academic entrepreneur," is in charge of the fund. Mr. Crow believes that funding strategic learning initiatives will expand the traditional role of the university but that doing so requires "us[ing] knowledge as a form of venture capital."

Update (February 2002)

Fathom began advertising in October 2001, targeting mostly the consumer market through ads in The New Yorker and other publications, and had partnered with Elderhostel in November. (It is notable that Columbia opened a portal site in November 2001 to showcase miscellaneous online university offerings, though there were no expectations that it would draw an audience away from Fathom.) By February 2002, however, they had shifted their approach and added several hundred mostly noncredit corporate training courses by SmartForce, Zoologic, Kaplan, and PrimeLearning.com, which increased their overall offerings by 20%. This falls within the range of their original business plan, though the companies won't become full partners in the Fathom consortium.

References

• Arnone, Michael. "Columbia Starts Online-Education Portal." The Chronicle of Higher Education, 30 November 2001. http://chronicle.com/weekly/v48/i14/14a03103.htm
  
  
• Arnone, Michael. "Fathom Adds Training to Distance-Education Offerings." The Chronicle of Higher Education, 22 February 2002. http://chronicle.com/weekly/v48/i24/24a02701.htm
  
  
• Blumenstyk, Goldie. "Knowledge Is 'a Form of Venture Capital' for a Top Columbia Administrator." The Chronicle of Higher Education, 9 February 2001. http://chronicle.com/weekly/v47/i22/22a02901.htm
  
  
• Blumenstyk, Goldie. "Temple U. Shuts Down For-Profit Distance-Education Company." The Chronicle of Higher Education, 20 July 2001. http://chronicle.com/weekly/v47/i45/45a02901.htm
  
  
• Carlson, Scott. "Columbia University's Fathom Seeks Users Among 'New Yorker' Readers." The Chronicle of Higher Education, 30 October 2001. http://chronicle.com/weekly/v48/i12/12a04003.htm
  
  
• Carlson, Scott. "Columbia U. Makes a Third Foray Into Distance Education." The Chronicle of Higher Education, 15 November 2001. http://chronicle.com/daily/2001/11/2001111501u.htm
  
  
• Carlson, Scott. "For-Profit Web Venture Shifts Gears, Hoping to Find a Way to Make a Profit." The Chronicle of Higher Education, 9 February 2001. http://chronicle.com/weekly/v47/i22/22a03301.htm
  
  
• Carnevale, Dan. "Fathom Signs Deal With AARP." The Chronicle of Higher Education, 10 August 2001. http://chronicle.com/weekly/v47/i48/48a04903.htm
  
  
• Carr, Sarah. "Is Anyone Making Money on Distance Education?" The Chronicle of Higher Education, 16 February 2001. http://chronicle.com/weekly/v47/i23/23a04101.htm
  
  
• Carr, Sarah. "With National e-University, Britain Gets in the Online-Education Game." The Chronicle of Higher Education, 17 August 2001. http://chronicle.com/weekly/v47/i49/49a02701.htm
  
  
• Foster, Andrea L. "How a Princeton Classicist Leads in Instructional Technology." The Chronicle of Higher Education, 29 June 2001. http://chronicle.com/weekly/v47/i42/42a02801.htm
  
  
• Katz, Stanley N. "In Information Technology, Don't Mistake a Tool for a Goal." The Chronicle of Higher Education, 15 June 2001. http://chronicle.com/weekly/v47/i40/40b00701.htm
  
  
• MacLeod, Donald. "Fathom it out." Guardian Unlimited, 8 May 2001. http://www.guardian.co.uk/Archive/Article/0,4273,4182126,00.html
  
  
• Read, Brock. "A Digest of Recent Corporate News in Distance Education." The Chronicle of Higher Education. http://chronicle.com/daily/2001/11/2001111601u.htm
  
  
• Renzulli, Virgil. "Columbia, New York Public And British Libraries, Smithsonian, London School of Ecomonics, Cambridge University Press Found A Premier Interactive Knowledge Website, Fathom." Columbia University News, 3 April 2000. New York.
  
  
• "Seven Premier Online Course Partners Join Fathom" (Press Release). Columbia University News, 15 September 2000. New York.
  
  
• Tedeschi, Bob. "E-Commerce: Pushing Ahead With Online Education." New York Times, 12 March 2001. http://www.nytimes.com/2001/03/12/technology/12ECOMMERCE.html
  
  
• You, Jee Young. "Click and Learn: Fathom." Silicon Alley Daily, 13 August 2001. http://www.siliconalleydaily.com/issues/sar08132001.html#Headline9109