MOOCs aren’t all about money but when it comes to their future,
money does matter. Calls for the monetisation of MOOCs are reasonable, although
a little at odds with the failure in the past to look for the monetisation of
Higher Education as a whole. In many ways MOOCs are a response to the
ever-rising costs of higher education that has led to record levels of student debt
and the worry that defaults may be on the horizon.
No one should deliver a MOOC without considering income but
pure ‘monetisation’ is the wrong term, as a MOOC is an activity that needs to
be seen in terms of both costs and income over time. So I’ll come at this as if
it was both an income and cost issue, namely its impact on your profit &
loss account. Note also that an institution could position its financial goal as an investment, aim for break-even or go for profit. Monetisation is ot just about profits.
1. Investment
A MOOC can be seen as a strategic investment by an
institution and be paid for straight from its existing budget. The rationale
for this can be a number of things that we’ll come to in terms of reducing
costs and other revenue streams. For the moment, one could simply fund such an
initiative from your teaching, technology or marketing budget. There is also an
argument for funding it as research. Interestingly, some institutions clearly
see themselves as leading the charge and developing MOOC software for use by
others.
2. Not-for-profits
Not-for-profits have been very active in this area. As a
Trustee of a major education charity, I have supported a very large charity investment
in a single MOOC in the UK. Well known charities in the US have also been very
active. Mitra’s million pound TED prize is going towards a MOOC of sorts
(school in the cloud) and the WISE $500,00 prize is another possible sources.
3. Government
In many countries this is the primary course of funding and
we have already seen government funding go into Futurelearn, via the Open
University, in the UK, albeit in a rather opaque fashion. Tapping into
government funds to increase access, I’d suggest is a good model for killing
two birds with one financial stone, rather than woolly ‘access offices’.
4. Private equity
They have been active in the US, most notably with Udacity
and Coursera, but also in other initiatives. These investors take calculates
risks and this is one way for the system to hedge its risk.
5. Private donations
Institutions often tap into alumni for donations that go
into expensive, and sometimes ill-advised, capital projects, usually buildings
named after the donor. An alternative is emerging, where donors contribute
towards courses. This is a fine idea, especially if the donor is an interested
party, with some background and credibility in the subject.
6. Sponsorship
Google, AT&T and others have been active in sponsoring
MOOCs that seem relevant to their mission. There is every reason to see this as
a substantial and useful source of revenue. It is common the arts and arts
education, so I see no reason as to why it should not be used in education.
7. Students pay
Udemy use this model and with reasonably low costs that attract
students who see value for relatively little money. Freemium models may move
towards fees for popular and sought after courses or a more n-depth learning
experience after a taster.
8. Certification
This is top of the list, as a portion of MOOCers will want
certification and be prepared to pay for it, at various levels. Given the large
numbers of potential participants, even at a relatively modest price point,
this could be lucrative. Remember that, once the fixed, up-front costs have
been paid, the on-going cost-per-student are small. Coursera’s Signature Track
fees are $30-100.
9. Proctored assessment
Many MOOCs offer online and offline assessment, on a shared
revenue basis, with the likes of ProctorU and Pearson VUE. This is an additional
high-value proposition that can attract prices greater than that of volume
certification.
10. Books/materials
Some MOOCs have already linked the course to compulsory or
optional course materials such as existing textbooks but there’s also potential
sales from specialised course materials, such as software and equipment.
11. Summer schools
Universities have pitifully low occupancy rates, one reason
for their high costs, so offering ‘summer schools’ or other ‘holiday period’ ;earning
experiences could be one way to generate income, especially from the
intellectually curious, who are less interested in certification. The Open
University, in the UK, has been doing this for decades.
12. Recruitment
Recruitment referral (with student’s permission) is an
existing revenue stream, especially in IT and other technical MOOCs, where
high-end, practical skills are sought from a Global pool. The referral comes,
of course with the employers knowledge of what the MOOC delivers and demands of
its students.
13. Advertising
Any online delivery that attracts large numbers of eyeballs,
can generate advertising revenue. In this case the advertisers know exactly
what sort of audience they’re attracting, and as MOOCs develop, this data will
become invaluable. It’s not just the number of participants, now in their
millions, but the intense amount of times and time they spend on the course.
14. Future indigenous student income
MOOCs aimed at high-school students will increase your
chances of getting those students into your institution or at least getting the
best of those students.
15. Future overseas students income
Overseas income is a £5 billion industry in theUk and could
rise to £16.9 bllion by2025. These have become an essential source of income
for many institutions but as countries, especially in India, China and the Far
East. develop their own, large, world-class institutions, and visa restrictions
bite, revenues may fall. MOOCs have remarkably diverse audiences, with students
often coming from every corner of the globe. This must be a way of attracting
more students to study and pay fees at your institution.
16. Parents of future students
These are the people who pay top dollar for education and
often play a pivotal role in what institutions their children apply to. MOOCs
targeted at this audience make perfect sense. It gives the parent a feel for
the institution and even the academic(s) teaching there. These are the
‘influencers’ that marketeers love to target.
17. Future alumni contributions
MOOCs are already being targeted at alumni, as in many countries,
especially the UK, the vast majority of alumni remain an untapped source of
income. This is a way of staying in touch and marketing to alumni in a way that
is relevant to both parties, intellectually and not just financial begging.
18. Brand capital
A University sees its staff come and go, its students come
and go, its research owned and delivered by publishers and others. The core ‘value’
is in the brand, that’s what endures and has to be built, enhanced and
protected. MOOCs undoubtedly enhance brands as they are a form of massive, indirect,
online advertising.
19. Reduced capital costs
Universities have now realised, despite all the warnings, that
they have been spending far too much money on bricks and not clicks. The race
is not now who has the biggest campus packed with the most buildings but the
online war for students. To continue with endless capital projects at the
expense of MOOCs, and other online initiatives, is simply to load up on-going
maintenance and real-estate costs. Just think what one could do if tere were a moratorium
on building in Higher Education.
20. Reduced faculty costs
Many faculty don’t like teaching seems – OK I’ve said it –
but it’s true. Many yearn for a reduction or freedom from teaching. MOOCs are
one way to lessen the load on faculty. Take
some high-volume, undergraduate courses and put them online (or partly online).
Conclusion
I’m pretty sure I’ve missed a few other potential income
streams and welcome additional suggestions. I’m also sure there are arguments
to be made on costs and income around lower drop-out rates for students that
prepare by doing a MOOC. There may even be a way of using ‘access’ funds. Whatever
the future for MOOCs, it strikes me that money is not a big problem. The cost-per-student metric shows that MOOCs deliver volume therefore lower costs. This is the scaling up that technology inevitably brings leading to lower delivery costs. It has happened in almost every other area of human endeavour and its about time it happened in education..
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