MOOC Providers Turn to Flipped Classroom Model for Success, Revenue

Massively open online courses (MOOCs) providers including Coursera, Udacity, and edX are struggling to find a business model to "accompany their noble cause" of democratizing and reducing the cost of higher education. According to Issie Lapowsky of, these online course providers are planning to implement a flipped classroom on campuses to generate some revenue and help make their projects sustainable.

In the flipped classroom method, teachers offload their lecture time to video that students can view at home so they can spend more time interacting with students in class.

The move into the classroom setting is critical to MOOC providers for two reasons. For one thing, there's very little money to be made in giving a college education away for free. By finding ways to generate revenue from universities, companies like Coursera might be able to supplement the courses they give away for free. Second of all, universities that have already implemented the flipped classroom are seeing impressive results.

MOOC provider EdX is working to implement a flipped classroom system. Last fall the company launched a pilot program at San Jose State University for students in an Introduction to Circuits Analysis class. The result after one semester showed that the failure rate for students in the flipped classroom dropped was just 9%.

"The edX course was used as a sort of new age textbook," edX President Anant Agarwal said. "Typically students have to do reading assignments before class. Here, they watch a video, do interactive exercise, and in class they interact with the professor and each other."

edX did not charge San Jose State for the pilot program and it was a free course. Starting this fall, the company plans to offer the flipped course to all California State University campuses for a fee.

In addition, MOOC provider Coursera announced this May that it signed deals with 10 state universities across the country to bring the flipped classroom to their campuses.

Under the agreements, universities will pay Coursera between from $8 to $25 per student based on the class size, and "the prices will also vary depending on whether the content is created internally or externally by another university."

Coursera Co-Founder Daphne Koller said experimenting with business models is critical to this industry. It's important to remember, he says, how new this space is and how very little education has changed over the last century. "We have to be ambitious, otherwise education will stay the same for the next hundred years. Some experiments will turn out well and some won't," he says, "but as they say, ‘Nothing ventured, nothing gained.'"

In 2013, Georgia Tech University announced that it will launch an online master in computer science through Udacity for the low price of $6,630. The university did not disclose further details about the plan.

But for all the promise of online education, there are still stumbling blocks. San Jose State University recently ended its partnership with Udacity after their three introductory online courses turned in problematic results. In January 2013, San Jose State University announced plans to enroll up to 300 students in three online courses. Two weeks ago the results of the experiment came in — and more than half the students flunked. The results showed that only between 20% and 44% of students passed.

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