MOOCSs: 20 ways to monetise
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.
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.
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.
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.
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.
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.
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.
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.
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).
ConclusionI’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..