Money Models for MooCs
Considering new business models for massive open online courses.
DesPite the Massive media ink spilled over massive open online courses, the ink spilled by MOOCs them- selves remains red. MOOCs
lose money. Most are free. 3
Universities and venture capitalists subsidize
them while searching for the class of
the future. This cannot continue but
their future, we believe, is bright.
Education is only the latest industry to face digital disruption. Music,
movies, news, travel and real estate
already traveled this path. Conventional business models—charging
customers directly for products and
services—are often ineffective online. Media companies painfully discovered that free alternatives such
as YouTube videos, news blogs, independent fiction, Wikipedia pages,
and the ease of piracy place limits
on charging for content. Travel agencies discovered, equally painfully,
that free alternatives and consumer
ratings place limits on charging for
bookings and advice.
IlluStratIon by hermIn utomo
After years of trying to replicate old
business models online, companies,
or their competitors, built platforms
that offer free service and information
as bait to attract users and their activity. These platforms monetize eyeballs,
comments, referrals, and relationships based on two key ideas:
˲ Charge for complements, including
analytics and value-adding activities
performed by users. 2 Red Hat Linux offers Linux software for free and charges
for consulting and technical support.
Tumblr offers blogging and social
networking for free and charges for
analytics. From a MOOC’s perspective,
teaching a man to fish allows us to sell
him a boat. We can also sell the fish he
caught while learning.
˲ Charge a different group with interdependent demand. 6, 7 TripAdvisor offers
free advice to travelers and charges airlines and hotels. LinkedIn offers many
free services to job seekers and charges
recruiters. Teaching a man to fish, we
can charge fleet captains who hire him.
The first idea defines what one pays
for, which can be content or complement; the second idea specifies who
pays. We used these ideas to create a
matrix of possible business models,
shown in the accompanying table,
and identified a number of plausible
money models for MOOCs.a We organize our discussion by who pays.
a We certainly do not claim our current list is
complete and we invite readers to populate
cells we left blank with interesting new ideas.