Emerging business models for MOOCs
Gilfus Education Group (2012) Coursera will profit from ‘free’ courses, competition heats up, Gilfus Education Group blog, undated, accessed November 12
Gilfus Education Group, an independent third party think tank out of Washington, DC, sets out eight ‘monetization strategies’ for MOOC providers such as Coursera, and three possible business models (Freemium, Value-added, and Corporate Social Responsibility).
The blog also provides links to three contracts publicly posted by institutions with Coursera contracts (Michigan, Illinois and Toronto), where it appears that the institutions get between 6-15% of revenues (presumably just from their own MOOCs), while Coursera gets 20% of profits, after all expenses are paid (presumably the venture capitalists/investors get the other 80% of profits).
Gilfus comments that: ‘Sustainability is not assured with the MOOC organizations until they can find an economic model that rewards all stakeholders. It might in fact be easier for existing LMS companies to pursue these models as the technology already exists on campus. Simply put companies like Blackboard, Desire2Learn, Moodlerooms and others are quickly devising strategies to develop high quality courses in addition to their current capabilities.‘
Indeed, all a company like Desire2Learn or Blackboard needs to do is set up a portal of online courses available for free from existing universities already using their LMS for fully online credit course delivery (with the institution’s agreement of course). Instructure’s Canvas Network already does this and already has ‘open’ courses from several universities (University of Central Florida, Ball State, Brown, Utah State and the University of Utah are just examples)
But even that isn’t really necessary. If the institutions are already offering online courses for credit, the institutions could handle the rest, making available very quickly, for free, a vast range of quality online courses, but not for credit, so why would they sign up with Coursera, or even an existing LMS company?
The universities already with credit online courses just need to tweek their registration system to distinguish between free, not-for-credit students and tuition-paid credit students. The non-credit version is unlimited in admission, but non-credit students get no tutorial support or individualized assessment (as in current MOOCs), whereas the credit students get the full works. This is an extremely low-cost way of opening up all your teaching to the general public. The only advantage of using a third-party portal such as Desire2Learn or Coursera would be to have one central point with a vast range of free courses from many different institutions (such as iTunesU). However, there would be no direct profit to the universities from this approach.
But just in case you were under the impression that it is openness that these institutions are interested in, I need to disabuse you. You have to wonder why publicly-funded universities in particular (such as the University of Toronto) want to join Coursera if it’s not to make money. Isn’t there though some conflict of interest here, or am I missing something? (Perhaps we should change the name to MOCCs – Massive Online Corporate Courses).
What elite institutions such as the University of Toronto are doing in fact is trying to get into online learning on the cheap, and for profit, after years of turning their noses up at it. But now Stanford, MIT and Harvard are doing it, it’s OK. Shame on them.
Thanks to Richard Pinent, University of Ottawa, for directing me to the Gilfus Education Group blog post.