Making MOOCs Profitable

dollar-bills

The MOOC trend seems all well and good, but one has to wonder: at what point will these programs look to turn a profit?  As with any business (both for profit and non-profit), the name of the game is making money – so one cannot expect that MOOCs continue to deliver their value without realizing a return on their investment.

Let’s take a look at some of the precursors.  The closes thing that comes close to a MOOC from a social standpoint are the social platforms today. Have a look at Facebook and YouTube.  Both platforms started as free-to-use programs.  However, as they evolved, they began to implement profit generating strategies -some of which negatively impacting the user experience (*cough* YouTube commercials…).  Naturally, this was bound to happen, and I believe we should expect the same out of the popular MOOCs today.

The name of the game at present is to be the best MOOC out there, so many of these companies are willing to take a loss in the effort to obtain massive profits. First, they must gain market share, then (and only then) will these companies look to make a profit. It’s straight out of “startup 101”: gain majority market share and a following, then cash-in on your audience base (only after they see you as the “go-to” resources).  Honestly, it makes sense, but it still is funny how many people don’t see this coming.

Today, the most popular MOOC services are provided by edX, Courseara, and Udacity. Edx differentiates by relying on schools like MIT, Harvard, and UC Berkeley in the effort to create top-notch classes. Coursera takes a different approach, offering over a hundred courses on a large variety of subjects. Udacity takes the exclusivity approach, rejecting 98% of professors who apply to teach courses.  Time will tell which one of these strategies is the winning one (maybe multiple).  Oh, and at present, all services are free (for now).

EdX is sitting on $60 million from Harvard and MIT, udacity on $22 million from VC funding, and Coursera has $16 million in VC funding.  Now, do you think these institutions are investing their money for “education sake”?  I don’t think so.  Every smart investor expects a return.

So how will these programs start generating income?  I think that it might make sense for these programs to take a lesson out of Google’s book, but let’s look at other ways.  First, they could allow schools to pay to sponsor a class. In this model, universities pay to have MOOC courses taught on their campuses.  Who knows how much could be charged, but it’s one avenue.  Perhaps another way is to offer students additional paid resources.  For example, students could pay for library resources, tutoring and other formalities of the collegiate life.  I suspect another viable avenue would be product sponsors or ads.  Perhaps students are required to watch a video ad before viewing the material or video lecture.

While the way forward for monetizing MOOCs is unclear – one thing is for certain: they won’t be free forever.

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About the Author:

Justin Ferriman is the co-founder and CEO of LearnDash, the WordPress LMS trusted by the world's leading organizations, such as the University of Michigan, Digital Marketer, WPEngine, and Infusionsoft. Justin has made a career as an elearning consultant where he has implemented large-scale training programs for Fortune 500 companies. Twitter | LinkedIn

3 Comments
  1. Deb Chittur

    Justin-

    I don’t see most MOOCS making any money, but I do think they will change the way higher education is delivered. We will all prosper from that reform!

  2. Dustin

    Another viable option for monetizing is to sell leads to employers; the top 1% of those completing certain classes, especially in something like software development, could be provided to companies where that skill set is in demand.

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