Free Courses From The Best Universities – Will The Money Follow?
In 2006, Salman Khan (no relation to that other great creator of social value, Salman Khan, of Bollywood fame), an MIT and HBS grad, launched a website called KhanAcademy.com with very high quality instructional videos on most subjects that high school students in the US, and elsewhere, learn in their classrooms.
With than 226 million free “lessions” under its belt, it is certainly living up to its mission while being funded 100% by the likes of the Bill and Melinda Gates foundation:
With a library of over 3,800 videos on everything from arithmetic to physics, finance, and history and hundreds of skills to practice, we’re on a mission to help you learn what you want, when you want, at your own pace
Possibly as a result of that, or perhaps independently, over the last 2-3 years, a number of prestigious universities acting independently and working with companies such as Coursera, are offering courses to the whole wide world at no cost.
As a consumer, I am, of course, thrilled at this development.
In the past, if I wanted to learn about Evolution for example, from prestigious Duke University or if I wanted to study Machine Intelligence from Stanford, I would have had to enroll in a degree program (assuming that I even got in), paid a lot of money, bought all the relevant course material, traveled to the university, found local accommodation, etc., a process that could easily run into thousands of dollars if not more…and that’s not even including the hassle factor and the logistics.
Instead, today, I can simply go to Coursera’s website, pick one of the participating universities, click on the list of offered courses and enroll. As simple as that. The question though is, thrilled consumers the world over aside and possibly immense pent-up demand for something like this, how will the universities make money?
If you assume that the cost of a course at a university consists of
Course Material + Course Creation Time + TA Time + Instructors’ Time + Facilities’ Cost + University Brand “Premium”
then it certainly makes sense that by spreading the costs (fixed and variable) over a much larger pool of students, universities could offer these at very low costs. But at the same time, it costs real money to run these courses, pay teaching assistants for their time for the duration of the course (to run assignments, collect and grade results) and some time from the instructors. (As much as $50,000 per course, per the article excerpted below.)
So what’s the optimal pricing model?
That, is still a work in progress. For now, as a longish but interesting article in the NY Times says, everyone’s trying to build a brand online (does Stanford really need to build its brand?) and get the word out.
“Monetization is not the most important objective for this business at this point,” said Scott Sandell, a Coursera financier who is a general partner at New Enterprise Associates. “What is important is that Coursera is rapidly accumulating a body of high-quality content that could be very attractive to universities that want to license it for their own use. We invest with a very long mind-set, and the gestation period of the very best companies is at least 10 years.”…
“We’ll make money when Coursera makes money,” said Peter Lange, the provost of Duke University, one of Coursera’s partners. “I don’t think it will be too long down the road. We don’t want to make the mistake the newspaper industry did, of giving our product away free online for too long.”
Here’s to hoping they succeed and find a way to offer some of the best courses to tens of thousands of people around the world at very low costs, but still make enough money to keep the “experiment” running.
Please notify me of new courses.