August 22, 2014

eLearning Market Review

Traditional Education

Traditional education consists of face-to-face courses, textbooks, paper

assignments, and limited flexibility.

− Course size limited due

to capacity restrictions

− Tuition costs continue to

rise each year

− 50% of students use

their laptops for note-

taking in class at least

once a week

Why eLearning?

eLearning has grown significantly over the past few years and will continue

to grow in the future.

− In 2013, 7.6 million students were enrolled in at least one online class;

an increase of 411,000 students since 2012

− 74% of big academic players rate online learning outcomes the same

or better than traditional learning

− Only 9.7% of polled institutions reported online education was not a

critical part of their long term strategy

Source: Babson Survey Research Group

Innovating Traditional Education

eLearning offers several capabilities that traditional education does not:

− Scalability

− Cost-effectiveness

− Convenience

− Digitalization

Opportunities for eLearning

− Education on a mass, global

scale means more people can

become students

− Brick-and-mortar institutions

looking to increase enrollment

can do so through adopting

eLearning methods

− Marketing opportunities are

high among startups that

currently run off word-of-mouth

eLearning Industry Growth

− No longer saturated exclusively

by big online universities, though

still the market leaders

− Start-ups have entered the

industry offering new methods to

approach how to educate online

− Higher education institutions

looking towards these start-ups to

help develop their online

curriculum and experiment with

new methods

eLearning Landscape

For Credit No Credit

Online

Universities

Partner

Programs

Brick-and-Mortar

Efforts

Enrichment

Courses

MOOCs

For Credit: Online Universities

− Online universities continue to lead the eLearning market

− According to Nielsen data, television and internet advertising

(respectively) garner the most spend from online universities

University of Phoenix

TV ads $105.6M

Internet $3.57M

DeVry University

TV ads $62.58M

Internet $7.64M

Kaplan University

TV ads $8.95M

Internet $905K

− 2011: University of Phoenix, Online Campus had highest enrollment of all

degree-granting colleges or universities with 307,871 enrolled students*

*Source: National Center for Education Statistics

For Credit: Partner Programs

−2U: Provides a cloud-based

software-as-a-service platform to host

educational content that can be

accessed globally

− Q2 2014 revenue was $27.4M;

32% increase from Q2 2013

−Has raised $95M in funding

− No marketing efforts due to

required enrollment with a

partnered institution

− Programs that offer online versions of degrees from accredited brick-and-

mortar institutions

Source: 2U press release; 2U Impact Report 2014

No Credit: MOOCs

− Free, not-for-credit courses

for personal learning, resume

building, and certification in

select subjects

− Created by higher education

professionals and enhanced

by partnerships with large

organizations worldwide

− Opportunity to act as

content marketing medium for

organizations and institutions

− Brick-and-Mortars using

MOOCs as an chance to

experiment with eLearning

Source: The Chronicle of Higher Education

No Credit: Enrichment Courses

− Courses based in advancing one’s personal

education, such as learning a language or a

vocational skill

− Open English: personalized learning 24/7 ($350M)

− Lynda.com: contributor-model allows for content

creation in large quantities; received $103M in

funding in January; 1M+ paying members

− Codecademy: leading the free eLearning category

with 24 million users, $12.5M in funding, expanding

overseas

− Called the “Next Frontier In Digital Education”

by Forbes

Future of eLearning

− Worldwide eLearning Market projected to

reach $51.5B in revenue by 2016

− North American eLearning revenue

alone projected to reach $27.1B by 2016

− Cloud-based software-as-a-service solutions

will continue to grow as a platform for

eLearning

− Corporate eLearning to begin replacing face-

to-face training sessions due to convenience

and cost-effectiveness for employers

− K-12 sector will continue to be impacted

most by innovative eLearning technology in

coming years

Source: Docebo E-Learning Market Trends &

Forecast 2014 - 2016 Report, March 2014

THX

San Diego

2173 Salk Avenue

Suite 300

Carlsbad, CA 92008

(760) 929-0041

Portland

920 SW Sixth Avenue

Suite 111

Portland, OR 97204

(503) 228-5555

Boston

101 Huntington Avenue

21st Floor

Boston, MA 02199

(617) 585-3000

Los Angeles

6922 Hollywood Blvd.

2nd Floor

Hollywood, CA 90028

(310) 734-1333

London

6 Briset Street

London, EC1M 5NR

44 (0) 20 7017 1082