BySanjay Fuloria and Nupur Pavan Bang
Are Massive Open Online Courses (MOOCs) here to stay? Well, no one really knows. They are the new buzz on the education circuit and top universities are rallying to get a share of the pie. Though there is definite merit in learning from a professor and fellow students in a physical classroom, the business of education would flourish by roping in more and more students, and in this respect the traditional channel has certain limitations which the online channel does not. But with starkly different learning impacts and revenue models, this alternative method cannot be considered a replacement for the traditional method. At best, it can play a complementary role. However, factors that impact its sustainability and longevity are yet to be understood or managed.
Started by reputed institutions with the aim to democratize education, Coursera, edX and Udacity are the pioneers in the area of online education. While MOOCs have come into existence only since 2011, each of these three institutions offers a staggering 500 courses on an average. The courses are 3 to 17 weeks in duration and have 30,000 to 40,000 students each, on average. The highest number of registrations for a popular course has been as high as 2,40,000. However, average completion rate for the courses remains low, at 10%.
Most of these are run by the star, mostly tenured, professors of elite institutions. Currently these courses are mostly free as they are subsidized by universities and venture capitalists (VCs). For example, edX and Coursera received $60 million and $16 million respectively from the VCs in the last two years. Eventually, when a successful revenue model is developed, these professors would be well positioned to mint money.
A fact that cannot be refuted is that the learning that happens in a classroom environment within an institution cannot be equaled in an online scenario. Peer group interactions and time spent with professors outside the classroom contribute towards a well-rounded personality. Campus life also promises a great opportunity to start business ventures in collaboration with peers. This kind of collaboration and networking is almost impossible to develop while being co-participants or co-learners in an online course. Whatever be the number of chat rooms created during an online course, who does business with a social network friend, especially if they have never met? Moreover, university is the platform where students assimilate different cultures, languages and cuisines, all of which make them truly global citizens. Globally, between 2010 and 2012, 6.7 million online course enrollments concluded in a mere 670,000 completions.
Though we do not know the usefulness of the courses for those who completed them, we do know that experiments have found that only 50 percent of credit-seeking students passed an online course as compared to 75 percent of students who undertook the regular course in a classroom.
So why waste VC money on comparatively ineffectual online courses? This money could well be used in creating new institutes of higher learning or in creating branches of existing reputed institutes. That would ensure accessibility to good education. Turning to greener pastures, MOOCs plan to tap into the lucrative executive education market. Though online courses reduce cost to company, employees scorn on them as these reduce their time off from the job, travel and networking opportunities- aspects on which the physical classroom scores. Even short training programs arranged by the employers are attractive as they provide an opportunity for face to face interaction.
One of the biggest pluses of MOOCs, however, is their reach and in that they can complement regular brick and mortar courses. A university can expand the reach of its unique classroom courses, taught by a handful of experts worldwide, by opting for the online channel. In the field of executive education, especially for new hires, MOOCs can act as a post training module. Thus, if used innovatively, MOOCs can co-exist with the regular classroom training, especially because they are more cost-effective than their traditional counterparts.
If learning impact is one concern with regard to MOOCs then untenable revenue models is another. There is an eerie resemblance between MOOCs and the dotcom companies of the 1990s. The dotcom companies based their valuations on the number of eyeballs and clicks, which fetched them huge investments from venture capitalists. Similarly, MOOCs seem to be after number of enrollments. Dotcoms did not have a solid revenue model in place, which is the case with the MOOCs of today. They are toying with a multitude of options for getting their revenue much earlier in their lifecycle than dotcoms, however they need to get their revenue model right. Several profitability ideas are being brainstormed in the online education circles. These range from charging a nominal fee for giving a course completion certificate to charging users for complements offered by the online education providers to charging recruiters who hire students of an online course. However, all these ideas need to be tested and until there are signs of profitability, the fate of MOOCs remains uncertain.
Updated Date: Dec 21, 2014 01:20 AM