MOOCs Part One - The Profitability Problem

02 December 2014

Online learning has taken off in popularity and really garnered a lot of press in the last few years. The goal is nothing short of democratizing higher education and making it available without concern for physical classroom walls. But these Massive Open Online Courses, or MOOCs, are at a critical turning point as businesses: how are they going to earn money?

For a few months, I went on a MOOC binge, completing a number of them out of curiosity and to try and learn "something interesting" (more on that later). Even though not all of the courses were equally effective in their pedagogy, I appreciated the professors' efforts to reach a wider audience.

As the most popular MOOCs are running now, however, I am not sure they have addressed some of the fundamental problems with their structure, problems which need to be solved in order to become financially independent or profitable. These obstacles are intertwined, with some of them being addressed already by MOOCs in some way.

This is the first post out of two; here, I focus on describing some big problems that MOOCs face in their path to profitability, and in the next post I'll propose some ways to address these challenges.

In these posts, I will focus on the MOOCs that are ostensibly for-profit companies, such as Udacity or Coursera. EdX is a notable example of a MOOC that is technically not-for-profit, though some of the below points will apply to this category as well.

In no particular order, some challenging problems facing MOOCs include:

The Grading Problem

Courses have to walk a fine line between grading too harshly (thus discouraging or invalidating the work of a larger proportion of their students), or grading too loosely (which muddies the signal of how much a student learned in a course). This is complicated by the fact that many (if not most) courses are graded on a pass/fail system (some with a 'pass with distinction') - the problem isn't just "What does an A- mean for this course?" but "What does a 'pass' mean for this course?".

I think a deeper root of this problem is the question of what the point of a MOOC is - is it to transfer mastery of a topic to a student, or just a passable working knowledge? Or is it just to signal that a student was interested in a topic and put in some amount of time to learn a bit of it? The different courses I took seemed to follow different philosophies on this topic, but I think all of them erred on the side of being too lenient when it came to grading - effort, not mastery over the content, was enough to pass every course.

The Practicality Problem

Are MOOCs trying to teach just practical work-related skills, or to bring elements of a "liberal arts" program to the public? Most MOOCs right now have both (Udacity seems to lean towards the practical), even though the practical skills ought to be more monetizable. But, trying to address both goals might confuse the direction of product development (not to mention the development of online pedagogy). This would seem to make business / monetization problems more challenging, and also create too diverse of an audience to be able to satisfy everyone. This is a deeper question about the philosophy of the MOOC and the "end goal", and whether any single MOOC can reasonably be excellent at teaching both practical and more more liberal arts subjects.

The Openness Problem

One strength of MOOCs is that they are open to students of all backgrounds - there is no barrier to joining the MOOC, many classes are at the introductory level, and prerequisites for more advanced classes are not enforced. This is also a weakness with the MOOC model. One reason is that it is then more difficult to teach advanced topics to a potentially wide range of students and backgrounds. Another reason is that for a potential employer, it obfuscates the signal of a student completing the class: a student completing a course on machine learning has obviously put in some amount of time and effort, but what does it mean if the course had tens of thousands of students? Was the content simplified to reach a loewr common denominator of pre-existing knowledge? Did the student master the content? Achievements shared by too many lose their distinction.

The Brand Name Problem

The biggest MOOCs use partnerships with brand-name universities or companies as a way to advertise the legitimacy of courses. Students can filter the class listing by posted institution, and the instructors are employees or faculty at those institutions. However, any certificate earned as a result of completing the MOOC is not affiliated with that provider institution.

There is some irony in the fact that large numbers of MOOC students might be drawn to a brand name institution because of the perceived exclusivity and thus signalling of that name. I am unsure as to the correlation between the reputation of a MOOC course's institution and the quality of that course (this correlation will probably rise over time), but there is a definite disconnect between a MOOC's desire to use these brand names to attract students, and the schools' reluctance to "certify" potentially thousands of students who complete their courses online.

The Curriculum Problem

This problem occurs on many levels. On the course level, how does a professor choose what material to put into the course? Will she teach just the most practical information, or mix in underlying theory as well (which may not be as practical, but which could strengthen practical knowledge)? On a multi-course level, how does a MOOC create and advertise a set of courses that, when taken together, provide the student with a clearly defined and clearly useful skillset?

MOOCs are now creating degree-like programs (e.g. "Specializations" and "XSeries"), and the design of these mini-degrees bring up some interesting questions (and answers). How many courses should be required? (Anywhere from two to ten.) Should the students be required to take the courses in a certain order? (Yes.) Will the courses still be restricted in terms of timing / when students are able to take them? (Yes.) Will these curricula focus only on practical skills or also other academic topics? (There are generally more computer science-related tracks currently.)

What does the confluence of these problems mean for MOOCs? For starters, it means that taking a MOOC course is not a strong signal that hard, practical skills are being learned, and so potential employers assign little or no value to completing a MOOC. I would also argue that it means that MOOC courses themselves are confused as to what their purpose is, who their students are, and how to hone and direct their pedagogical energies.

MOOCs so far have gained users quickly on a wave of positive press and a general desire to 'do something good' by expanding the opportunity to learn. They should definitely get credit for that - trying to use technology to disrupt an industry as old as higher education is not easy. But at the same time, this could cause MOOCs to focus on a "pop" strategy, where they appeal to the users and focus on metrics like user acquisition, course "completion" rates, depth of course offerings, etc. But these metrics are not ones that translate to the things a business wants to see on a student's resume - namely, verifiable, trusted signals that a student has acquired a certain skill that is necessary or helpful for a position. Until that link is there, MOOCs will probably have a hard time earning revenue.

This is a pretty big problem; next week's post will have some ideas for potential places to start.

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