Analyzing the Profitability of MOOCs!

Dear Commons Community,

The New York Times has a featured article on the profitability of MOOCs.  It starts with references  to Daphne Koller and Andrew Ng who started the online education company Coursera.

“The co-founders, computer science professors at Stanford University, watched with amazement as enrollment passed two million last month, with 70,000 new students a week signing up for over 200 courses, including Human-Computer Interaction, Songwriting and Gamification, taught by faculty members at the company’s partners, 33 elite universities.

In less than a year, Coursera has attracted $22 million in venture capital and has created so much buzz that some universities sound a bit defensive about not leaping onto the bandwagon.

Other approaches to online courses are emerging as well. Universities nationwide are increasing their online offerings, hoping to attract students around the world. New ventures like Udemy help individual professors put their courses online. Harvard and the Massachusetts Institute of Technology have each provided $30 million to create edX. Another Stanford spinoff, Udacity, has attracted more than a million students to its menu of massive open online courses, or MOOCs, along with $15 million in financing.”

All of this should bode well for MOOCs except no one has figured out how to make profit. One pessimistic analysis was provided by James Grimmelmann, a New York Law School professor who specializes in computer and Internet law.

“No one’s got the model that’s going to work yet.  I expect all the current ventures to fail, because the expectations are too high. People think something will catch on like wildfire. But more likely, it’s maybe a decade later that somebody figures out how to do it and make money.”

On the optimistic side, the article describes possibilities for charging students modest entrance fees, for licensing courses to colleges and universities and for charging fees for transferring MOOC credits to traditional college programs.  One conclusion was that:

“…educators predict that the bulk of MOOC revenues will come from licensing remedial courses and “gateway” introductory courses in subjects like economics or statistics, two categories of classes that enroll hundreds of thousands of students a year. Even though less than 10 percent of MOOC students finish the courses they sign up for on their own, many experts believe that combining MOOC materials with support from a faculty member or a teaching assistant could increase completion rates.”

I am skeptical about the last point mainly because with the open source movement well on the way, there is a good deal of material freely available for the asking.  Why pay for it?   Also faculty and instructional designers in many colleges are developing their own online support materials that might not be as glitzy as Coursera’s but will be preferred because they are customized to the instructor’s teaching style and learning goals.






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