Can MOOCs be made to add up?

Get the complete book Thinking Strategically about MOOCs: The Role of Massive Open Online Courses in the College and University at Amazon in print or kindle version.

While strong majorities of presidents agree that going online should be good for both enrollments and revenue, there is less evidence about just how much new net revenue online education actually produces—if any.[1]

~ Kenneth C. Green

            A Moody’s report released on January 16, 2013, gave the entire higher education sector a negative outlook. The report identified a downward shift even for elite institutions with existing demand and significant brand recognition. “The U.S. higher education sector had hit a critical juncture in the evolution of its business model,” wrote Eva Bogarty, the report’s author. “Most universities will have to lower their cost structures to achieve long-term financial sustainability and to fund future initiatives.”[2] The report suggests several strategies for institutions to use MOOCs to advantage, including granting credit for a fee, licensing courses, and increasing efficiency by expanding the number of students an individual faculty member can serve.

The report further ratcheted up enthusiasm for the implementation of MOOCs. As a result corporate and institutional investments and expectations for MOOCs are higher than ever.  It is anticipated that enrollments, revenue, and profitability will increase with the development and deployment of MOOCs. But will the numbers add up? Are the proposed business models and monetization schemes sustainable?

Setting the Stage: massive investment and hedged bets

Think of higher education as a boomtown along the lines of Seattle during the boom of the 1990s. Venture capitalists, state universities, private colleges, and for-profit schools are all looking for investment opportunities and calculating how much money to gamble.  Higher-education investment in this space can take many forms: capital, infrastructure, faculty, and staff are areas ripe for responsible investment linked to mission and strategy (rather, it is to be hoped, than investment driven by insecurity and apprehension). Venture capital has been investing in corporate startups and technology platforms; academic institutions will invest in partnerships, faculty, staff, and programs.

Determined to benefit from a market they see as ripe for Clayton Christensen-style “disruption,” venture capitalists have been pouring millions into education technology start-ups. Investments in such companies tripled in the last decade, rising from $146 million in 2002 to $429 million in 2011, according to the National Venture Capital Association.[3]

This isn’t the first time colleges and universities have grown panicky over technological disruption. A similar wave hit higher education in the 1990s. As Kenneth C. (Casey) Green reflects, during the frenzy, the expectation on campus held that being “online” offered great potential with minimal investment.  Posting syllabi and web pages for students accustomed to sitting in front of screens would give educational institutions unprecedented reach through “eyeballs and click-through,” in the terminology of those hype-heavy days.  College administrators and trustees grew fearful that by failing to go online, they would cede the advantage to early-adopting institutions.[4]

As Green points out, neither the market potential nor the disruptions materialized. The threatened disruptions and the predicted disadvantages tended to fade away, balance and harmony was restored, and everyone landed pretty much where they started, persistently reviewing and implementing academic technologies at a comfortable pace and making slow, steady progress.

The era also taught some enduring lessons to higher-education administrators. New positions in instructional technology were created; “blended librarians,” with a mix of traditional librarianship and newfound facility with digital technologies, emerged.  Academic Technology groups formed under IT or the Library or in the Learning Center.  Campuses investigated and implemented such pragmatic technologies as learning management systems and digital asset management services.  Institutions modified or developed policies to deal with copyright, intellectual property, and privacy in an online world.  Many institutions began to share lectures, courses, and even sporting events via the web.  Faculty, staff, and students explored and adopted blogs and social media. Academic institutions and supporting organizations now routinely broadcast online seminars via high-definition videoconferencing.

The academy, in other words, took on the surge of web-based technology and learned some hard-won lessons, the knowledge from which now resides in your faculty and staff. That knowledge is capital you can reinvest in a strategy for managing the current wave of enthusiasm for MOOCs. As for-profit firms increase their investment in online learning technologies, you must take a similar accounting of the resources available to you, and plan how to re-deploy them in the exploration and implementation of MOOCs.

When the wave crested at the turn of the millennium, money and corporate enthusiasm for the higher education sector disappeared. But today’s investors are convinced that conditions are different this time around.  Ad­vances in technology on campus, a (misguided) belief in near-universal wireless access and high-speed internet connections, and an increasing confidence in cloud-based systems are providing entrepreneurs access to money and resources previously reserved for other markets. These resources are coming from venture capitalists and foundations alike.

The Bill & Melinda Gates Foundation, for example, has long been active in funding education, and its investments are growing: In 2012, the Foundation invested $2 million in the social network/student engagement startup Inigral. In November 2012, Gates contributed $895,453 to help the American Council on Education (ACE) establish a Presidential Innovation Lab, where college leaders can discuss MOOCs and other new business models for higher education. The Gates Foundation contribution is part of larger $3 million package of MOOC-related grants.

In the keynote address at the 2013 South by Southwest Edu conference, Bill Gates argued that more venture capitalists and corporations must invest in developing education technology and services to “kick-start new ways of teaching with technology.” He shared a chart showing that education accounts for only one percent of all venture-capital investment. Acknowledging that education has never been an active R&D sector, he noted that “we’re going to have to grow this” by  “developing a gold standard of proving that something works,” and identifying and improving how schools and colleges can share learning analytics data.[5]

Online learning is well established by now, and will continue to grow. How will you prepare and invest responsibly at your institution?  What metrics must you identify and what dashboards must you develop to ensure that your institution will provide high-quality, reliable, credentialed online coursework for the next generation of learners?

These questions are worth posing and answering as aggressive investors of millions in technology products and services close in on your campus with intentions to sell you their solutions. How will you organize to invest in and implement effective, contemporary, on-line learning strategies?

            Partner with Providers or Go It Alone? As you consider and investigate your online learning options, it will become clear that you may not be allowed to partner with the current major MOOC providers, who traffic on their exclusivity.  If you decide to provide MOOCs, you will develop and deliver them on your own or in collaboration with other campuses also excluded from such partnerships.  This will affect the nature and breadth of your investment strategy.

At the time of this writing, a tiny fraction of the four thousand-plus colleges and universities in the United States are included in such MOOC delivery services as Coursera and edX.  Currently, Coursera is contractually required to limit campus partnerships to the sixty-two elite institutions that are members of the Association of American Universities. Coursera’s contract with the University of California, Santa Cruz, spells it out: “It is Company’s intent to offer on its Platform only Content provided by top-quality educational institutions. Within North America, Company will host and provide only Content provided by universities that are a member of the Association of American Universities.”  This is consistent with the Coursera vision and mission statement: “We are a social entrepreneurship company that partners with the top universities in the world to offer courses online for anyone to take, for free. We envision a future where the top universities are educating not only thousands of students, but millions. Our technology enables the best professors to teach tens or hundreds of thousands of students.”[6]  EdX, openly exclusive from the beginning, includes even fewer partnering institutions.  If your institution is not on these elite lists and you are determined to develop and deliver MOOCs, you need to develop an investment plan of your own.

            Invest in Faculty and Staff. Elite institutions and corporations flush with cash are investing huge sums in software, platforms, systems, and services to further online learning, which is unquestionably here to stay. Is your institution adequately prepared to develop and deliver online courses in this environment?  Adjust your investment strategy with this in mind, and synch it with your institutional mission.

            From Project to Program. Diana Oblinger and Brian Hawkins of Educause drafted an exemplary review of the fundamentals of successful online learning programming in 2006. Entitled “The Myth about Online Course Development,” it is worthy of review and should be shared with all campus stakeholders involved in development of your overall strategic planning process.  They identify four fundamental questions you should ask:

  • What is the best use of your faculty?
  • Do you have a process for strategically investing in online course development?
  • Do you confuse providing content with creating and delivering learning environments?
  • What is the desired return on investment in online course development and delivery?

The “traditional” method of investing in the development of online learning has relied heavily on providing release time and stipends to individual faculty with a modicum of technical expertise. These courses generally re-created the classroom lecture on the web. Oblinger and Hawkins argue that this model must be jettisoned in favor of a team approach to the development of online learning resources:

Developing and delivering effective online courses requires pedagogy and technology expertise possessed by few faculty. Good pedagogy implies that the instructor can develop targeted learning objectives. Online instruction is more than a series of readings posted to a Web site; it requires deliberate instructional design that hinges on linking learning objectives to specific learning activities and measurable outcomes. Few faculty have had formal education or training in instructional design or learning theory. To expect them to master the instructional design needed to put a well-designed course online is unrealistic. A more effective model is to pair a faculty member with an instructional designer so that each brings unique skills to the course-creation process.

This call to invest in faculty and staff development is echoed by Dr. Charlie McCormick, Provost at Schreiner University, who has been responsible for developing that institution’s successful online learning program.  When asked what he would do differently were he to embark on this effort now, he advised moving from the individual faculty approach to an institutional program model: “Provide more faculty development earlier in the process.  Shift from the familiar individual faculty development (based on release time and stipend for individual course development) to institution-wide programmatic development.  Develop a deliberate, well-articulated program with enough partnership and inclusion to enable faculty to see where their work fits into the larger institutional structure.”

This model represents a significant shift in funding, planning, and organizational development for most campuses and will require close partnership and consultation with faculty, staff, and students. In the frenzy to offer MOOCs, faculty and other stakeholders are not always involved in the decision-making process or the negotiations. This is an opportunity to engage in an inclusive planning process to ensure institution-wide engagement.

Kenneth E. Hartman, a senior fellow at Edventures and the former president of Drexel eLearning at Drexel University, has specific recommendations for institutions in the process of developing their online learning programs.  Hartman says that once you have taken account of your resources and articulated your strategy, you must “communicate the ‘why’ to key stakeholders from the top to the bottom of the organization, including board members, faculty, deans, students and alumni.” You should incentivize faculty and staff and integrate them, at the institutional level described by McCormick, into your program. Develop the means to compensate these colleagues by distributing revenue from online courses to such support-related scholarly work as professional conferences, new equipment and resources, and internships.[7]

In order to make the investment, enrollment, revenue, and overhead numbers add up, you will need to develop an inclusive, engaging, and deliberate program that is not about MOOCs alone but about the mission of the campus, the nature of learning with twenty-first century tools, and your strategy to succeed. The flurry of investments elsewhere has given rise to increased expectations everywhere. We need to identify the return on those investments, the viability of revenue projections, and sustainable business models in support of both.

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Add it up: revenue dreams and abstract business models

MOOCs might be described as rough-hewn revenue sources in search of a business model. Globalization; democratization; and revenue generation through increased enrollments, certification and matchmaking between employers and MOOC participants are all posited as reasons to climb aboard the MOOC bandwagon.

Much is made of the potential locked inside the scope and scale of MOOCs, and expectations ride high on the notion that advertised enrollment numbers will translate into increased revenue. References to Google and other titans of the Internet eyeballs-on-the-page metrics are common, noting that Google’s business model of ad-supported search was developed and implemented long after launch and site traffic increased. The projected revenue streams for MOOCS is similarly tied to “traffic volume” and is only vaguely articulated in the contracts between for-profit MOOC providers and their client colleges and universities.

But MOOCs are neither free nor easy. They take time and resources to develop and deploy. The overhead notwithstanding, for-profit firms and colleges and universities are plunging ahead, confident that the investment will be worth the ambiguous returns.  But do the numbers add up?

Despite vague gestures towards potential revenue, usually cautious higher ed institutions have leapt into deals with vendors like Coursera. The contract between Coursera and the University of Michigan, obtained and published under a Freedom of Information Act request, reveals that no one, not even Coursera, knows exactly how MOOCs will generate revenue. A brief section of the agreement, entitled “Possible Company Monetization Strategies,” lists eight potential revenue streams that are short on detail.  Briefly:

  1. Certification. Coursera provides non-credit-bearing, university-branded certificates available for purchase by participants.
  2. Secure assessments.  Coursera may provide identity verification to students (end-users) for a fee.
  3. Employee recruiting. With student consent, Coursera provides access to student data to prospective employers.  Student contact information remains confidential.
  4. Employee or University screening.  Coursera will provide prospective employers and/or universities access to prospective employees or students to assess level of expertise.
  5. Human-provided tutoring or manual grading. Coursera will provide access to paid tutors and graders.
  6. Corporate/University enterprise model. Coursera will provide access to an “enterprise” version of the course for employee training.
  7. Sponsorships. With the approval of the university and the instructor, Coursera will permit third-party sponsorship of MOOC courses by foundations and/or corporations.
  8. Tuition fees. Following mutual agreement by the university and Coursera, a tuition fee may be charged for access to “certain courses.”

Per the contract, the universities will get six to fifteen percent of revenue, depending on the duration of the course. Institutions will also get twenty percent of profits after costs and previous revenue are paid.

Any significant revenue derived from these models is necessarily structured around the massive enrollment data discussed earlier.  As Jeffrey Young of the Chronicle of Higher Education reports, Daphne Koller, co-founder of Coursera, describes the rationale very clearly:  “What we’re doing is one instructor, 50,000 students. This is the way to bend the cost curves.” Koller goes on to say, “Our VC’s keep telling us that if you build a Web site that is changing the lives of millions of people, then the money will follow.”[8]

Coursera is following a typical Silicon Valley start-up model: Build fast and demonstrate a user install base and hope the money will follow.  Appreciation for that model is echoed by some in higher education: “Part of what Coursera’s gotten right is that it makes more sense to build your user base first and then figure out later how to monetize it, than to worry too much at the beginning about how to monetize it,” said Edward Rock, University of Pennsylvania Provost and director of their open course initiatives. (The University of Pennsylvania has developed sixteen Coursera courses, each costing approximately $50,000 to create.  Videography and course support staff represent the most significant expenses.)[9]

Venture capitalists do not invest out of charity. Their objective is profit.  But even edX, a not-for-profit MOOC collaboration between Harvard and MIT, needs to generate revenue, if not profit. In that context, edX has two models for university partnerships: the university self-service model and the edX-supported model.

The university self-service model allows a participating university to freely use edX’s platform as a learning-management system for courses as long as edX receives part of any revenue generated by the course. EdX does not contribute to the development of the course. EdX collects the first $50,000 generated by the course, or $10,000 from each recurring course. The organization and the university partner each receive fifty percent of all revenue beyond that threshold.

In the edX-supported model, edX provides production assistance to universities for their MOOCs. EdX will charge $250,000 for each new course, plus $50,000 for each time a course is offered for an additional term. Although this model requires payment up front, potential returns to the university are high if a course ends up making money. Just as in the self-service model, edX will receive the first $50,000 for a new course, $10,000 for a recurring one.  Beyond that, the university receives seventy percent of any additional revenue. Although the edX models provide more generous revenue sharing to universities than Coursera does, the income realized by the university comes only after edX has collected its cut.

The challenge is making money in the first place.  EdX is as fuzzy as Coursera on how revenue will be generated.

            Potential Monetization Models. Most MOOC vendors have responded to questions about their financial model by identifying various revenue streams. As you work to connect your institutional strategy and mission to the potential of MOOCs, you need to be aware of the monetization models that commercial vendors are developing.  Understanding the nature and scope of their potential will help you make decisions about where your institution fits in the MOOC community. 

            Proctored exams and certification. The American Council on Education (ACE) is participating with Coursera and Udacity, using subject experts to assess five Coursera courses and four Udacity courses to determine if they merit transfer credits. Once the courses are deemed worthy, students who complete them can take identity-verified proctored exams for a fee and get an ACE Credit transcript (a certification that two thousand universities already accept for credit).

Coursera is developing partnerships with online proctoring companies to use Webcams and “keystroke biometrics” software to analyze patterns and rhythms of typing as a sort of keyboarding fingerprint. Coursera’s remote-proctoring strategy has encouraged other MOOC providers, including edX and Udacity, to adopt competing strategies. Unlike Coursera’s online proctoring, these organizations will use the four hundred fifty testing centers run by Pearson to allow students to take final exams in person and receive a certificate of completion. Udacity will charge $89.00, and edX anticipates fees for their exams will be under $100.00.

In this model, if fifty thousand people start a course, five thousand finish, and five hundred to one thousand are motivated to pay an assumed fee of $90.00 for a certificate of completion, the MOOC vendor would realize gross revenues of between $45,000 and $90,000. The university’s share of that will be significantly smaller, of course, depending upon its contract with the vendor.

To help with students’ “motivation” to complete the course and pay for the certificate, Coursera has developed a service called “Signature Track.”   This consists of designating specific courses as Signature Track courses and charging for the certificate up front: “If you’re excited to participate or want to learn more, simply enroll in one of the above courses and you will be notified when you can join. The price for joining a course’s Signature Track will be between $30-$100 per course.” Signature Track could front-load revenue streams and facilitate more “skin in the game” for students, which could in turn increase course retention.

As you calculate the revenue from MOOC monetization models under vendor contracts, recall that your take is going to be considerably smaller.

            Matchmaking. Bypassing exams, credits, and credentialing altogether, MOOC vendors may serve as “headhunters” for companies interested in their/your students.

Udacity has launched a job portal with plans to match students with companies that have signed with Udacity for this service. Some three hundred fifty companies have signed up, and Udacity has placed about twenty students. Coursera also notified students that they could participate in job-placement services in which Coursera uses analytics to scan student data, identifies matches between students and employers, and—with student permission—introduces the two to one another.

Assuming MOOC enrollments of fifty thousand, the general thinking is that even a relatively small proportion of successful matchmaking efforts will generate significant revenue to both the vendor and its partner institution. Working from the model in which typical headhunters receive fees equivalent to twenty percent of a candidate’s starting salary, the vendors are betting on income of around $10,000 – $15,000 per match.

Putting Potential into Practice: small sample of programs


            Antioch University and Coursera. In fall 2012, Coursera entered into a contract with Antioch University, allowing Antioch to license MOOCs developed by Coursera’s university partners. Antioch will offer these MOOCs for credit as part of a bachelor’s degree program.

The deal will help Coursera and its partner institutions develop a revenue stream from licensing MOOCs. This could potentially develop into a product that Coursera could sell to colleges: a packaged platform with instructors, course content, tools for student engagement, and assessment. The model may be a natural extension of the familiar learning management system (LMS).  Coursera and its university partners will receive an undisclosed amount from Antioch for permission to use these courses, which include courses from Duke University and the University of Pennsylvania. Coursera’s university partners retain intellectual property rights to their courses.

The potential for revenue sharing suggests the following scenario, with its interesting opportunities for faculty as well as institutions:

  • Universities work with Coursera to develop MOOCs to be offered through Coursera;
  • Schools decide to license some courses for a fee;
  • Coursera shares the gross revenue and net profit with the universities;
  • Faculty who developed the course also receive revenue.

Although there is potential revenue sharing here, it is limited to campuses contractually able to partner with Coursera.  Until other vendors create similar models and until Coursera’s contract removes the restriction to work only with members of the American Association of Universities (AAU), most institutions will not be able to take advantage of this revenue stream.

            San Jose State University and Udacity. State universities and community colleges in California are under the gun.  Overcrowding, access to classes, and crushing student debt are forcing state and higher education leaders to find innovative solutions. Some of the more controversial proposals include MOOCs. As mentioned earlier, San Jose State University and Udacity announced a project to jointly create and deliver three introductory mathematics classes. The courses will be available to San Jose State students for credit at a cost of $150.00—again, not free, but less than the $450.00-$750.00 students would usually pay.

In addition to the potential of developing solid metrics to measure and improve retention in online courses, the project may be a model of revenue sharing. If it continues past its pilot phase, the SJSU retains fifty-one percent of any revenue after costs are recovered, and Udacity gets forty-nine percent. The project also may provide a model for faculty receipt of compensation for contributing to the development of MOOCs. Faculty at San Jose State will be paid $15,000 to develop the pilot courses and will retain the intellectual-property rights to their materials.

            Semester Online and 2U. Semester Online is a consortium of elite colleges and universities that includes Duke University, Emory University, Northwestern University and Washington University in St. Louis. According to the website, it is the first program to provide “the opportunity to take rigorous, online courses for credit from . . . leading universities” to undergraduates not actually enrolled at the institutions offering them. Semester Online is working with 2U (formerly known as 2tor) to provide a platform bringing elite schools online to “deliver rigorous, selective graduate degree and for-credit programs online.” Semester Online will began accepting applications in early 2013, with classes beginning that fall.

Other participating institutions include Brandeis University, Northwestern University, the Universities of North Carolina at Chapel Hill, Notre Dame, and Rochester, Vanderbilt University, and Wake Forest University.

Semester Online represents an iterative trend away from the “traditional” MOOC.  The courses offered by the consortium will not be massive, free or open. Class sizes will be only fifteen to twenty students, who will earn college credit. Students will go through a selective admissions process established by the school offering the course, and they will have to pay. The originating institution will set course prices, which may equate to market rate. Duke University, for example, estimates that the cost will probably be about the same as an on-campus course—about $5,500, although details are still forthcoming.

Semester Online courses, by design, will not achieve the scale of MOOCs. And while the courses have the potential for the originating institutions to expand enrollments without buying property for new buildings, campus leaders are not hopeful that the program will significantly increase revenue or reduce tuition costs.  As Steve Kolowich reported in the Chronicle of Higher Education, “campus leaders at Duke acknowledge that the program may help slow the increase, but don’t think it’s going to lead to a reduction.”

Cautionary Tales of Hidden Costs and Lost Revenue

            Hidden costs. Charlie Moran, the CEO of Moran Technology Consulting, shared a potentially jarring scenario with colleagues on the Educause CIO listserv.  The scenario described significant cost increases in licensing for college data systems as a result of successful MOOC enrollments. Here is the potential problem:

Any school that is teaching a MOOC will potentially add a large subset of the participants to their SIS database for certificate or course credit and future enrollment marketing. If you teach a MOOC but wait until the enrolled students apply for admission to your campus before entering them into your SIS system then this might not be a problem. If you enter students into your SIS because they have a grade or certificate from you and you need to maintain it, then you may have a problem:

  • Most ERP/SIS contracts are based on student headcount or FTE.
  • Assume your institution has 10,000-student FTE.
  • Assume your software contracts are based on student FTE.
  • Assume you paid $1M in license fees for your ERP and you paid $1M in license fees for your database and data warehouse and reporting tools.
  • Assume that you pay 20% for annual software maintenance for all of this software.

Then your institution launches a MOOC.

  • For simplicity, assume that you run your MOOC on edX/Udacity/Coursera/etc. at no cost to you.
  • Again, in round numbers, assume that 100,000 students enroll in the class, 20,000 complete the course, and 5,000 want a certificate or college credit from your school.

The software audit staff at your ERP/DB/Tools vendors contact you about the increase in your FTE, which increased 50% from 10,000 to 15,000. Now, you have to:

  • Pay $500,000 one-time for additional ERP/SIS Licensing
  • Pay $100,000 more / year FOREVER in an ERP annual maintenance increase
  • Pay $500,000 one-time for additional Database and other tools Licensing
  • Pay $100,000 more / year FOREVER in a database and tool annual maintenance increase

So, for 5,000 additional students, you will pay an additional one-time license cost of $1M and an additional $200,000 / year forever in software maintenance. In general ERP and enterprise-wide DB contract requirements increase with rises in enrollment, but never go down if enrollment falls. A mitigating factor could be that you may charge something for giving a MOOC student a certificate and even more for a grade. Is it enough to pay the one-time fees? Enough to pay the annual maintenance increases?

Moran’s numbers are large and clearly dramatic. The financial impact outlined here will depend on your local variables, the numbers of students you add into your SIS, student headcount vs. FTE, and so on. Regardless, it behooves you to review your current contracts to understand the impact that significant, MOOC-generated changes in FTE will have on your budget.

            Displaced Income.  Large lecture halls filled with hundreds of students and taught by a single faculty member and a few TAs are common. We teach this way not because the model is representative of our best thinking on learning theory and pedagogy but because it makes economic sense, being an efficient way to manage the costs of delivering lower-level survey courses. The profit from these courses subsidizes the smaller, more intimate (and more marketable) upper-division courses.

When proposing the use of MOOCs to lower costs and increase access, it is critical to contextualize that proposition with this model in mind.  You need to assess precisely how your campus pays for your more valued curriculum. Even if you are at a small liberal arts college and you don’t offer large lecture hall courses, you must identify how you have structured your business plan to benefit from the current curriculum and how changes to that structure will impact your bottom line.

Agencies across higher education are working to ensure that transferable credits are available to students who participate in MOOCs.  As that effort increases, take the opportunity to assess the extent to which that potential financial benefit to students may translate into a loss at your institution. MOOCs, whether provided by you or other institutions, could displace some of your income.

            Increased costs.  Many hope that MOOCs will reduce the cost of education and increase revenue. Others argue that MOOCs will actually increase costs, at least in the short term. Depending on how they are implemented, MOOCs are likely to be layered onto existing institutional commitments as an additional cost rather than replace existing programs. They will require support.  By design, they will emphasize active learning, formative assessment, and dynamic content that is easily modified with the appropriate staff support. Enabling data collection to measure learning outcomes in new ways, they will require new systems and staffing models that few campuses are currently prepared to offer.  It is possible, even likely, that this could become an outsourced service to which campuses subscribe for a fee.

*          *          *

            The private sector is investing heavily in the profitable future they see for education. That investment has altered expectations and encouraged vaguely articulated revenue models. Online learning in various iterations will become more pervasive and viable regardless of whether your campus offers these resources.  Take the time to document and identify the trends external to your institution as you assess your internal programs and structures.

Planning Questions:

  • What distinguishes your campus, faculty, and staff? Identify (and celebrate and market) and invest in these identified strengths. E.g., invest in professional development for faculty, technologists, librarians, and media specialists.
  • How would MOOCs and online learning offer an opportunity to effect maximum competitive advantage?
  • What gaps in academic support for online learning can you identify?
  • What strategies can you identify to address these gaps and how will you develop and plan for appropriate staffing?
  • What potential partnerships with other institutions, non-profits, and for-profits can you identify?
  • How will you plan to include stakeholders frequently left out of the strategic planning process, e.g., faculty, staff, and students?
  • How would investments in online learning make sense for your institution at this time?
  • How, would MOOCs in all their emerging iterations support the mission of the campus?
  • How will you manage revenue sharing with MOOC providers?
  • What impact will participation in MOOCs either as provider or consumer have on your financial plan?
  • To what extent do you leverage income from lower-level courses to subsidize your curriculum?

Recommended Readings

Azevedo, Alisha. “In Colleges’ Rush to Try MOOC’s, Faculty Are Not Always in the Conversation.” The Chronicle of Higher Education, September 26, 2012, sec. Technology.

Booker, Ellis. “Can Big Data Analytics Boost Graduation Rates?” Information Week, February 5, 2013.

Byerly, Alison. “Before You Jump on the Bandwagon …” The Chronicle of Higher Education, September 3, 2012, sec. Commentary.

Catropa, Dayna, and Margaret Andrews. “Did MOOCs Just Make Landfall? 10 Questions to Consider.” Inside Higher Ed, November 5, 2012.

———. “MOOCs to MOCCs.” StratEDgy, December 16, 2012.

Christensen, Clayton, and Henry J. Eyring. Can Higher Education Be Fixed? The Innovative University, September 23, 2011.

Davidson, Cathy. “If We Profs Don’t Reform Higher Ed, We’ll Be Re-Formed (and We Won’t Like It).” HASTAC, January 13, 2013.

Desantis, Nick. “A Boom Time for Education Start-Ups.” The Chronicle of Higher Education, March 18, 2012, sec. Technology.

“edX Makes Key Code Open Source.” Inside Higher Ed, March 15, 2013.

Empson, Rip. “Coursera Takes A Big Step Toward Monetization, Now Lets Students Earn ‘Verified Certificates’ For A Fee.” TechCrunch, January 8, 2013.

Gardner, Lee, and Jeffrey R. Young. “California’s Move Toward MOOCs Sends Shock Waves, but Key Questions Remain Unanswered.” The Chronicle of Higher Education, March 14, 2013, sec. Government.

Green, Kenneth C. “Mission, MOOCs, & Money.” Association of Governing Boards, February 2013.

Hartman, Kennth E. “Tips for College Leaders to Make Online Programs Work.” Inside Higher Ed, February 11, 2013.

Hill, Phil. “Emerging Student Patterns in MOOCs: A Graphical View.” e-Literate, March 6, 2013.

———. “The Most Thorough Summary (to Date) of MOOC Completion Rates.” e-Literate, February 26, 2013.

Jordan, Katy. “MOOC Completion Rates.” Accessed March 18, 2013.

Kiley, Kevin. “Moody’s Report Calls into Question All Traditional University Revenue Sources.” Inside Higher Ed, January 17, 2013.

Kim, Joshua. “MOOCS, Online Learning, and the Wrong Conversation.” Inside Higher Ed, January 2, 2013.

———. “Why MOOCs May Drive Up Higher Ed Costs.” Inside Higher Ed, March 11, 2013.

Kolowich, Steve. “Coursera Strikes MOOC Licensing Deal with Antioch University.” Inside Higher Ed, October 29, 2012.

———. “Experts Speculate on Possible Business Models for MOOC Providers.” Inside Higher Ed, June 11, 2012.

———. “How EdX Plans to Earn, and Share, Revenue From Its Free Online Courses.” The Chronicle of Higher Education, February 21, 2013, sec. Technology.

———. “SUNY Signals Major Push Toward MOOCs and Other New Educational Models.” The Chronicle of Higher Education. The Wired Campus, March 20, 2013.

———. “The Professors Behind the MOOC Hype.” The Chronicle of Higher Education, March 18, 2013, sec. Technology.

———. “Top-tier Universities Band Together to Offer Credit-bearing, Fully Online Courses.” Inside Higher Ed, November 16, 2012.

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[1] Kenneth C. Green, “Mission, MOOCs, & Money,” Association of Governing Boards, February 2013,

[2] Kevin Kiley, “Moody’s Report Calls into Question All Traditional University Revenue Sources,” Inside Higher Ed, January 17, 2013,

[3] Nick Desantis, “A Boom Time for Education Start-Ups,” The Chronicle of Higher Education, March 18, 2012, sec. Technology,

[4] Green, “Mission, MOOCs, & Money.”

[5] Jeffrey R. Young, “At South by Southwest Education Event, Tensions Divide Entrepreneurs and Educators,” The Chronicle of Higher Education, The Wired Campus, March 7, 2013,

[6] “Coursera Commits to Admitting Only Elite Universities | Inside Higher Ed,” accessed June 18, 2013,

[7] Kennth E. Hartman, “Tips for College Leaders to Make Online Programs Work,” Inside Higher Ed, February 11, 2013,

[8] Jeffrey R. Young, “Inside the Coursera Contract: How an Upstart Company Might Profit From Free Courses,” The Chronicle of Higher Education, July 19, 2012, sec. College 2.0,

[9] Tamar Lewin, “Massive Open Online Courses Prove Popular, If Not Lucrative Yet,” The New York Times, January 6, 2013, sec. Education,

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