Friday, September 13, 2013

Financing the Massively Open Online Courses

Because internet capacity has grown so much over the last couple years it is now cheap to provide streaming video.  There is a movement called MOOC which stands for Massively Open Online Courses.  A college professor teaches a course which is made available over the internet.  Some of these courses are getting tens of thousands of people to sign up. 

One of the concerns has been how to make money on this.  Even though it is fairly cheap for one professor to teach ten thousand students there is still some costs associated with the process.

Free Massive Online Education Provider, Coursera, Begins To Find A Path To Profits reports that Coursera has been able to raise over a million dollars via paid certificates for students who complete their courses.  This is a good start.  The article explains:

Online education providers may very well disrupt the higher education establishment, but, first, these for-profit companies need to find a way to finance the mammoth technical infrastructure needed to support millions of students. It’s a challenge that all mission-based businesses wrestle with, and why many have wondered whether Massively Open Online Course (MOOC) providers will ever become big business — or be around in five years — let alone “transform higher education,” as they’ve so often promised.

Today, one of the biggest MOOC providers on the Web, Coursera, showed skeptics that it has indeed found a way to monetize free educational content and may just be on the road to riches. In a blog post this afternoon, Coursera announced that it has raised over $1M for paid certifications, which verify that students passed (an otherwise free) online college course.

Once a viable financial model works to allow companies and colleges to make money with these Massively Open Online Courses we should see a huge implosion in the number of students who go to college classes because it will be orders of magnitude cheaper to take the MOOC courses.  I expect that some colleges may end up having to scale way back or even close due to declining enrollment.

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