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How are universities evolving and earning revenue from MOOCs?

Opinions are still split on whether Massive Open Online Courses (MOOCs) are a revolution in higher education learning, but universities are confident that the open online learning modules can now provide them with much needed revenue streams.

Universities can leverage MOOC platforms to build a fan base and earn revenue via associated products, for example. Illustration: Slavena Kluzakova

"There are 1.4 billion people between the ages of 15 and 54 with internet access that might not be in a position to financially come to university"

Bunking early scepticism that the model would ever be profitable, universities worldwide have bold plans to increase the number of courses supported on these platforms and are coming up with creative methods to see a return on their investment.

Offering certifications of completion, including MOOC material in blended learning for on-campus students and even selling subject-relevant swag were tactics universities at the Coursera Partners conference in London this week reported as channels employed to monetise MOOCs.

Increasing reputation, reach and brand awareness were also among the benefits mentioned as well as driving innovative ways to bring technology into the classroom.

“MOOCs are no longer an experiment, we’re starting to see real learning”

“MOOCs are an evolution of higher education and we don’t know where it’s going to go but we’re not going to not watch, not follow, we’re going to lead,” said W. Michael McCracken, Director of Online Course Development and Innovation at Georgia Institute of Technology. Georgia Tech is the first university to offer a full credit MOOC Masters degree on the platform Udacity.

“Our Master of Computer Science shows MOOCs aren’t an experiment anymore,” McCracken enthused, a sentiment that was echoed by Daphne Koller, co-founder of Coursera, the world’s largest MOOC platform.

Since launching in 2012, Coursera has grown to beyond the size of competing platforms Udacity and EdX combined. It supports 630 courses from 108 partner universities in 21 countries. “MOOCs are no longer an experiment, we’re starting to see real learning,” said Koller.

“We’re similar to Amazon in that we connect providers of educational content with consumers, the learners,” added co-founder Andrew Ng.

In an effort to generate income, last year Coursera launched Signature Track – allowing students to pay between $30 and $100 to obtain a certification of completion of the course. Last month they launched Specializations, a sequence of courses leading to a certificate and a capstone project at the end, that has increased the flow of students toward Signature Track.

A year in, and Signature Track has generated US$4 million in revenue and the company believes that the certifications will answer the growing demand for education from the global community.

“It gives us confidence that there are 1.4 billion people between the ages of 15 and 54 with internet access that might not be in a position to financially come to university but want an education and will pay $50 for a certificate,” said Tom Willerer, head of Project Management at Coursera.

“When we look back in five years, MOOCs will have been a useful tool for integrating technology into teaching”

“This could be over the long-term a nice sustainable market for us.”

However, at this point, not all institutions have seen much return from the service. “Signature Track isn’t going to be the silver bullet to monetise MOOCs,” argued Nadav Stak, Director of Online Learning at Tel Aviv University. “We need to come up with many models.”

The average initial investment for Coursera partners to set up and run a MOOC is $50,000, but the open nature of the platform has never lended itself to clear business models.

Those browsing MOOC options can see a preview of the Dino 101 course

Those browsing MOOC options can see a preview of the Dino 101 course

The University of Alberta is one institution making waves across the sector thanks to its inventive ways to make money from its Dino 101 MOOC, a paleobiology course led by dinosaur expert Dr Phil Currie.

Eight revenue channels were established for the course: offering it in a blended format to full tuition students on campus, offering it as an online class for half the price of tuition to on-campus students, a US$69 certificate via Signature Track, a credit-bearing certificate of accomplishment for students who took the mid-term and final exam of the on-campus course, on-demand printed t-shirts and coffee mugs, fine art prints of dinosaurs, online donations from students to the paleoanthology programme, and administering tests for third party institutions using the MOOC in their curriculum.

Jennifer Chesney, Associate Vice Chancellor of Digital Strategy at the university, also said it is looking into a a way to sell cheaply priced additional course material to learners. “The fan bases around your courses will want that,” she said.

Once thought to be the end of traditional brick and mortar education, MOOCs are now motivating educators to create digital material that they can use on and offline.

“When we look back in five years, MOOCs will have been a useful tool for integrating technology into teaching,” said Edward Rock, Director of Open Course Initiatives at the University of Pennsylvania, one of the investors in Coursera and the single partner institution with the largest number of completed MOOCs to date, 27.

The increasing use of MOOC material in on-campus classes suggests that early concerns of the online teaching quality are being addressed.

Coursera has recently partnered with the Carlos Slim foundation to begin translating all videos into Spanish

However critics still say many courses are poor calibre, especially for non-native English speaking students. “We need to take the translation of our courses seriously and control it,” argued Ebrahim Afsah, Associate Professor of International Law at the University of Copenhagen. “Treat the translation just as you would publishing an article.”

Institutions outside of non-Anglophone countries prefer to use English in their MOOCs to reach a wider audience, however most usually provide subtitles or translations to course material in the local language.

Nevertheless, user demographics haven’t changed much since the company’s launch. Almost half of the seven million students come from the US.

In a bid to increase activity from non-English speaking markets, Coursera has recently partnered with the Carlos Slim foundation to begin translating all videos into Spanish and has local partners in other countries to translate content into other languages. It also recently launched localised home pages in seven languages including Mandarin.

While the future of MOOCs remains unknown, for universities the sky is no longer falling. Peking University in China is currently training 500 professors to launch and run the 100 MOOCs they want to have in the next five years – institutions such as this are embracing the model as a tool to increase their international scope, support open access to materials and bring innovative technology into the classroom.

“The future world of higher education won’t be MOOCs versus HE but a continuum,” said Ben Benderson, Professor of Computer Science at the University of Maryland. “If we don’t accept these alternative structures, another institution will.”

As for Coursera, the company received $43 million in a second tranche of venture capital investment last year, it now has over 100 members of staff and just recently named former Yale University President Rick Levin as its CEO. Julia Stiglitz, Head of Business Development said: “We’re optimistic about our models. The focus of the company as a whole is growth.”

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