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REVENUE VS. COSTS OF MOOC PLATFORMS
REVENUE VS. COSTS OF MOOC PLATFORMS.
Discussion of business models for xMOOC providers, based on empirical findings and experiences during implementing the
project iMooX.
REVENUE VS. COSTS OF MOOC PLATFORMS
Who is presenting? (authors in alphabetical order)
Stefan Dreisiebner, University of Graz (Austria)Assoc. Prof. PhD Martin Ebner, Graz University of Technology (Austria)Helge Fischer PhD, Dresden University of Technology (Germany)Oliver Franken, Dresden University of Technology (Germany)Prof. PhD Thomas Köhler, Dresden University of Technology (Germany)Michael Kopp PhD, University of Graz (Austria)
REVENUE VS. COSTS OF MOOC PLATFORMS
Content
1. MOOCs in Higher Education
2. Business Activities of MOOC Providers
3. Costs of MOOCs – Practical Experiences from iMooX
4. Discussion – MOOCs in Practice
REVENUE VS. COSTS OF MOOC PLATFORMS
Exkurs: Begriffsklärung & Berührungspunkte
Revenue vs. Costs of MOOC platforms
Unterscheidung von cMOOCs und xMOOCs
Massive …Keine Beschränkung der Teilnehmeranzahl
Open 1 …Keine Vorgabe von Zugangsvoraussetzungen
2 …Keine Erhebung von Teilnahmegebühren Online …Keine „präsenzbasierten“ Lernphasen
Course …Curriculum, Videosequenzen, Literatur, Tests, Foren
Konzept im Wandel (z. B. blended/kostenpflichtige MOOCs, SPOCs)
(Quelle: Schulmeister 2013)
(Quelle: http://www.openeducationeuropa.eu/de/european_scoreboard_moocs)
REVENUE VS. COSTS OF MOOC PLATFORMS
Why MOOCs in Higher Education?
• Attraction of high potential students • Promotion of professors • Free access to education• Advertising of educational programs• Image effects for academic institutions• Transperancy in Higher Education• Increasing quality of teaching• Etc.
Many hopes, wishes and expectations!
But,
What about the costs of xMOOCs?
How can xMOOC-platforms operate sustainably?
1. MOOCs in Higher Education
REVENUE VS. COSTS OF MOOC PLATFORMS
Research Strategy
1. Identification and characterization of business activities of established xMOOC providers
2. Identification of cost factors based on practical experiences during implementation of the xMOOC platform iMooX
3. Derivation of recommendations for the operation of xMOOCs in Higher Education
1. MOOCs in Higher Education
REVENUE VS. COSTS OF MOOC PLATFORMS
Content
1. MOOCs in Higher Education
2. Business Activities of MOOC Providers
3. Costs of MOOCs – Practical Experiences from iMooX
4. Discussion – MOOCs in Practice
REVENUE VS. COSTS OF MOOC PLATFORMS
Business activities of xMOOC providers
• Sample: • Coursera, (http://coursera.org), USA• edX, (https://www.edx.org), USA• Udacity,(https://www.udacity.com), USA• Iversity, (https://iversity.org), Germany
• Study:• How? – content analysis (Mayring, 2002)• What? – editorial documents (e.g. from online portals),
scientific papers, and reports by the selected MOOC providers• When? – February to April 2014
2. Business Activities of MOOC Providers
REVENUE VS. COSTS OF MOOC PLATFORMS
Product combinations
What products are offered for which customer group?
Findings:• quantity of MOOCs
• Coursera: 744• edX: 294• Udacity and iversity: >50
• MOOCs vs. study programs• MOOCs are sold individually and lead to certificates,• connection of individual MOOCs to complex certificate
programs, e.g. Coursera, Udacity and edX • provision of MOOC-based master programs, e.g. Udacity
2. Business Activities of MOOC Providers
REVENUE VS. COSTS OF MOOC PLATFORMS
Financing
How are MOOCs on Coursera, edX, Udacity and iversity refinanced?
Findings:• establishing of the business with equity and/or venture capital• revenue sources:
• chargeable MOOCs (e.g. on the Platform Udacity the participation in selected MOOCs costs between $150 and $200 USD per month)
• free MOOCs with chargeable additional services, e.g. iversity offers certificates with grades (€49 - €99) and/or with ECTS (€129 - €149)
• contributions from sponsors or advertising revenue• fees for the creation and deployment of MOOCs
2. Business Activities of MOOC Providers
REVENUE VS. COSTS OF MOOC PLATFORMS
Value added processes
Which institutions are involved in the planning, production, implementation and certification of MOOCs?
Findings:• for the MOOC production the platform providers cooperate
with universities as well as with companies• cooperation partners deliver content and get additional
support in the manufacturing process• certification is done by the providers themselves (e.g.
Coursera) and/or by cooperation partners such as universities and companies (e.g. iversity).
2. Business Activities of MOOC Providers
REVENUE VS. COSTS OF MOOC PLATFORMS
Market positioning
Which strategy leads to a good market position?
Findings:• establishing as a mass provider (e.g. Coursera)• niche strategies:
• Udacity focuses on the IT market • regional extension to other market segments (e.g. edX
focusses on Arabic market via www.edraak.org)• provision of tailored business trainings by Udacity• establishing of MOOCs in regular academic teaching (e.g.
iversity)
2. Business Activities of MOOC Providers
REVENUE VS. COSTS OF MOOC PLATFORMS
Content
1. MOOCs in Higher Education
2. Business Activities of MOOC Providers
3. Costs of MOOCs – Practical Experiences from iMooX
4. Discussion – MOOCs in Practice
REVENUE VS. COSTS OF MOOC PLATFORMS
The Project iMooX (www.imoox.at)
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Project details
• iMooX is a publicly founded project with the idea to bring open online courses to a public audience
• initiated by the University of Graz and Graz University of Technology
• target group: pupil as well as elderly people
• Status Quo of iMooX• 3000 registered users• 10 courses• each course bases on standard creative commons licenses
(CC)• xMOOCs contain mainly quizzes, videos and forums
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Cost Model
Based on the experiences during implementation of iMooX costs of production and provision of xMOOCs could evaluated
The cost model bases on following assumptions:• working on one course unit requires about 12 hours• for one minute video about 3.5 hours work are estimated• for the post-production the amount of work is about 1.5h per video• upload of course content to the platform takes about 3.5h per unit• pedagogical supervision will take about 15h for one course• technical assurance is about 10h per course
The estimations (in hours) are taken from our experiences of the first three MOOCs at iMooX in spring 2014.
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Cost Model in detailown MOOCs – variable costs for each course unit concept of the course content (€ 38.31 x 12 h) € 459.76 video production (2 Videos à 6 min; € 19.45 x 20 h x 2) € 777.86 post-video production (2 Videos; € 19.45 x 1.5 h x 2) € 58.34 upload of content to the platform (€ 15.20 x 3.5 h) € 53.21 in total € 1,349.17own MOOCs - variable costs for each course pedagogical supervision and quality assurance (€ 25.00 x 15 h) € 375.00 technical assurance and operational test (€ 15.20 x 10 h) € 152.02 in total € 527.02teaching and Supervision - variable costs for each course unit lecturer (€ 38.31 x 5 h) € 191.57 teaching Assistant (Supervision of discussion forum; € 15.20 x 5 h) € 76.01 in total € 267.58current cost – one-time costs per year platform and project management, marketing (€ 30.77 x 56 x 6 h) € 10,337.70 on-going platform development (€ 19.45 x 56 x 40h) € 43,560.35 support – user questions (€ 15.20 x 56 x 1h) € 851.33 marketing – tangible means € 2,000.00 in total € 56,749.38infrastructure costs – One-time costs per year vCPU, RAM and HDD € 442.00 electricity € 200.00 staff € 100.00 in total € 742.50
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Hosting of MOOCs
A possibility of covering the overhead costs of running a MOOC platform is a fee for hosting the content (see next slide).
Assumptions:• 80% of the courses on the platform will be provided by non-profit
institutions• 20% of the courses on the platform will be provided by commercial
institutions• the fee charged by commercial institutions is 250% higher than the fee
charged from non-profit institutions• a marketing cooperation provides a fixed yearly income of 7,000 €
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Fees for hosting of MOOCs (4 Cases)
case 1 (basis case): 10 external MOOCs essential fee per year and course
8 courses of non-profit institutions € 3,883.99
2 courses of commercial institutions € 9,709.98
case 2: 20 external MOOCs
16 courses of non-profit institutions € 1,942.00
4 courses of commercial institutions € 4,854.99
case 3: 30 external MOOCs
24 courses of non-profit institutions € 1,294.66
6 courses of commercial institutions € 3,236.66
case 4: Reducing labor costs of programmer
cost savings -€ 26,533.69
in this case essential fee per year in case of 10 external MOOCs:
8 courses of non-profit institutions € 1,842.94
2 courses of commercial institutions € 4,607.35
3. Costs of MOOCs
REVENUE VS. COSTS OF MOOC PLATFORMS
Content
1. MOOCs in Higher Education
2. Business Activities of MOOC Providers
3. Costs of MOOCs – Practical Experiences from iMooX
4. Discussion – MOOCs in Practice
REVENUE VS. COSTS OF MOOC PLATFORMS
So what?
How can MOOC-platforms operate sustainably?
Some ideas!
REVENUE VS. COSTS OF MOOC PLATFORMS
Lessons Learned I
• financing only by fees for hosting seems to be unrealistic• one additional source of financing could be public funding,
e.g. by providing the technical infrastructure and staff• MOOCs might be funded by universities themselves,
because • marketing effects• reduction of drop-out rate
• professors might produce MOOCs by themselves, because• accessibility to high-quality higher education• improvement of public prominence
4. Discussion
REVENUE VS. COSTS OF MOOC PLATFORMS
Lessons Learned II
• the corporate training market as possible source of income• Udacity has lately focused its business model on this segment• rapid growth in the corporate training market (worldwide)
• alternative sources of income• selling of certificates or credits• bonus for referred buyers in e-commerce (e.g. amazon
partnership program of coursera)• reports of the courses about learners’ performance for
trainers, teachers as well as companies• contributions from sponsors or advertising revenue• additional chargeable teaching services (e.g. for supervision)
4. Discussion
REVENUE VS. COSTS OF MOOC PLATFORMS
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