What’™s the future of MOOCs?

The success of Massive Open Online Courses (MOOCs) centres on finding a business model that works

By David Smith, director at Simon-Kucher & Partners

Recently many UK universities have begun offering MOOCs. For the most part, these have been offered free of charge, but it is not entirely clear whether this represents a sustainable business model. Pricing digital content is a hot topic across a range of sectors at the moment, the commonality being that once an industry has “gone free” it’s often hard to go back. Indeed universities can learn a lot from other digital businesses such as social networks and online newspapers. From my experience working both in HE and with numerous media / online business, I would propose the following five learnings:

1)    Maintaining a free “front page” will be critical to give potential students the opportunity to sample the product. This is particularly important for new / innovative products where the value proposition is unclear at first.

2)    …hence a freemium model is most likely the best bet. The key for universities is to think creatively about what they could potentially charge for and how this fits with what potential students would be willing to pay for.

3)    The price model universities use will be at least as (if not more) important than the price level. In other words, the way universities charge – be it per course, for a monthly pass, for accreditation, for access to extra features – will most likely be more important than the amount they charge.

4)    Universities should be creative when considering potential price models. It doesn’t just have to be a price per course. You could charge for access to a range of content or “membership”. The price model should encompass the university entire digital offering, not just MOOCs.

5)    It is essential that universities begin capturing data from their users. This is key for online businesses, as you will likely want to up-sell / cross-sell to them at some point. World class digital businesses know who their customers are, what they’re looking at, and can contact them. Ultimately universities need a clear migration path for their users, from free to paying for something… to ultimately enrolling on a full time course

In my next blog I will explore the value-based methods we use to quantify what potential students are willing to pay for, and how to arrive at the optimal price level. This will be relevant for both MOOCs and pricing traditional courses.


Read more from David here:

Is the price right?

Implementing value-based pricing

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