Coursera debates future of monetization – The Daily Pennsylvanian
Reports from the actual event indicate the discussion is really not centered on monetization, but the article sure is:
“I think the excitement surrounding this conference, and around Coursera in general, shows that the profits will come, even if they may not have come yet,” said Law School professor Edward Rock, who serves as Penn’s director of open course initiatives. “When you have a product like these courses that represents an increase in quality and a reduction in cost, it’s bound to make money.”
At Penn, Rock said, about 60 percent of revenue earned from individual courses goes directly to faculty members.
“If a course turns out to be a bestseller, there will be significant revenues that flow to faculty members,” he added. “It’s something that professors think about and care about, because they’re putting a huge amount of time into developing these courses.”
“If you look at similar ventures, the same questions came up there. How’s Google going to get money from searches, how’s Facebook going to get money from hitting a like button?” [Penn mathematics and engineering professor Robert Ghrist] said. “Once you have an interested customer base, then you have something to work with.”
From the latest breathless NYTimes article on MOOCs:
Coursera does not pay the universities, and the universities do not pay Coursera, but both incur substantial costs. Contracts provide that if a revenue stream emerges, the company and the universities will share it.
Although MOOCs will have to be self-sustaining some day — whether by charging students for credentials or premium services or by charging corporate recruiters for access to the best students — Ms. Koller and university officials said that was not a pressing concern.
I suppose it’s ironic for me to be saying this–given my line of work–but I have concerns about the business model for MOOCs. Not the “build it and they will come” aspect, because I’ve made a good living off of that proposition, but more the cost of the building. I’m a little afraid that MOOC content is largely going to fall into the sour spot between OpenCourseWare content, which is really cheap to produce, and truly useful adaptive learning content, which is really costly to produce.
OCW content costs in the single to tens of thousands to produce; MIT’s model, which is fairly costly, runs about $10K per course. Most other OCWs out there spend far less, often as little as $3K per course. Of course, for that investment, you largely get static PDFs that were used in classrooms, rather than online courses. To create an OCW course with video is about $5K to $25K depending on the recording setup and production value.
I just completed a review of Taylor Walsh’s Unlocking the Gates, which chronicles–among other projects–Carnegie Mellon’s Open Learning Initiative, one of the few online course efforts with significant science behind it. In that profile, Taylor reports the OLI team doesn’t believe they’ll get their cost per course down to anything less than about $500K.
Now I would guess that the cost per course for some entrants into the MOOC space has been in the $500K range, especially those with more robust automated feedback, but I doubt many of the more recent entrants will spend that much. So let’s say that it’s more in the range of $250K, or an order of magnitude more expensive. Assuming that doesn’t buy you particularly robust automated feedback, is the cost jump worth it? Is it sustainable?
I’ve been taking the Udacity statistics course, and at least through the first unit, the automated feedback consists of a clever integration of boxes to enter answers to question directly into the video screen, but no scaffolding or support to help you if you are stuck on a question or adaptive elements (that I can discern) to route you through topics depending on your skill level. The delta between the little box that says “You got it right!’ or “You got it wrong.” and the answer on a chalkboard or PDF is not that big, but I’m guessing the cost to get there is.
And the cost to get from there to real adaptive learning is likewise a big jump, and not one that I think many schools will be willing to make. So my guess is that many of the universities that are joining Coursera are either investing too much in their course materials or too little. Too little, and it’s not clear the experience will be worth it to students to pay for; too much and the schools may not be able to recover costs.
In a system where nobody–the content provider, the platform provider, or the student–has any obligations to anyone else, the barrier to entry is low–as it is with OCW–and the barrier to exit is also very low. This means they are not likely to convert more than a very small fraction of students to paying customers, and the easiest option for participating schools will be a quick exit.
Will be interesting to watch.
One of the issues I’ve been thinking about as I watch the development of massively scalable courses (I continue to resist calling them MOOCs) is whether or not we are repeating the problems of learning management systems in the new course platforms.
My experience with learning management systems is that because they are tasked with doing so many different things, they don’t do any one thing particularly well. In part this is an issue of development burden–even a big, well-resourced team is hard pressed to keep up on the development of the full suite of tools that educators want to use. The second issue is one of nimbleness. It’s much harder in a big system like an LMS to throw out code and start from scratch on a particular piece of functionality–there’s just too much legacy commitment.
I’m not primarily (or maybe even secondarily) a technical guy, so there may be new approaches to putting platforms together that will mitigate the second issue, but as far as I can see, the first issue only gets worse when it comes to massively scalable courses. Why? The key development that is allowing courses to scale in any meaningful way right now is the new generation of automated assessments such as the circuitry sandbox used for 6.002x.
That tool, as reported in the Globe yesterday, has been under development for many years. The problem is, creating an automated assessment tool of similar complexity in a different field is likely to be a similarly complex undertaking. To create a program that spans a wide range of subjects in a meaningfully scalable way means a similar investment in each field.
In addition to the burden of creating assessments across a range of fields, the massively scalable course platforms are also going to have to create content and learning communities as well, adding to the development burden. An alternative to this that I see is for learners to build experiences by pulling together complementary individual projects. We collaborate, for instance, with OpenStudy to add interactive opportunities to MIT OpenCourseWare content. There’s no reason learners couldn’t choose to use Peer 2 Peer University for the same purpose. And increasingly, there are automated feedback tools such as those at Codecademy emerging that can provide a robust experience.
The most compelling part of the massively scalable course value proposition right now–beyond the learning opportunity itself–is the possibility of credentialling, but it’s not clear right now what the market value of that will be, or how much reputational capital participating universities are willing to burn in these efforts, or how efforts like the Mozilla Open Badges Infrastructure will impact credentialling.
Joins Dow Chemical and Lockheed Martin in OCW Next Decade Alliance to support global educational opportunity
CAMBRIDGE, MA, March 2, 2012 — MathWorks has joined Dow Chemical and Lockheed Martin as founding members of MIT OpenCourseWare’s Next Decade Alliance. Next Decade Alliance sponsors make significant multi-year commitments supporting MIT OpenCourseWare (OCW), MIT’s effort to share the core academic materials—including syllabi, lecture notes, assignments and exams—from all of MIT’s courses. The materials are made freely available on the web under open licenses that permit reuse, modification and redistribution of the content for non-profit purposes.
Since OCW’s launch in 2002, the program has shared materials from more than 2,100 MIT courses, including video recordings of the complete lectures from 50 classes, through the OCW site. OCW has distributed 290 copies of the site on hard drives to universities in bandwidth constrained regions, and translation partners have created more than 1,000 translated version of OCW courses. In the past decade, OCW materials have been accessed by 125 million educators and learners worldwide.
“MathWorks and MIT have a long history together and we are very pleased to enter the latest chapter of this relationship,” says MIT Provost L. Rafeal Reif. “The Next Decade Alliance will provide OCW the resources to build on its past success and innovate in bringing educational opportunities to the world.”
In the next ten years, OCW is poised to explore the rapidly expanding world of open education. Though a series of initiatives supported by the Next Decade Alliance, MIT will push forward in expanding the reach of OCW materials, explore how OCW content can be shaped to meet the needs of specific audiences, experiment with a broader open education ecosystem including online communities, and work with teachers to bring OCW content into more classrooms.
“MathWorks is proud to play a role in broadening access to education, and in exploring the possibilities of the web in improving the lives of millions around the world,” says MathWorks CEO Jack Little, an MIT graduate. “This is an effort we feel is truly worthy of MathWorks’ sustained support.”
MathWorks is the leading developer of mathematical computing software. MATLAB, the language of technical computing, is a programming environment for algorithm development, data analysis, visualization, and numeric computation. Simulink is a graphical environment for simulation and Model-Based Design of multidomain dynamic and embedded systems. Engineers and scientists worldwide rely on these product families to accelerate the pace of discovery, innovation, and development in automotive, aerospace, electronics, financial services, biotech-pharmaceutical, and other industries. MathWorks products are also fundamental teaching and research tools in the world’s universities and learning institutions. Founded in 1984, MathWorks employs more than 2200 people in 15 countries, with headquarters in Natick, Massachusetts, USA. For additional information, visit www.mathworks.com.
MATLAB and Simulink are registered trademarks of The MathWorks, Inc. See http://www.mathworks.com/trademarks for a list of additional trademarks. Other product or brand names may be trademarks or registered trademarks of their respective holders.
About MIT OpenCourseWare
MIT OpenCourseWare makes the materials used in the teaching of substantially all of MIT’s undergraduate and graduate courses—more than 2,000 in all—available on the Web, free of charge, to any user in the world. OCW receives an average of 1.5 million web site visits per month from more than 215 countries and territories worldwide. To date, more than 125 million individuals have accessed OCW materials.
External Relations Director
As we’ve been working through the possible business models to sustain OpenCourseWare, we’ve come across revenue opportunities that can be broadly divided into two categories—opportunities that depend on the site as a whole, and opportunities that meaningfully depend on content from individual course content. There is some blurring between the two, as will be clear below, but it is a useful distinction nonetheless.
At the outset, too, I want to say that I am only discussing opportunities that are consistent with the mission and spirit of OCW, i.e. don’t charge end users for access to content. There are plenty of opportunities that do charge end users for access to content, but those are best left to the faculty to negotiate directly with the other interested party. (An example of this would be a faculty member who negotiated with a helicopter manufacturer to allow use of his course content in training materials the company developed for the military–a clear commercial use outside of the scope an license of OCW.)
For the uses I am discussing here, an example of the type of revenue opportunity that depends on the site as a whole would be corporate sponsorship writ large, where the company provides money to support the overall publication of our content. Our sponsorship from Ab Initio falls into this category. There is no one faculty member who can claim the funding came as a result of his or her contribution. On the other hand, there are are clear scenarios, such as print-on-demand funded by a sponsor, in which faculty members have a strong claim to their content being a clear generator of revenue, since the orders are easily measurable.
We’ve tended to shy away from the second scenario becasue the faculty rightly have a claim to a share of the money coming in, and the complexities of arranging the profit share are daunting, especially given that any one opportunity is likely not going to generate a significant amount of revenue. We’ve had a couple of instances that kind of cross the boundary–our Amazon links for instance, where the faculty might claim some share of the revenue generated by links on the site from books they use, but some of the revenue generated is on unrelated purchases such as computers, movies, etc. In the Amazon case, the dollars are so small ($40K a year with 1,600 faculty contributors), there is no faculty interest in revenue sharing.
Beyond the complexity of it, another reason we’ve shied away from revenue opportunities that depend on specific faculty content is that the likelihood of any one scenario panning out is fairly slim, so we may go through a protracted negotiation with faculty only to have the opportunity fizzle, and going back to the well again and again on these is frustrating both for us and for the faculty.
So I’ve been imagining ways we might usefully address the complexities of this second category of opportunities, so that we might try some of them and generate more revenue without the negotiation and logistical headaches that seem to come with them. The following scenario then, is a thought exercise in that direction that exists only in my head and this blog post, and DOES NOT represent any kind of program under discussion at MIT. I share the idea because others in the OCW community might find it useful at their own institutions.
I’m imagining it might be possible to enlist faculty in an OCW development cooperative that would exist primarily to secure funding to support OCW, and secondarily to generate revenue share for participating faculty. Here’s how it would work: When faculty publish on OCW, they would be given the opportunity to join the cooperative, and if they did, their content would be flagged as available for use in revenue-generating scenarios within a set of defined boundaries (consistent with OCW’s mission and spirit as above). If they chose not to, their materials would not be used. This blanket participation would save us having to negotiate on individual opportunities.
In return for this permission, faculty would be assigned one share per course contributed to the site, as well as additional shares for other qualifying characteristics, such as an additional share per 100,000 visits to a course each year, or five additional shares for a course with a full series of video lectures. This would help to balance the relative pull each course has in generating revenue. At the beginning of the fiscal year, a target amount of revenue derived from cooperative efforts would be negotiated as a part of the overall OCW fundraising effort, say $500K. If at the end of the year the total amount of revenue generated from efforts covered by the cooperative agreement is below $500K, then participating faculty get to feel good about supporting OCW; if the amount exceeds $500k, then the excess is divided among the shareholders according to shares held.
I have no idea about the tax implications of all of this. Most of these efforts would end up being unrelated business income I’m sure, so taxable, and the agreement would have to specify how that would be addressed. But such an arrangement would simplify ongoing negotiations with faculty, provide a potential incentive for participation, and aggregate distribution of shares from across multiple revenue streams.
Just a thought…
Addendum: I failed to include the possibility of departments also holding shares based on the level of departmental participation, which would recognize the value the department as a whole brings and incentivise the departments to encourage participation.
From an e-mail I wrote this morning:
I think right now there is evidence for two divergent theories on the way OER work: the standard view that reuse of OER results in cost savings and iterative quality improvement, and the view that in many cases OER are disposable rather than reusable. And the case may be that both views are correct, depending on circumstance.
I think the first view is pretty clear and so I’ll skip to an explanation of the second. As production and distribution of a wider and wider range of media become cheaper and more widely available on a standard PC, it’s often easier to draw inspiration from the teaching materials of others but create the actual materials you use from scratch. I interviewed a professor here in the States whose work illustrated just this (http://web.mit.edu/newsoffice/2011/ocw-benefits-3.html). Video production, too, illustrates this concept. With a laptop camera, it’s far easier to create a new video from scratch than to edit or even translate and subtitle one that’s been previously produced.
Obviously there are caveats about unequal access to technology and appropriate accessibility provisions, but in general, by privileging adaption over direct creation, we may be encouraging faculty and schools to undertake processes that inadvertently end up costing more and producing lower quality materials. What is clear to me at this point is that by sharing materials openly, we are allowing educators to learn from one another through the transparency OER provide, regardless of whether the OER are actually reused. And many materials are so cheap to produce that it’s fine if they end up as openly shared educational “compost” that is the fertile ground for the growth of new materials rather than the “pulp” that gets recycled directly.
Additional content to be added to MIT OpenCourseWare’s Highlights for High School site
CAMBRIDGE, MA — The Dow Chemical Company announced today the establishment of the MIT-Dow Outreach Fund designed to develop and support the science and engineering careers of underrepresented minorities and women.
The fund, a five-year, $2 million commitment from The Dow Chemical Company, will support the advancement of the shared goals of both Dow and MIT to support science education throughout the entire pipeline, beginning with high school science teachers and their students and following through to undergraduate and graduate education in chemistry, chemical engineering and materials science. The establishment of this Outreach Program comes as Dow celebrates the International Year of Chemistry and the importance of the chemical sciences and as MIT celebrates its 150th anniversary.
“Dow and MIT understand that motivated, passionate students are the key to the future of innovation,” remarked Theresa Kotanchek, herself a PhD chemical engineer and the Vice President of Sustainable Technologies and Innovation Sourcing at Dow. “Dow is fully committed to championing the Chemistry, Chemical Engineering and Materials Science departments at MIT as we work together to provide opportunity for the best and brightest students to excel in the field,” she added.
The first program goal of the Dow-MIT Outreach Program is the development of resources aimed at inspiring interest in the physical sciences, particularly chemistry, among high school students and teachers worldwide. The materials will be made available through MIT OpenCourseWare (OCW) and the MIT Highlights for High School portal.
The second goal expands on a program that has already seen outstanding success: the Dow-MIT ACCESS (A Community in Chemical Engineering Select Symposium). The ACCESS program, initiated in 2009, is a weekend of workshops, talks, tours and interaction created for select underrepresented minority undergraduates in the U.S. The purpose of the program is to introduce these students to the exciting possibilities of graduate-level education in engineering and is based on Dow’s highly successful BEST program, which offers a similar experience for graduate students wishing to explore industrial careers in science and engineering. The new Dow Outreach gift will allow expansion of the program from the original Department of Chemical Engineering, led by Klavs F. Jensen, Warren K. Lewis Professor of Chemical Engineering and department head, to the Department of Materials Science and Engineering, led by Edwin L. Thomas, Morris Cohen Professor of Materials Science and Engineering, and the Department of Chemistry.
Finally, the multiyear gift will establish three Dow Graduate Fellowships to be offered on a competitive basis to outstanding underrepresented minorities and women entering their first year of graduate education in chemistry, chemical engineering or materials science at MIT. Each of the three departments will award one first-year fellowship for each of the five years of the program for a total of 15 fellowship awards.
MIT Department of Chemistry Head and John C. Sheehan Professor of Chemistry, Sylvia Ceyer, noted the enhanced opportunity the program brings, and said, “Dow and MIT are united in their recognition of the fundamental need to fully engage underrepresented minorities in the fields of science and technology. This program will identify the most promising students at a variety of stages along the educational pipeline and will help them to achieve their full potential as scientists and engineers. We are so pleased to have the opportunity to positively impact the future of American science and technology in this way.”
Dow (NYSE: Dow) combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses deliver a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company’s more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at http://www.dow.com.
About Highlights for High School
Launched in 2007, Highlights for High School iorganizes more than 70 introductory level courses from the OCW site, and indexes over 2,600 individual resources to the AP curricula for calculus, physics and biology, helping United States AP students and educators to find resources quickly. Highlights also includes dozens of demonstrations, competitions and other activities from MIT classes that show how fun and challenging science and technology subjects can be, inspiring the next generation of US engineers and scientists.
About MIT OpenCourseWare
MIT OpenCourseWare makes the materials used in the teaching of substantially all of MIT’s undergraduate and graduate courses—more than 2,000 in all—available on the Web, free of charge, to any user in the world. OCW receives an average of 1.5 million web site visits per month from more than 215 countries and territories worldwide. To date, more than 100 million individuals have accessed OCW materials.
The Massachusetts Institute of Technology, a co-educational, privately endowed research university, is dedicated to advancing knowledge and educating students in science, technology, and other areas of scholarship that will best serve the nation and the world in the 21st century. The Institute has more than 1,000 faculty members and 10,000 undergraduate and graduate students.
MIT’s commitment to innovation has led to a host of scientific breakthroughs and technological advances, in fields ranging from aeronautics to computing to cancer research. 76 alumni, faculty, researchers and staff have won Nobel Prizes.
As MIT celebrates its 150th anniversary (the Institute was founded in 1861), it remains committed to generating, disseminating, and preserving knowledge, and to working with others to help solve some of the world’s most pressing challenges.
The Chronicle is carrying an article on the open text effort in the state of Washington. It highlights some of the difficulties in adoption and adaptation of open resources, but I think the end note is more or less right: they are going to get there.
Many course designers thought they would find everything they needed in the open content offered by universities like Carnegie Mellon. Those treasure-troves, developed with grants from several foundations, offer free courses in addition to lecture notes, virtual laboratories, and online “cognitive tutors” that guide students through complex problem-solving exercises. One company, Flat World Knowledge, offers free online textbooks that professors can customize for their own classes. (Flat World makes its money by selling ancillary study guides.)
But instructors in this group were annoyed with the assumption that it’s just a matter of plucking ripe fruit off the Internet tree. They said they had been surprised to discover how few open-source sites cater to students who struggle with basic math, which describes many at the community-college level.
One of the reasons so few resource are available for remedial math is that the schools teaching remedial math have so few resources and thus can’t launch OER efforts, so they are stuck using overpriced textbooks. It’s a bit of a vicious circle, but it will be broken at some point, especially with help from groups like the Gates Foundation.
In my undergraduate days, I used to go to the West Virginia University Library and (quite illegally) copy large sections of books in the collection, feeding dime after dime into the photocopier to pay the 10 cents a page. And that’s back when a dime was a dime.
I realized today in looking at some of the OCW statistics that our project has become more cost effective than that older method of redistributing educational materials. We’ve topped 540 million page views since launch on a total investment of 40 million dollars (both round numbers).
That comes out to under 8 cents a page (and that’s just our HTML content—even more cost effective if we counted the PDFs that hold most of the content).
and David hears another….
I do hope that OER will be able to generate some cost savings, and I see the best opportunities for this in open access journals and open text books. These would seem to offer savings opportunities, though, not because of their relationship to formal education, but because of their relationship to a media industry that is struggling to make its peace with the digital environment, and not doing a good job. OpenCourseWare is different (at least in the higher ed realm) in that there is no significant media industry out there making money on the sales of course content alone.
Steve wrote persuasively that MIT OCW does not translate into cost savings, and that we probably shouldn’t look for cost savings in the OER context generally.
In addition to the direct benefits of open licenses, they set (or continue) a community ethos that education is about sharing, and most of the universities that have come into the OCW movement have come in out of a commitment to the mission of disseminating knowledge. On a tactical level, the licenses are an important part of the “sell” to faculty considering participation. It’s an expression of the gift economy that educators have long participated in.
So, open licenses help to grease the wheels and do add some benefits (in some cases quite significant ones), and I don’t see huge cost savings in eliminating them. David is covering territory I’ve written about for a while (reference vs. remix uses of OCW). Finger in the wind, I’d say open licenses contribute to about a quarter to a third of end user benefit (if you include translations and aggregations such as Videolectures.net in addition to individual uses of the licenses).
I can kind of cope with it mentally when people not really involved in the space fail to differentiate between the benefits of (1) materials published on the public web and (2) open educational resources. But this conversation with Steve is a repeat of several conversations I’ve had lately. In many cases, people in-field can’t articulate a difference at all, which is disappointing but not depressing. In other cases, more articulate people clearly know the difference and seem to have rejected the necessity of open licenses.
I don’t know how much more clearly I can state:
- I believe open texts and open journals have the potential to save money because they supplant an entrenched and failing industry; I don’t see the cost savings in OCW, and it does a disservice to both adopters of the practice and the movement as a whole to sell OCW on those merits.
- I believe open licenses are an important part of OER both because they set a community standard of openness and because they allow for the materials to be modified and redistributed in ways that magnify the benefits of sharing the materials (in the case of MIT OCW, I’d say 1/3 to 1/4 of all benefits).
- Based on the data I’ve seen, I believe that the bulk of the benefits of open licenses come from macro-level activities such as translation and redistribution that permit reference-based non-remix micro uses rather than the micro level rip-mix-burn by individual educators, although we do see some of this occurring.
I really feel like we are swinging from hyperbolic statement (If open education practitioners cannot move from large-scale sharing to large-scale adopting, the field is dead) to hyperbolic statement (if linking is adopting, every penny spent openly licensing has been wasted) with little connection to data.
It’s quite possible that open licenses are very valuable even if only a small minority of users take advantage of them. These may either be users that can have widespread impact, such as translators and redistributors, or they may be young innovators who will change future practice down the road. But let’s move from what we observe to an understanding of how the field is generating such remarkable impact, rather than starting from a conceptual notion (individual faculty saving money through rip-mix-burn) and when it doesn’t appear in practice claiming the sky is falling.
By the way, all the benefits listed in Table 4B of my previous post are benefits of open licenses, as they relate to faculty incorporating materials into their own courses.
Happy Thanksgiving everyone!