MOOCs are trying to discover a business model which works

21 Jul

Moi wrote about MOOCs in Can free online universities change the higher education model?
Often these online ventures will offer a certificate or badge to show completion of a course of study. Education Portal defines the difference between a certificate and diploma:

Certificate Overview
A certificate is earned by a student after taking a series of courses relating to a subject. Students often earn certificates to get a step ahead in the professional field of their interest and certificates may be offered in similar programs as degrees. For instance, there are certificates in business, literature and technical programs. In some technical programs, a certificate may be required.
There are also graduate certificates, often taken either alone or alongside a graduate degree program. In some programs, the student may use his or her electives to fulfill a certificate in order to make him or herself more desirable to a potential employer.
Certificate programs taken alone are similar to associate’s degree programs. However, they take less time because core academic programs are not required.
Diploma Overview
Diplomas are similar to certificates but often earned at clinical schools. For instance, a diploma of nursing is offered as an option besides an associate’s degree or bachelor’s degree. This diploma program is only offered at hospitals with specialty programs that provide training. A diploma often takes two years and involves as much clinical work as classroom.
Degree Overview
An academic degree can be earned at many levels, including associate’s, which takes two years, bachelor’s, which takes four years, master’s, which is two years beyond a bachelor’s degree, and doctoral, which is several years beyond a master’s degree.
A degree program differs from certificates and diploma programs in that it often requires the student to take core courses to support a more rounded education. For instance, at many universities, those earning their bachelor’s degree are required to take English, math, science, philosophy and history. Earning a degree also opens up many more potential doors to the student than would a certificate or diploma. Many careers require that the student has earned at least a bachelor’s degree; several career options require more than this. http://education-portal.com/articles/What_is_the_Difference_Between_a_Certificate_Diploma_and_Degree.html

Some online universities are awarding badges.
Lynn O’Shaughnessy reports in the U.S. News article, Digital Badges Could Significantly Impact Higher Education:

The John D. and Catherine T. MacArthur Foundation recently announced that it was launching a competition that will award $2 million to companies and organizations that can develop workable digital badges and badge systems.
The digital badge concept has gained friends in lofty places. U.S. Secretary of Education Arne Duncan, NASA administrator Charles Bolden and other high-level business, philanthropic, and technology leaders attended the kick off of the digital badge competition announcement. Duncan, who called the digital badges a “game-changing strategy,” had this to say: “Badges can help engage students in learning, and broaden the avenues for learners of all ages to acquire and demonstrate—as well as document and display—their skills.”
Americans could earn badges through skills and knowledge that they get in a variety of ways including informally, through their workplace, open courseware and other online classes, and even traditional colleges. http://www.usnews.com/education/blogs/the-college-solution/2011/10/04/digital-badges-could-significantly-impact-higher-education

https://drwilda.com/2012/01/23/can-free-online-universities-change-the-higher-education-model/

Jon Marcus reported in the Washington Post article, Online course start-ups offer virtually free college. http://www.washingtonpost.com/local/education/online-course-startups-offer-virtually-free-college/2012/01/09/gIQAEJ6VGQ_story.html?wpisrc=emailtoafriend
The New York Times reported about the online education trend in the article, Online Enterprises Gain Foothold as Path to a College Degree http://www.nytimes.com/2011/08/25/education/25future.html?_r=1&emc=eta1

Whether MOOCS can develop a business model is discussed in the Economist article, The attack of the MOOCs: An army of new online courses is scaring the wits out of traditional universities. But can they find a viable business model?

DOTCOM mania was slow in coming to higher education, but now it has the venerable industry firmly in its grip. Since the launch early last year of Udacity and Coursera, two Silicon Valley start-ups offering free education through MOOCs, massive open online courses, the ivory towers of academia have been shaken to their foundations. University brands built in some cases over centuries have been forced to contemplate the possibility that information technology will rapidly make their existing business model obsolete. Meanwhile, the MOOCs have multiplied in number, resources and student recruitment—without yet having figured out a business model of their own.
Besides providing online courses to their own (generally fee-paying) students, universities have felt obliged to join the MOOC revolution to avoid being guillotined by it. Coursera has formed partnerships with 83 universities and colleges around the world, including many of America’s top-tier institutions…..
Besides the uncertainty over which business model, if any, will produce profits, there is disagreement over how big the market will be. Some see a zero- or negative-sum game, in which cheap online providers radically reduce the cost of higher education and drive many traditional institutions to the wall. Others believe this effect will be dwarfed by the dramatic increase in access to higher education that the MOOCs will bring.
Mr Feerick predicts that the market will be commoditised, spelling trouble for many institutions. But Anant Agarwal, the boss of EdX, reckons the MOOC providers will be more like online airline-booking services, expanding the market by improving the customer experience. Sebastian Thrun, Udacity’s co-founder, thinks the effect will be similar in magnitude to what the creation of cinema did to demand for staged fiction: he predicts a tenfold increase in the market for higher education.
Sceptics point to the MOOCs’ high drop-out rates, which in some cases exceed 90%. But Coursera and Udacity both insist that this reflects the different expectations of consumers of free products, who can browse costlessly. Both firms have now studied drop-out rates for those students who start with the stated intention of finishing, and found that the vast majority of them complete the courses.
Besides LearnCapital, a Silicon Valley venture firm, and the World Bank’s International Finance Corporation, the participants in Coursera’s $43m fund-raising included Laureate, an operator of for-profit universities. Doug Becker, its boss, reckons that many established universities will soon offer credits towards their degrees for those who complete MOOCs. He thinks this will drive a dramatic reduction in the price of a traditional higher education, that will reduce the total revenues of existing providers by far more than the revenue gained by the start-ups. Still, if MOOCs reduce the cost of higher education by one-third, as he predicts, yet only earn for themselves 1% of that benefit, that would “still be a very nice business,” he says.
http://www.economist.com/news/business/21582001-army-new-online-courses-scaring-wits-out-traditional-universities-can-they

With any education opportunity the prospective student and their family must do their homework and weigh the pros and cons of the institution with with the student’s goals and objectives. In answer to the question of whether online college is a threat to traditional bricks and mortar universities, it depends. The market will answer that question because many students do not attend college to receive a liberal arts education, but to increase employment opportunities. If the market accepts badges and certificates, then colleges may be forced to look at the costs associated with a traditional college degree.

Related:

Verifying identity for online courses https://drwilda.com/2012/04/15/verifying-identity-for-online-courses/
Will ‘massive open online courses’ (MOOCS) begin to offer credit? https://drwilda.com/2012/11/14/will-massive-open-online-courses-moocs-begin-to-offer-credit/
Is online higher ed a threat to bricks and mortar colleges? https://drwilda.com/2012/09/17/is-online-higher-ed-a-threat-to-bricks-and-mortar-colleges/

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3 Responses to “MOOCs are trying to discover a business model which works”

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  1. Georgia Tech offers a cost-saving ‘MOOC’ computer science degree option | drwilda - August 19, 2013

    […] MOOCs are trying to discover a business model which works https://drwilda.com/2013/07/21/moocs-are-trying-to-discover-a-business-model-which-works/ […]

  2. University of Pennsylvania study: MOOCs are not bringing the level playing field to education that many thought | drwilda - November 24, 2013

    […] https://drwilda.com/2013/07/21/moocs-are-trying-to-discover-a-business-model-which-works/ […]

  3. Harvard and MIT study: So far, MOOC courses are not growing as fast as expected | drwilda - April 15, 2015

    […] Moi wrote in MOOCs are trying to discover a business model which works: Jon Marcus reported in the Washington Post article, Online course start-ups offer virtually free college. http://www.washingtonpost.com/local/education/online-course-startups-offer-virtually-free-college/2012/01/09/gIQAEJ6VGQ_story.html?wpisrc=emailtoafriend The New York Times reported about the online education trend in the article, Online Enterprises Gain Foothold as Path to a College Degree http://www.nytimes.com/2011/08/25/education/25future.html?_r=1&emc=eta1 Whether MOOCS can develop a business model is discussed in the Economist article, The attack of the MOOCs: An army of new online courses is scaring the wits out of traditional universities. But can they find a viable business model? http://www.economist.com/news/business/21582001-army-new-online-courses-scaring-wits-out-traditional-universities-can-they https://drwilda.com/2013/07/21/moocs-are-trying-to-discover-a-business-model-which-works/ […]

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