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21 March 2013

Education disrupted?

The meteoric rise of the massive open online course (Mooc) has some calling time on traditional campus learning, but do the online courses have a sustainable future? Gregg Bayes-Brown reports.

Author: Gregg Bayes-Brown, editor

Despite being the breeding grounds of innovation, supplying both graduates bristling with ideas and spin-out firms themselves, universities around the world are grounded in tradition. The formula behind the institutions has remained unchallenged for centuries, but an internet-driven concept of learning – the massive open online course (Mooc) – is seeking to change this.

UK-listed publisher Pearson commissioned a report, An Avalanche is Coming, which issued a warning about Moocs that even the University of Cambridge has taken notice of.

Previously cool towards online learning, Cambridge, along with other institutions, is becoming increasingly aware of the popularity, huge growth and disruptive nature of the US-driven Moocs, such as Stanford University-backed Coursera, founded last year with $16m of venture capital.

Coursera is now the largest of the three main platforms, boasting more than 2.7 million students worldwide, and recently announced 29 new university partners, bringing the total partner count to 62.

Joining the expansion is Massachusetts Institute of Technology (MIT) and Harvard University-backed EdX, which added a further six partners, including its first institutions outside the US, and now has a total of 12 organisations, having garnered up to $160m in university venturing funding (see box).

Although it can cost up to $50,000 to produce a Mooc, EdX is the only one of the big three platforms to have received financial backing from the institutions. In the case of Coursera, partner institutions will receive a cut from the platform’srevenues once they start coming through. It is understood that Futurelearn, the UK’s Mooc platform in development, is receiving backing from its academic partners.

In news welcomed by UK Prime Minister David Cameron, Mooc provider Futurelearn added to its all-British line-up with seven new partners, including the British Council and the British Library, joining a number of prestigious UK universities including Cardiff, Birmingham, Warwick, Exeter, and Southampton. The platform, led by distance educator Open University, is due to start offering courses in the second half of this year.

Futurelearn also revealed that the platform will be forprofit, at a time when US rivals are seeking viable business models. While the rate at which the main three US Mooc platforms have grown is rapid, the return on investment for providing free-to-access higher education is unproven for venture capital investors.

Monetising free education

While EdX remains non-profit, both Coursera and the third large platform, Udacity, have received $22m in venture backing over the past year. Udacity was the first of the three platforms and was founded by Stanford’s Prof Sebastian Thrun, the man behind Google X, the research unit that developed the internet giant’s self-driving car and upcoming Glass product.

Udacity has grown its globally reaching userbase to more than 400,000 students in a year, and plans to continue growth with computer science-focused courses backed by names such as Google, Microsoft and Nvidia.

Like Coursera, Udacity is developing how it can make money. Coursera has plans to charge between $30 and $120 for a certificate at the end of the course.

However, invigilation issues remain a significant hurdle for Moocs, along with high drop-out rates. Many academics have already underlined the importance of Mooc platforms ensuring they are testing the student, and not the student’s skills with Google search, to gain credibility.

To this end, Coursera has partnered online invigilation firm ProtorU and has been granted permission to award credit for a small number of courses by the American Council on Education.

While the courses are pulling massive numbers of students, with some courses enrolling hundreds of thousands before they start, all reports on progression through the course show a staggering fall off. On some courses, over half the original number of signups won’t even turn up for day one. Student numbers continue to slide throughout the length of the course,  with the number engaged with both the learning and completing assessments dropping as the weeks go by. By the end of the course, most will have suffered a dropout rate averaging 90% to 95%.

Therefore, the numbers being bantered about by the platforms dwarf the comparatively small number of potential customers who actually reach the end of a course and pay for certification.

The providers are also looking at other means of generating an income. Coursera has begun offering headhunting services where top Mooc performers can have their details passed to big name tech firms.

While the platform can hope for significantly higher finder’s fees than it would for certificates, the model is still plagued by accreditation and drop-out issues.

There is also the angle that Moocs could be seen as more of a marketing tool than a money-spinner, positioning the institutions that offer the courses on a global platform with the aim of turning Mooc users into fulltime degree students. Thrun certainly sees this as the future, and has made the somewhat ambitious prediction that in 2050, there will be only 10 universities left in the world – those with a significant online presence.

To Thrun and his peers, the key to success in this emerging education-technology sector is to secure the userbase while simultaneously developing the pedagogy of the classes on offer. In this regard, how Moocs will make money is a can that has been kicked far down the road, with much of the focus remaining on building the userbase and getting the teaching right before turning attention to the issue of monetisation.

Other players

Aside from the business model, or lack thereof, the big three also have other contenders. Already armed with a userbase of more than 300 institutions and 4 million users is Learning Management System (LMS) provider Instructure’s Canvas Networks.

The firm has received $9m in venture backing and offers partners more freedom over course content than the more rigid big three. Fellow LMS Blackboard is following suite, realising the potential of utilising a platform already in the universities to promote its Mooc efforts.

Lurking in the background is online search engine Google, which has already produced both a Mooc in power searching and Course Builder, an open-source platform for universities to design and upload their own Moocs.

It has also funnelled £2m ($3m) into the Bill Gates-backed Khan Academy, which has so far delivered more than 245 million online lessons. Google has now announced it will channel $50,000 into Cornell University to produce a humanities Mooc to be hosted on Course Builder.

Google investing in Moocs could lead to other partnerships between universities and corporations.

True innovation?

There are broader questions about whether Moocs are an innovation at all. Open educational resources (OERs) have been available for well over a decade, such as Wikipedia and MIT’s OpenCourseWare, while Khan Academy has offered free online lectures in a range of subjects since 2006, and the Open University was providing free lectures on UK television in the 1970s.

There have also been failed attempts at online learning, such as when the Oxford, Stanford and Yale-backed AllLearn folded in 2006. Similar efforts, such as the UK’s e-University and several US efforts, have also failed.

But since then, Moocs have proven to be one of the fastest-evolving ed-tech trends by utilising technology and internet infrastructure improvements, such as broadband speeds, since the early 2000s leading to increased interactivity and gaming.

As Daphine Koller, chief executive at Coursera, said: “A year ago, I could not have imagined that we would be where we are now. Who knows where we will be in five more years?”

BOX: Mooc money
Investment is pouring into the revitalised sector of online learning. These are the
platforms leading the pack.
1 EdX – $30m from both Harvard and MIT to kick-start the venture. Since then, each
new partner has put up at least a further $10m, some up to $20m, bringing the
minimum backing to $160m.
2 Coursera – $22m from Kleiner Perkins Caufield & Byers.
3 Udacity – $22m from Charles River Ventures, Andreessen Horowitz and others.
4 Instructure – $9m in backing from Epic Ventures and others.

BOX: Mooc jargon busted

As with any part of higher education, the Mooc sector is a fan of jargon and acronyms.

l Mooc - massive open online course. Defined by two key attributes – open access and large scale. To be defined as a Mooc, courses must be free and open to anyone, and also designed with a large audience in mind. There are two types of Mooc:

l cMooc – the original Mooc, with a focus on connectivism. These courses are generally built from OERs with a loose structure that can span multiple institutions and information repositories.

l xMOOC – the kind seen on the major Mooc platforms. These courses are centralised, such as the Coursera platform, and take their information from a single university.

l OER – online educational resources paved the way for Moocs. Moocs are built from OERs. Typical OERs are Wikipedia, iTunes U, MIT’s OpenCourseWare and the Open University’s OpenLearn.

l Blended learning – the utilisation of an online element to a traditional course. For example, those studying computer programming could utilise a Mooc that teaches a computer code such as HTML or C++ to augment their studies. Alternatively, a tutor can use a high-quality Harvard lecture, and dissect with their class later.

l Edtech – education technology. EdTech has seen a rapid development over the past year, helped strongly by Moocs, and is forecast to continue similarly over 2013.

Copyright Mawsonia Limited 2010. Please don´t cut articles from www.globaluniversityventuring.com or the PDF and redistribute by email or post to the web without written permission.

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