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So MOOCs Are Not That Hot After All? Hmmm.

MOOCs are THE hot topic, aren't they? Universities are debating how to respond. We hear amazing numbers of students enrolled.

Today we will look at the actual enrollment and completion figures. We will consider the long term brand implications for universities and their academic staff as well as anticipated changes in the competitive environment. Trust us, you will want to read to the end of this one to evaluate our predictions about how schools can stand out as MOOCs cause the market to shift. Let us know what you think by adding to the discussion below.

Let's get right to it. Katy Jordan compiled the information on the numbers enrolling and the percentage of students completing courses offered by a wide variety of MOOC providers. We encourage you to click on the chart and visit Katy's blog MoocMoocher if you want to see the details for the individual courses or providers. Here is a summary of the facts as presented by Katy on her blog:

  • How big is the typical MOOC? 180,000 is often cited as the largest MOOC. So far, 50,000 students enrolled is a much more typical MOOC size.
  • How many students complete courses? Completion rates can approach 20%, although most MOOCs have completion rates of less than 10%.
  • What factors might affect completion rate? The way that the course is assessed may affect completion rates. The completion rates of courses which use automatic grading range from 4.6% to 19.2%, while the rates for courses which use peer grading range form 0.7% to 10.7%. This may present a greater challenge for teaching MOOCs in certain subjects where automatic grading does not work well.
  • Do more students drop out if courses are longer? There does not appear to be a negative correlation between course length and completion rate. This finding is counter-intuitive as you might expect fewer students to have the stamina to complete longer courses.

Source: ClearingHouse NSC Signature Report

We find the discussion about low completion rates of MOOCs surprising. Why?

  • MOOCs are largely free courses so participants really don't have that much skin in the game. There is no barrier to enrolling regardless of your plans. And there is no penalty, i.e., lost tuition, for dropping out.
  • There is usually no fixed class time assigned so participants are required to have much greater self discipline.

Consider "real world" graduation rates (see table to the left). The average graduation rate is 51%, with a range of 36% to 71%. So it seems that MOOC completion rates of 10 to 20% could be considered both acceptable and respectable. We also expect that the MOOC novelty factor will wear off. So down the road, we'll have more serious and more committed students signing up over the long term. Our predication: smaller enrollment figures and higher completion rates in the future.

As we look forward, we are confident that MOOCs will become even more convenient and accessible and more acceptable as a source of academic knowledge. With these advances there may be significant increases in the total numbers of participants beyond anything our current university course system would permit. MOOCs offer a tremendous capacity to disseminate knowledge which is the underlying mission of our current system. Think of the impact Khan Academy has in reaching students with their free classes. We have heard repeatedly that people feeling the need to refresh certain skills are relying on Khan Academy to provide the content. Over time, online tutoring and mentoring will supplement classroom activity/courses leading to greater structure for the online training process. We believe these system improvements will usher in greater acceptance of MOOC credits by many academic institutions and employers, making MOOCs a more established element of earning a degree.

Hybrid online and offline courses are already common. We think it will become the norm. And the quality of digital content offerings will get better and better. And this "better" content can be shared widely. So, those courses with better production value (better content, better speakers, better graphics, etc.) will cost more to produce and at the same time, will achieve the kind of scale that justifies the investment. Think about high grossing motion pictures. The more that goes into them, the more viewers you need to turn a profit. Studios with a track record of big hit successes continue to take risks and make big investments to produce the next blockbuster.

We all know about the decreased use of tenured faculty and increased use of contract faculty and even adjunct faculty within U.S. academic institutions. In our view, MOOCs will lead to more content created by "star professors" reaching broader groups of students. Why learn business strategy from your average business professor (let alone adjunct, and yes I was one of them). Wouldn't you rather learn directly from Michael Porter -- the Harvard strategy guru himself?

10 years from now there will be specific courses that establish common cultural bonds around the world. Consider the shared experience of 2M (20M?) people who have completed the work for an online course on basic engineering provided by MIT's most dynamic professor with stellar visuals. Social media profiles, like those found on Linked In, will display certificates of completion for a range of classes establishing interpersonal connections similar to our current school alumni chapters.

In our view, leading MOOC providers can only survive if they succeed in convincing hundreds of universities and colleges accross the globe to license highly branded university content delivered by star professors. A small number of national university brands will compete and grow their market share. We will see an interesting battle between content and distribution. Think of the competition among cable networks. No cable network can survive without ESPN and that reality gives ESPN real pricing power. Most of the other 200 channels are not a "must have" for cable distributors and so, these channels have much less pricing power. We can foresee that battle emerging between leading MOOC brands with broad distribution and university content providers.

So where does it go from here?

As of one of the consequences of broader MOOC acceptance, academic staff in most institutions will lose part of their academic freedom in the classroom while they teach and tutor to more standardized curricula. It won't be the U.S. government setting national standards, but the market will offer, and students will demand, certain content providers. For example, a student may choose where to study engineering based on the content provider license that school uses. A student may feel the MIT method is superior. Or maybe access to the computer science content/curriculum license provided by Stanford University is the decision driver. The competitive dynamic of university services and marketing will shift:

  • Campus student services and facilities may matter even more as content becomes more of a commodity. If I can get the same academic program in different places, the university with the best athletic program/facilities could be my decision driver.
  • Providing live (online or in-person) tutoring and mentoring to help students get through online courses that have little human interaction will become a differentiator
  • Long term career services, employer relationships and co-op programs will continue to increase in importance as a differentiator

And, pricing likely will be under even more pressure since lower cost providers will compete with the same content offering. Employers will be able to evaluate the education credential more easily across a broader group of schools. If you want to see an example that has been around for decades and is already widely accepted in the world of finance, look at one of the largest and oldest MOOCs in the world: The Chartered Financial Analyst (CFA) program (read our blog entry The biggest MOOC in finance - friend or foe for universities).

Bottom Line Predictions: Offline universities will not disappear; regional competition will intensify; academic, career, student and alumni support services will increase in importance as market differentiators.

And it won't take long for this to happen in academic industry terms. Your university graduating class of 2020 is in 9th grade right now and they are digital natives.

Graph 1

Sources: http://www.katyjordan.com/MOOCproject.html


Topics: Insights