As the potential impact of MOOCs looms on the higher education horizon, many of those unanswered questions surround the financial aspects of MOOCs. First off, how can MOOCs continue operating as a free model? MOOCs are costly to maintain, and major players in the MOOC arena such as Udacity and Coursera have $22 million and $16 million in funding from venture capital respectively (Holmes, 2013). Venture capitalists aren’t involved with MOOCs as an altruistic venture. They expect a return on their money. Dellarocas and Van Alstyne (2013) present a number of possibilities for the profitability of MOOCs, including state subsidies, moving to a tuition model, paying for certifications from courses, selling data generated in courses, charging potential employers for recruiting services, and selling student referral data to higher education institutions. I believe that a combination of these business models must emerge if the for profit companies driving many MOOCs are to stay afloat. Personally, I wonder if these avenues will be enough to maintain MOOCs as a profitable enterprise, but that remains to be seen. I am also generally concerned with the issue the transparency. The public image of MOOCs as benevolent, knowledge dispursing entities greatly contrasts with the true nature of for profit enterprises in general. Are learners aware that many MOOCs are in existence to make money? In addition, have/will MOOCs be completely transparent about the possibility of using learners data for profit in a plethora of ways?
Another financial element surrounding the impact of MOOCs stems from the other end of the spectrum. Will MOOCs influence the financial model of traditional higher education institutions? Clay Shirky (2013) details a higher education system which is already struggling with economic issues of keeping expenses below revenues, and students facing difficult decisions of sacrificing ever increasing expenses, in return for a bachelor’s degree with less net benefit than in the past. In this environment, the advent of MOOCs is likely to affect small, less prestigious colleges already having difficulty keeping revenues and expenses in check. Glassman (2013) citing a Moody’s Investor Service report, agrees. Moody’s predicts that MOOCs will be a net positive for large schools with brand recognition, but will hurt smaller colleges who cannot compete against those course and faculty offerings. While I am not sure that MOOCs will have a large effect on the overall higher education landscape, I do agree that online learning and nontraditional course offerings will. Not staying abreast of these changes and opportunities will be extremely detrimental in today’s already shaky funding environment.
Dellarocas, C., & Van Alstyne, M. (2013). Money models for MOOCs. Communications of the ACM, 56(8), 25-28.
Grossman, S. (2013). Moody’s Says MOOCs Could Raise a University’s Credit Rating [Blog Post] The Chronicle of Higher Education College, Wired Campus. Retrieved from http://chronicle.com/blogs/wiredcampus/moodys-says-moocs-could-boost-a-universitys-credit-rating/44519
Holmes, D. (2013) How Will the MOOCs Make Money? Retrieved from http://pandodaily.com/2013/08/22/infographic-how-will-the-moocs-make-money/
Shirky, C. (2013). MOOCs and Economic Reality [Blog Post] The Chronicle of Higher Education College, The Conversation. Retrieved from http://chronicle.com/blogs/conversation/2013/07/08/moocs-and-economic-reality/
Do you think that MOOCs will end up being "just another" form of non-traditional courses? More and more, that is the way I am leaning. Not quite revolutionary, but certainly a significant change in higher ed.
ReplyDeleteWell, if I were the manager of Harvard, I think I had already been sent to insane asylum. How could he or she keep calm when so much money had been wasted.
ReplyDeleteIf MOOCs indeed will change higher education, I believe that only certain universities will benefit. Small universities and some HBCU will more than likely struggle to keep up with this new form of learning.
ReplyDeleteHi Jen,
ReplyDeleteThanks for a thoughtful and thought-provoking post! I think you've made some great points and have hit on the key question: what's up with these for-profits offering free courses. Again reminds me of the adage that if you aren't paying, you aren't the customer.
I read an article recently..think I tweeted it too...by a dean of a small college who argued that his job is actually easier. Basically he now has something that's different and worthwhile. Small classes, personal attention, and so forth. I thought it was an interesting perspective!
Keith - If MOOCs as an educational delivery system are going to survive (and I believe they will in some form), I am thinking at this point that my answer to your question is "yes". Higher ed will have to turn MOOCs into another revenue stream such that they are able to afford to create and maintain them.
ReplyDeleteHi Jen,
ReplyDeleteAs I read these postings I began to think more on the costs and if MOOCs do not begin to make money, perhaps they will not influence higher ed. Bottom line is if one is not in the black from an accounting perspective, regardless of funding sources, the doors will not stay open for long. Economic impact on higher ed, now I am not so sure.