The New York Times called them “the revolution that has higher education gasping” and the Chronicle added that MOOCs question “the future of teaching” and even “the value of a degree.”
What exactly is a “MOOC,” anyway?
Many universities have long offered online courses and even entire online programs. But beyond the different delivery method, most of the fundamentals of traditional education–tuition, capped enrollments and the earning of “official” credit–are present.
MOOCs, on the other hand, remove the barriers of cost and limited enrollment, offering an intriguing model for scaling higher education.
The predominant form of content is the video lecture, and students submit assignments and complete quizzes within the course environment. Since anyone with an internet connection can enroll for free, one-on-one attention from the professor is impossible. Instead, students interact in course forums and grading is done either by computer or by teaching assistants.
Some MOOCs also utlilize large-scale crowdsourced methods for discussions and peer evaluation. As of now, students can earn certificates of achievement but not official course credit for their efforts.
There has been some criticism that by relying on video lectures, these MOOCs represent an outdated teacher-centric paradigm and fail to take advantage of more collaborative, interactive pedagogies and increased personalization made possible by new technologies.
The Relationship Between MOOC Providers and Universities
From some accounts, it may sound as though MOOC companies and brick-and-mortar universities are locked in fierce competition over the future of higher learning. But the predominant arrangement is for MOOC platforms to partner with universities in order to deliver free online courses to the world.
The biggest names in the business include Coursera and Udacity, both for-profit companies started by Stanford professors. There is also edX, a nonprofit venture run by three universities. Another name frequently mentioned in this space is Khan Academy, which offers its own huge library of educational videos and automated practice exercises, although it does not partner directly with universities for content.
Coursera currently partners with 62 elite universities from all around the world.
What’s the Business Model of MOOC Providers such as Coursera and Udacity?
Today, a student from anywhere in the world who logs into Coursera or Udacity can choose from hundreds of courses in Chemistry, Engineering, Music, Psychology, Art and much more, all without paying a dime.
But will this free arrangement continue?
One might assume that this educational model is a great way to keep costs low. But running a high-quality MOOC is far different from simply dumping a bunch of videos online.
There are plenty of costs that must somehow be recouped including software engineering, massive bandwidth, and a whole lot of instructor labor (some professors report working for three hours to prepare for every hour of video lectures).
To this point, venture capital has financed the operations of these MOOC providers. Coursera, for example, raised $16 million from the firm Kleiner Perkins Caufield & Byers in early 2012. But for such investment to continue and for MOOCs to be sustainable, they will need a business model that will reward all stakeholders, including investors and universities.
One of the core principles of MOOCs is that they should remain free for the end user. So where is the revenue going to come from?
It turns out that the business model of MOOC providers such as Coursera is still very much up in the air. The mantra of many startups is to “build first, monetize later” and to this point that has been the case.
There are a few small revenue-generating methods already present including Amazon affiliate links for the purchase of recommended course texts. But this alone won’t come close to satisfying investors.
A contract signed between one top university and Coursera was recently made public, and it revealed not one but several potential revenue-generating ideas that MOOCs might use. These strategies include sponsorship of courses (advertisements), university-branded certification, individual tutoring, authentic (physical) assessment, and recruiting services linking MOOC students to potential employers.
More recently, Coursera made a couple of big moves towards monetization that may help explain its future plans.
First, the company launched a “Signature Track” for select courses that gives students the opportunity to earn a “verified certificate” that “securely links your coursework to your identity, allowing you to confidently show the world what you’ve achieved on Coursera.”
The system uses photo IDs and students’ unique typing pattern to link their coursework to their real identity, and Coursera reports that this will cost between $30 and $100 depending on the course. This idea suggests a “freemium” model for MOOCs in which the content itself is free, but students must pay if they want to verify their accomplishment.
In addition, Coursera received approval from the American Council on Education to offer five MOOCs for official college credit. Universities themselves will still have to decide whether or not to accept the credit.
Recognizing the Challenges
Although it’s easy to get excited by the potential of free and open education for the masses, but one recent comment on the Chronicle articulates the challenge well:
“Access to information (data) is relatively easy to scale. Teaching is very hard to scale and not always possible.”
What are your thoughts on the long-term viability of MOOCs? Are they disruptive? All hype?
Andrew Walsh is the owner and editor of Social Web Q and A. He is a freelance writer, academic librarian and web entrepreneur. Check out his book Savvy for the Social Web.