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Colleges have been receiving a LOT of new applications from students, at both the undergraduate and graduate levels.  I can’t say that I’m surprised.  Whenever there’s a recession, people use this time to increase their IQ, retool their skill sets and/or hideout before (re)entering the workforce.  This is in addition to the general trend of increasing numbers of high school graduates.

Businesses that service the education space, while not recession proof, are in a pretty good position, recession-wise, depending on the nature of the business.  These companies are hurt by the recession, since their customers make budgetary cuts, and thus, may slash certain spending.  However, this issue tends to be a little mitigated because they offer solutions that either save money or produce incremental increases in costs that are mostly offset by the benefit. 

Think about it. 

More students, means more tuition & fees.  Attracting students…and then retaining them is key to making money.    Duh!  After all, a four year student pays more in tuition, fees, books, room and board, than a student who drops out after the first year…and way more than a student who doesn’t go to that particular institution.  You’d be surprised at how many institutions still don’t get this…

Nonetheless, intuitions are generally seeing more applications.  Imagine being in admissions and receiving 75% more apps than last year.  You’d pray for a solution that could help you more efficiently and accurately manage the influx (this is classic benefit > cost).  Companies like Intelliworks make such apps.

So that’s one aspect.  Another is the non-traditional route, where students are doing distance learning or some hybrid (maybe some lecture and some web-based learning) or are “non-traditional” students, like working adults.  Institutions such as Strayer University and the University of Phoenix have long been fixtures in this space.  Others, like K12, hit the primary education space.  They’re content companies…they provide the curriculum. 

Other companies provide the tools to make learning easier and better, thus, enhancing retention rates.  I’m thinking of Blackboard, which provides the software for web-based learning (among other things).  When I was in school, we used a different app, but had the same functionality – profs could post lecture slides on the site; student groups can post their work from a group project, etc.  It made learning a heck of a lot easier.

And think about other companies in the vertical, like Princeton Review.  No doubt that before the increase college applications, there was an increase in college admission test taking.

So, I don’t think that revenues will necessary sky rocket for these companies.  But I do think that, among the companies in a recession, education companies can make a case for being well position in a recession.

This is an article in Venture Beat.  It discusses Adeo Ressi’s views on the current venture capital industry and that all signs are pointing to a need for change in the venture capital business model.   

Check out slide #10.  There are a LOT of me too businesses.  I can’t help but think about Mixx.com.  It was a straight bite off of DIGG.  I couldn’t (still can’t) tell what the better mousetrap is with Mixx, but they might have something up their sleeves in the mid to long term. 

A little bit ago, I wrote a blog on why video games are recession proof. The theory is that people want a nice form of entertainment that, in a recession, is extremely low cost. Think about it. For about $50 for a brand new game, you get unlimited play for the LIFE of the game. The means the cost/play or cost/hour of play is as close to zero as you can get. Compare that to the movies. That cost is $9/play or maybe $4.50/hour. It’s off the chain for most popular concerts.

So why would movies do well in a recession? I have a couple of thoughts…

1. People like going out. In a recession, this truth still holds. And in an environment when there are so many reasons to stay home, it’s still true. For example, the ungodly number of social networks, video chat, AIM and other ways (like the phone) to maintain contact with friends, in addition to movies on demand and the old tried and true, TV, are some of these reasons to stay home. These should not be underestimated.

2. Compared to other forms of entertainment, going to the movies is relatively cheap (assuming that you eat before/after the movies and avoid the concessions, which can eat a whole in your pocket). It always gives you something to talk about afterwards too.

3. The reason to go out to a movie is because something is good. There were so many movies I wanted to see this summer it’s ridiculous (The Hulk and Batman being two of them). This is very crucial. If there were horrid movies at the box office, theatres would not be doing well at all.

What’s interesting is that some theatre chains (the industry is coming off of a period of consolidation) are doing okay. Theoretically, consolidations should be good since you can squeeze synergies out of most of them. With the theatre consolidations, initially, I was wondering whether it would good, since the industry wasn’t doing that well. I kept myself in check, because you can never scold good companies in a bad industry (don’t throw the baby out with the bathwater – type of thing).

Here’s a wonderful blog from Wired.com that gives some stats on the matter.