MOOCs May Be Free for Students, But They’re Expensive for Schools

Millions of students around the world are enrolling in massive open online courses (MOOCs), and the free online courses are being offered by a number of leading universities and colleges such as MIT. Taking a MOOC is free for students and cheap for those who seek a credit, but it isn’t cheap for those who create it.

MOOCs produced by experts using a webcam and uploaded via an open source platform are inexpensive, but building a MOOC with professional cameras and video editing can cost up to a quarter-million dollars, Rachelle DeJong writes in Minding The Campus.

Building a MOOC involves writing lecture scripts, rethinking course structure, creating a slew of multiple choice quizzes, adapting grading software, filming lectures and discussion groups, editing footage, and building a course page.

Once the course goes live online, someone has to pay for chat feed monitors, glitch repair, and a squad of tutors and administrators. All this for a product that’s supposed to resemble a frozen dinner: pre-packaged, simple to prepare, and consumed in front of a screen.

Three different entities are factored in to the production of MOOCs: a school volunteering content; a platform to hosts it; and external third parties making it all possible.

Udacity spends ~$200,000 to create a MOOC. And the cost could go higher, as the company is working to launch MOOC 2.0, a modified version that includes more personal interaction with professors, tutors, and mentors. Udacity formed a partnership with Georgia Institute of Technology to offer master’s degree in computer science, which could signal the next step in MOOC maturity. Following the partnership, Udacity expects to double its costs to $400,000 per course.

EdX, which is run jointly by MIT and Harvard, allows partners to create a MOOC on their own and then submit the finished product to EdX. It also gives an option to its partners to pay for EdX’s design and consulting services at a rate of $250,000 per course plus another $50,000 each time the course is re-run.

MIT and Harvard each fronted $30 million to jumpstart EdX. Anant Agarwal, president of EdX, emphasizes the need to generate sustainable sources of money to avoid becoming a drain on its university parents.

Georgetown, when it announced a partnership with EdX, planned to invest $2 million in the Harvard-MIT brainchild, while Amherst College expected to spend a total of $2.2 million, though the faculty voted down the proposal. Meanwhile the University of Texas shelled out $5 million to join EdX.

Coursera’s partner schools spend thousands of dollars on their own course development. The University of Pennsylvania spent about $50,000 per course, while the University of Edinburgh dropped ~$45,000 on each of its six courses.

The University of Pennsylvania and the California Institute of Technology invested $3.7 million when they joined Coursera, justifying the expenditure as an investment in branding and a platform for future online possibilities.

In addition, third parties are helping to finance MOOCs. The Bill & Melinda Gates Foundation spent millions of dollars promoting MOOC use and especially advocating for MOOCs in remedial education. Gates has provided EdX a grant of $1 million.

Also, there are the venture capitalists, which have backed Udacity with $22 million and Coursera with $65 million.

MOOC providers are now looking for a viable business model that meets the needs of both education and business, according to David Raths of Campus Technology. Many colleges and universities say that the “current environment more closely resembles a high-stakes game of musical chairs — everyone is terrified of being left without a chair when the music stops.”

09 24, 2013