Two Schools Try Different Approaches to Monetize Online Ed

Last week NPR made a prediction that for colleges, there are savings to be found and money to be made in taking advantage of opportunities offered by the growth of online education. Now, NPR looks at how two schools in Ohio are employing digital learning and what kind of benefits, fiscal or otherwise, they are extracting from the experiment.

Ohio University recently introduced an online education solution to some of its classes via a platform developed by McGraw-Hill. The platform, named “Connect,” was meant to give students a choice between purchasing a full-price paper edition of the textbook at the campus book store instead purchase a discounted e-book version via “Connect.” For Nick Kroncke, an Ohio U sophomore studying environmental geography, this wasn’t such a great choice. Mainly, Nick took exception to the prices set on the paper and e-versions of the textbook used for his introductory music course.

The choice was to either buy a $100 textbook that had the code for Connect or pay an astounding $40 for the access code to it and the book as well. Instead of using Blackboard for simple multiple-choice questions, we are expected to pay for digital access to something that fails to improve the learning experience.

Nick points out that charging 40% of the price for something that cost substantially less to produce and offers drastically reduced functionality hardly seems fair. Still, even at a 60% discount, the savings obtained via publishing, storage and distribution costs shows that “Connect” could serve as a big moneymaker for a publishing company like McGraw-Hill. On the other hand, as Nick points out, putting information in a digital format does open the door to piracy, which could serve to drain some of the profit margin and force the company into a more aggressive pricing strategy in order to disincentivize theft. Still, unlike the digital learning efforts at Ohio State University, at least Connect shows returns for investment now and not sometime in the nebulous future.

Such are the revenue projections for OSU’s involvement with Coursera through whom the school begun to offer free online courses starting in the middle of last month. In inking the partnership agreement with the online education platform, OSU secured for itself between 6% and 15% of gross revenues generated by the classes it offers, but no one anticipates seeing any money anytime soon. Wayne Carlson, vice provost for undergraduate studies, said that the Coursera partnership wasn’t about money — at least in the short term.

“There is no revenue stream through Coursera at this particular point,” Carlson said. “What the terms of agreement did is it looked at possibilities for future revenue sharing, all of which would need to be negotiated at the time that any revenue stream actually did occur, which is not completely clear.”

Carlson said the university does not look at the agreement with Coursera as a way to profit, but as an opportunity to take advantage of new technology.