A Philosopher's Blog

Monetizing MOOCs

Posted in Technology, Universities & Colleges by Michael LaBossiere on December 30, 2013
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Having been a professor for a while, I have learned the obvious: fads come and go in higher education. In some cases, a fad turns out to not be a fad—that is, it lodges in the system and becomes part of it. At this point, MOOCs (Massive Open Online Courses) seem to be a fad. Within the academy, administrators and some faculty sing the praises of the MOOCs…at least until one starts asking for specific details. Then the song turns to whistling and a bit of hand waving, followed by a quick departure from the stage. Outside of the academy, MOOCs have also become a subject of buzz—there are those eager to use MOOCs as money siphons and others who delight in throwing around the term at every opportunity—ranging from motivational speeches to training sessions.

While there is a multiplicity of issues relating to MOOCs, one obvious point of concern is how the MOOCs are going to be monetized. That is, how will the MOOC companies make money in order to sustain the MOOCs and, perhaps, make a profit.

One of the biggest and best known MOOCers is EDX. This nonprofit is funded by MIT and Harvard, which puts it in a fairly good position in terms of money. Since EDX is a non-profit, it does not face the burden of generating a profit. Since it is backed by two academic powerhouses with considerable funding, it can rely on them for the cash needed to keep their MOOCs MOOCing. That said, EDX might not be able to rely on the funding indefinitely and even a non-profit needs cash flow to keep it in operation.

Other big MOOCers include the for-profit Coursera and Udacity. Unlike the non-profits MOOCers, they face a dual challenge: 1) having enough cash to stay in operation and 2) making a profit. For profit MOOCers are typically funded by venture capitalists who are gambling that the MOOCs will be MOMMs (Massive Online Money Makers).

One rather obvious challenge of monetizing the MOOCs is the “Open” in “Massive Open Online Courses.” For the most part, “Open” is taken to mean “free.” One obvious problem with a business model based on giving away the sole product for free is that free product does not, in general, result in much income. The obvious solution to the lack of income from being free is to make the product non-free. However, this would require changing how people see the “Open” in “Massive Open Online Courses” or changing “MOOC” to “MOC” (For “Massive Online Courses”).

If MOOCs become online paid classes, then they would need to offer services that people would be willing to pay for and they would need to compete with established alternatives (such as universities). This could be done by providing a better or cheaper product—or, as some for-profit colleges do, massive advertising and perhaps a bit of deceit.

Not surprisingly, the for-profit colleges do provide an excellent look into how to monetize a MOOC. The for-profit colleges have managed to tap into federal money quite effectively: in 2011 25% of all Department of Education financial aid money went to the for-profits. They have also tapped into Pell Grants and veteran’s educational benefits. No doubt the for-profit MOOCers will endeavor to follow the same tactics, only with the MOOC spin on the selling. MOOCers are already hard at work lobbying and have enjoyed considerable success, especially with certain governors. As such, student financial aid seems to be a likely source of money for well-connected MOOCers. Of course, this would just be the same as the for-profit colleges, only with massive classes. This might result in change in education from a small scale operation (in terms of class sizes) to what could be regarded as industrialized education: massive production via automation. Naturally, there are concerns about the quality and value of such massive courses—at least to those who are concerned about education.

MOOCers can also make money by selling their services to existing universities. Based on my own experience and a bit of research, many administrators and politicians are excited about using MOOCs to reduce the cost and increase the availability of public education (and funnel money to the right people). A university might fund MOOCs and allow students to take them for free (which would be the traditional MOOC) or they might offer MOOCs as they would offer an online course of their own—by charging students a fee. This might seem to be an odd approach for a university—like a sign shop hiring someone else to make their signs or McDonalds hiring a catering service to make the food they will sell. After all, universities already have people who create and teach classes, namely professors. Why not have university faculty create and run the MOOCs? The obvious answer is that faculty are often not “the right people” when it comes to who should be receiving the money.

Another approach, borrowed from the freemium games, is to provide the basic product for free and then make money charging people for extras. For example, a student might be able to take a class for free, but have to pay a fee to get a certificate proving that she passed the course. This would require offering courses where the certificate would mean something (or hoping that people will buy them to print to hang on their walls). As another example, the basic course could be free, but students would have to pay for extra tutoring or access to premium course material. Given the success of freemium games, this could be a viable option for the MOOCers—provided they can offer premium options that people will buy in quantities enough to sustain the MOOCer. One point of concern is, of course, that the freemium approach could run counter to one of the “selling” points of MOOCs, namely that they are supposed to open education up to the masses. If people have to shell out for premiums and these premiums are actually important or essential to the course, then the divide between those who can afford to pay and those who cannot will exist in the land of MOOCs—just as it does in traditional higher education. But, perhaps the premium content would still be far less than the cost of traditional education.

Whatever the approach, the MOOCers are going to need to monetize the MOOCs. This might result in the MOOCs ceasing to be MOOCs—that is, becoming just more online for-profit colleges (only with really big courses). Then again, maybe MOOCs will go the way of Friendster rather than becoming the Facebook of education.

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MOOCing Education

Posted in Ethics, Universities & Colleges by Michael LaBossiere on November 27, 2013
Salford Business School launches unique open a...

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On the face of it, a MOOC looks rather good to administrators worried about budgets and for-profit education industry companies. After all, the MOOC promises to do for education what automation and outsourcing did for manufacturing. In the case of the purely online college level MOOC, a pre-packaged class is delivered to students via the web and grading is either automated or outsourced. From a financial standpoint, the main virtues of this sort of college level MOOC is that it eliminates the expense of the full time professor and allows for mass education.

While the main concern of the for-profit and the financially focused administrator is money, actual educators tend to be concerned with education. As such, there is the question of whether or not the fully online MOOCs can deliver adequate education. While some faculty have been accused of opposing MOOCs simply out of fear of losing their jobs or because they fear or do not understand the technology, my main concern is the issue of whether or not MOOCs can deliver. If they can, in fact, deliver quality education to more people and at a far lower cost than traditional education, then I would supports MOOCs—even at the cost of my own job. This is not to say that I want to lose my job, just that I am willing to make personal sacrifices for the greater good. That is, in part, why I passed on vastly more lucrative careers in order to be an educator.

Last year San Jose State University (SJSU) conducted what amounted to a controlled experiment comparing MOOCs to hybrid and traditional classes. SJSU partnered with the non-profit edX to offer hybrid classes combining MIT lectures in engineering with SJSU faculty providing direct educational support for the students. These hybrid classes proved to be winners: the students performed better than in the traditional classes.

The results of these hybrid classes matches my own experiences. I taught a successful hybrid class on Ethics last spring and have incorporated hybrid elements into all my classes to good effect. One reason that the hybrid classes seem to be effective is that it allows students to watch the educational videos and consume other material at their own pace (and repeatedly) while also being able to be directly guided and supported by an actual professional. Another reason is that providing the students with the ability to do or submit work online frees them from the need to be on campus at a specific time.

Unfortunately for the students at SJSU, the school also partnered with the for-profit Udacity. This company got a no bid contract to offer online-only classes in developmental math, algebra and statistics. While the price was only $150, most of the students did not pass the classes. In the case of developmental math, the pass rate was 25% compared to the pass rate of 65% for the traditional versions of the class. None of the classes had a higher than 50% pass rate, which is clearly rather bad. Not surprisingly, 80% of the students indicated that they needed more help with the class content than was offered online.

Udacity did have some apparent success: one summer algebra course had a 72% pass rate. However, this class was mostly people who had already graduated and the online exams now came with hints to help the students. As such, this mainly showed that college graduates who are given hints on exams will be able to pass such a course. This hardly serves as support for MOOCs in general.

It is worth considering that this is but one “experiment” and there very well might be factors specific to Udacity or SJSU that caused the poor results. As such, it could be possible for fully online MOOC to be a success and MOOCs should not simply be dismissed based on Udacity and SJSU and more data is needed. That said, there is a clear moral concern in regards to additional “experiments” involving MOOCs.

One aspect of this moral concern is that charging students to serve as experimental MOOC subjects seems to be unethical. A student who is paying has a reasonable expectation that the course will be up to the proper standards of a college course.

Another moral concern is that students who take a MOOC class as part of their required curriculum are at risk of losing time due to the failures of the class (and not their own failures). As such, testing MOOCs on students when they are paying for the classes and taking them for real seems to be unethical. However, there is the legitimate concern that students who are taking a free class that does not count will be far more likely to drop out or not put in much effort—thus making it challenging to judge the efficacy of a MOOC. A partial solution might be to offer such classes at a significantly lower cost (or free) and allow students to retake the class as a traditional or hybrid class if they fail (with the new grade erasing and replacing the MOOC grade).

As a closing point, I am also concerned about the partnering of for-profit MOOC companies with colleges and universities. The rather obvious concern is that universities and colleges already have full time education experts that are creating and running classes, namely the professors. As such, there would seem to be little need to contract with a for-profit company to do what can already be done in house.  To us an analogy, it would be like a hospital deciding that it will contract out its health care to a company that provides automated medical care and bypass its own doctors and nurses.

Providing such classes is also the core mission of an institute of higher learning. To contract out education is to bypass the professors and to hand over the core mission of the institution to an outside company. While this is clearly a good deal for the for-profit company that gets the contract, it seems to take a significant step towards turning the institution into a shell. This, of course, could be the dream of some: a school that has no faculty, but only well-paid administrators and well-paid education contractors.

Naturally, it might be contended that I am merely expressing fear about losing my job. However, as noted above, my concern is with the quality of the education that such MOOCs provide. The existing data indicates that they are lacking in quality. As such, handing over education to the MOOCs would seem to be a bad idea. Except, of course, for those who see education as merely another area of profit.

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MOOCs

Posted in Business, Philosophy, Universities & Colleges by Michael LaBossiere on January 9, 2013
MOOC Crib

MOOC Crib (Photo credit: snowpup5)

Thanks to games like World of Warcraft, many people are familiar with MMOs (Massively Multiplayer Online games). However, people are probably somewhat less familiar with MOOCs (Massive Open Online Courses).

While MOOCs vary considerably, the name provides their basic features. First, they are massive (or potentially so). This means that such a course can support an indefinite number of students. This is in obvious contrast to the traditional classroom which is limited by the size of the room and even with the now traditional online classes which are typically limited in size because they are taught by one (or a few) teachers.

Second, they are open. This is in contrast with the traditional closed course which is available only to students registered at a specific school. Currently, the MOOCs are operating on a free model as well—that is, students do not pay to take such classes. However, the monetization of MOOCs is certainly inevitable.

Third, they are online. This also typically involves a high degree of automation for the course. In most cases, a MOOC is pre-packaged course without interaction with an actual teacher.

Finally, they are courses—that is, they are aimed at teaching people something. The best known MOOCs, those offered by Coursera, are college classes. However, they could be classes at any level. Currently MOOCs do not provide college credit, but there are plans to change this—most likely as part of the monetization process.

Obviously, MOOCs do have some clear positive features. Since they are massive, they can support a large number of students, thus making the courses more widely available. Since they are open, the classes are available to anyone who can access a computer, thus making them available to people who might not otherwise be able to afford college classes.

As might be imagined, I find these aspects of MOOCs very appealing and consistent with my own view of broad education. After all, I have made my work on fallacies freely available for almost two decades and I have various (admittedly lame) educational videos on YouTube. However, as a professor I have some concerns about the future of MOOCs.

As noted above, it is a matter of time before MOOCs are monetized. In general, I have no problem with this—after all, I work for money and sell books via Amazon. Heck, I’d probably get involved with a reputable MOOC service. My main concern, then, is not that MOOCs will go from open to being monetized. Rather, my concern is what impact they could have on the quality of education.

Having been in education for a while, I am well aware of the business-model push to minimize costs in education. Before the web, there was (and still is) a push to have classes as large as possible—in my case, I am paid the same whether my class is a mere 35 students or a ridiculous 75 students. The web merely allows this to be taken to an even greater extreme, since it is not limited by the size of a physical classroom. With truly massive online courses, a single professor could supply an education product to thousands of students. There are, of course, some obvious concerns here. One is the workload of a professor responsible for a massive class. Another is the quality of education in such a diluted learning environment, even if the main professor is supported by graduate students or staff.

Of course, greater savings can be had by eliminating the professor entirely. That is, the class can (as MOOCs typically are now) be a pre-packaged learning product that the students click through, without any actual teacher. While a professor or other professional would be needed to design and create the course content and assessment material, this could be done once (like a book) and updated from time to time. Thus, rather than paying a professor for each semester, a professor could be paid to put himself (and others) out of a teaching job.  No doubt, some star professors (like star authors) would make good money off the courses they created. However, it would probably not be very good for most faculty.

Naturally, if the MOOC is for credit, there would be a need to grade the work of the students. Much of this can be done, obviously enough, by the use of software. True/false tests and their ilk can easily be graded automatically. Papers, lab reports and so on would still require a human grader. However, just as graduate students are currently used as grading machines, they could be employed (at vastly lower pay than professors) to grade such work. Others could also be hired solely as graders, perhaps paid like migrant farmers in terms of the volume of their work—so much per page graded, perhaps. Outsourcing would also be an obvious approach here—just as students talk to a person in India for support for their software, their papers would be graded there as well, perhaps by the same person.

This would be a dream come true for some: the arrival of the industrial revolution in education in which the labor of a person (the professor) is replaced by a vastly more efficient mechanized (or rather computerized) education machine. Students simply pay their money, log in and click their way to a degree at minimal cost to the university or college. At long last the knowledge factory would be a true factory.

For those who would profit from such a system, it obviously has incredible appeal. A college could now operate like a true business, largely unburdened by costly and often troublesome professors. It could also be advantageous for students: they might pay significantly less for their education and be able to complete it faster than they could via the traditional means of education (or even via normal online classes).

There is, however, a point of great concern: would a MOOC be an adequate substitute for the traditional class or even the traditional online class? That is, would students have the same quality of education?

Honesty compels me to admit that when it comes to classes that are traditionally taught as massive lectures there would probably be little difference. In fact, a well done MOOC might actually be superior to the education acquired by sitting in a lecture hall with 800 other students, watching a professor up on stage. As such, such massive service classes could be reasonably replaced by MOOCs.

Obviously, some classes would not work as pure MOOCs, such as classes that require actual lab work, dissections or other such things that require a physical presence. Of course, a college could simply have labs run by low paid staff members with everything else being done via the MOOC.

However, there seem to be many classes that would lose a great deal of educational quality without the sort of interaction that having an actual teacher would provide. To use an obvious analogy, while clicking about on a web site to diagnose an illness can be a good start, at some point a person should probably see an actual doctor.  Likewise, clicking through an automated class can be a good start, but at some point one should probably interact with an actual educator.

Of course, there is still the question of whether or not having the real thing (a doctor or professor) is worth the price. This is a matter that should be seriously considered. Of course, if we take the approach of replacing people whenever they can be replaced by automation, at some point we would replace everyone—even the administrators, shareholders and students.  But perhaps the ultimate dream is to have a completely automated system: machines teaching machines and money automatically multiplied in automated banks with no humans left in the process at all. More seriously, the challenge, then, is deciding when the automation is not worth the price.

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