Four Barriers That MOOCs Must Overcome To Build a Sustainable Model

Given the hype of national media coverage of massive open online courses (MOOCs), it is refreshing to see more recent analysis looking at important attributes such as revenue models, dropout rates, and instructional design. Steve Kolowich at Inside Higher Ed wrote a revealing and important article looking at early demographic data. Jeff Young at the Chronicle wrote an excellent article about Coursera’s contract with the University of Michigan, along with key insights into Coursera’s and the university’s motivations. Audrey Watters, in response to an article in the Atlantic, asks the tough question of whether we should care about the high dropout rates of current courses offered in this new model.

When analyzing the disruption potential of MOOCs, it is easy to forget that the actual concept is just 4 or 5 years old. Furthermore, the actual definition of the concept has undergone a significant change in the past 12 months as an entirely new branch has emerged.

While the current examples of massive online courses are interesting, the real potential of MOOCs will be revealed in future generations. To provide context, it is useful to consider two observations (based on a recent post):

  • The two current branches of MOOCs are different and will not merge – despite the common name, they have different aims and methods. It is a mistake, in my opinion, to overlook the differences.
  • Both branches are early prototypes or pilots. The future of MOOCs will be based on further developing the concepts and techniques – we should not expect massive adoption until future generations evolve.

The current generation of courses has proven the feasibility of massive online enrollments, but the Kolowich article reveals that the result is based on a form of adult continuing education. The majority of students in the Udacity and Coursera courses analyzed were professionals in the software industry – hardly the target audience for those seeking a change in how we educate postsecondary students. The current MOOCs provide a nice proof-of-concept, but hardly solve significant educational problems.

So what are the barriers that must be overcome for the MOOC concept (in future generations) to become self-sustaining? To me the most obvious barriers are:

  • Developing revenue models to make the concept self-sustaining;
  • Delivering valuable signifiers of completion such as credentials, badges or acceptance into accredited programs;
  • Providing an experience and perceived value that enables higher course completion rates (most today have less than 10% of registered students actually completing the course); and
  • Authenticating students in a manner to satisfy accrediting institutions or hiring companies that the student identify is actually known.

Given this short timeline and the nature of investment-backed educational experiments, I think the real focus should be on whether and how MOOCs or successor models build on current scalability and openness while overcoming these four barriers.

The University of Washington is not merely throwing courses online with Coursera, they are experimenting with changes that could lead to real credits, as reported in the New York Times.

So far, MOOCs have offered no credit, just a “statement of accomplishment” and a grade. But the University of Washington said it planned to offer credit for its Coursera offerings this fall, and other online ventures are also moving in that direction. David P. Szatmary, the university’s vice provost, said that to earn credit, students would probably have to pay a fee, do extra assignments and work with an instructor.

It is obviously too early to tell if this experiment at Washington will work, and indeed Steve Kolowich has another article clarifying that the MOOCs will not directly lead to credits, but the examples that attempt to tackle the four barriers of revenue, credentials, course completion rates, and student authentication will most likely determine the disruption potential and future of MOOCs.

Update 7/24: added link per Audrey’s comment to clarify that UW will not directly offer credit or be regular MOOC experience.

Update 7/27: Changed graphic to clarify creation dates of MIT OCW (2002) and Udemy (2010)

Update 8/15: Added CC license and DI logo to image to facilitate sharing

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About Phil Hill

Phil is a consultant and industry analyst covering the educational technology market primarily for higher education. He has written for e-Literate since Aug 2011. For a more complete biography, view his profile page.
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29 Responses to Four Barriers That MOOCs Must Overcome To Build a Sustainable Model

  1. A couple of quick thoughts:

    Steve Kolowich has another story about the UW plans for credits — definitely NOT going to be part of the regular MOOC experience (as in it’ll require offline components and students be enrolled at UW). See:

    Also: Is MITx really an outgrowth of MITOCW? I’m not convinced of that. MITx promises an open source platform, but the content isn’t OER; it’s a separate division on campus.

    And finally: cheating will be another obstacle (perhaps that’s included in your 4th point though)

  2. Phil Hill says:

    Thanks for note and linking to the additional article on UW from Steve Kolowich – I’ll update the post to include that reference as well. While the UW instance will not be part of the regular MOOC experience, that is an example of what I mean by potential successor models. It will be those examples that morph and build on current MOOCs that will be interesting to watch, IMO.

    I listed MITx as a dotted-line connection to MITOCW as the connection is not direct. I believe it is an outgrowth in terms of lessons learned and a desire to take the concept to the next level. I included that predecessor to attempt to show that the inspiration is not just from Stanford.

  3. MITx is an outgrow of MIT OCW.
    In 2001
    MIT started OCW program. They provided only learning material to teaching staff in general . FREE.
    I asked MIT in 2001 ” please include all your video lectures as well so that students can benefit from the learning of the subject matter. Make it an online learning. And charge some small fee. Even MIT cannot go on with donation in such an initiative. ”

    MIT said ” it is not our policy to charge for our services ”
    In 12 years MIT has gained 100.000.000 captive customers around the world because their policy.
    Also MIT learned the world market. Meanwhile MIT has learned a lot regarding online course development and online disseminating technology.

    MIT has a very much thought long term startegy regarding online . They have gone always at low profile not to disturp anybody .
    Now they are again very careful. They never say they will provide a degree. But they will when it fits to their long term strategy. They are extremely clever to plan a strategy.
    Unfortunately nobody talks about cost of online.
    Cost of online per person per course is nill if a school has millions of online students.
    In order to attract millions of students that online must be provided by TOP SCHOOLS of the world .
    MIT has realized this reality 1-2 years ago and decided on MITx. They have a vision.
    MIT had already 100,000,000 ccustomers around the world + They have the best of best accumulated wealth of knowledge + Brand name .
    They have seen they can access to 100.000.000 customers in the world , after joining with Harvard that estimate had been increased to 1 billion ( I believe that is the right number, although there are only 200,000,000 university age people in the world ) they decided MITx . It is wonderful to access 100,000,000 – 1 billion people in the world . Think about reputation in the world .
    That scale makes all business model very attractive. Think about it if MITx charges only $ 10 per course it can collect $ 1 to 10 billion in a year and every year after that .
    As I said cost is nill , less than $ 1 per course per person if students are millions and billions .
    MIT had acted with this vision, and also solved the whole HE problem of the world not only USA . So MITx has nothing to do with MOOC . MOOC term is an inferior term in the first place particularly when you say it is free.
    So :
    1.- MITx and Harvardx and now Berkeleyx has no problem of financing, it is a money making machine , useful to the whole world , therefore it is sustainable .
    It is most respected project of the world .
    2.- MITx provides certificate now , when the right time comes it will award a diploma as well. We, employers, accept even a certificate of MITx today. Be careful it is not a certificate of completion,it is a certificate of mastering a course after a very rigid exam .
    3.- There are softwares which identifies a person if he sits 5 minutes in front of a computer today. Reliebility is increasing every day .
    4.- MIT has the best online course development tools and techniques + internet online platform. Today’s online courses are 100 times better than 5
    years ago. Today better news from Berkeley as well.

    I have some other concern.
    Not everybody can absorb the difficult courses of MIT and Harvard. Therefore we need some courses with the 75-80 % load of the MIT courses for another 1 billion people . Any comment . Coursera has University of Illinois, Uni of Edinborogh . May be that is a good consortium as well .

    BUT MITx should complete their team with Stanford, Yale and Princeton after Berkeley.
    They do not need any more member .

  4. Sorry. I did not take seriously the idea of UW.

  5. Please do not take completions rates of these days.
    They are all experimental.
    Including me registered for only few lessons then dropped .
    Sure completion will be less than regular f2f courses but school does not lose anything from drop outs .
    There is no harm .

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  8. Rory McGreal says:

    The term MOOC may be new, but if you define a MOOC as 100s or 1000s of students. Athabasca University and other open universities has been doing this since the late 90s. They were not “connectivist” MOOCs. However they do fit the Wikipedia definition of a MOOC: “A massive open online course (MOOC) is a course where the participants are distributed and course materials also are dispersed across the web.” We have been linking to websites for quite a while now. So really I would see a third type of MOOC, which is more structured and possibly more akin to the non-connectivist type. The open u courses are generally open to anyone but they are not free of charge as the others seem to be. Is this the important distinction?

  9. Excellent post — in particular your succinct summary of the four barriers. I’d like to share how the OER university network ( is addressing these challenges. The OERu is a consortium of 18 accredited institutions from 5 continents. The OERu will provide free learning opportunities using courses based solely on OER learning materials with pathways to gain credible credentials. The network will be able to accredit OER learning in Africa, Asia, Europe, Oceania and North America.

    1) Sustainable revenue models: OERu anchor partners pay a nominal membership fee to the OER Foundation, a registered non-profit organisation. This covers the costs of shared infrastructure for delivering OERu courses for free. Each anchor partner agrees to assemble 2 courses from existing OER or donating an existing course under an open license. Recurrent costs for assessment and credentialing services are recovered on a fee for service model. Its smart model because partners do not need to invest new money — and operational costs will be covered. In some countries we anticipate government allocation or subsidy for this assessment only model.

    2) Valuable signifiers of completion. In the case of the OERu network, learners will acquire the same credentials as their on-campus counterparts in accordance with the national or local quality and accreditation requirements. Quality assurance is the foundation on which the OERu model is built and we will ensure parity of esteem between credits earned through the OERu model and local degrees. We anticipate awarding digital badges and certificates of completion – and these will be mapped to official university credits on the transcript.

    3) Completion rates: The sustainability of the OERu model is not predicated on completion rates. Learning will be provided for free irrespective of whether learners complete the course or not. Institutions will only incur cost when learners opt for formal assessment and credentialing. We recognize the value and contribution of informal learners in a system of open peer-learning support. Moreover, our mission is philanthropic — we aim to provide more affordable education to the estimated 98 million learners who will not have the privilege of a tertiary education. If our completion rate is only 1% — we helped one million learners.

    4) Authenticating learners: The majority of our partners have extensive experience in open distance learning and we have the infrastructure, policies and systems in place to manage student authentication within the requirements of local accreditation agencies.

    Our international innovation partnership is building a parallel learning universe to serve learners excluded from the formal sector. As an open collaboration — any accredited institution is free to join the network.

  10. Phil Hill says:

    Thanks for additional insights on MITx, Athabasca (what is it with those Canadians?), and OERu. One interesting theme among all 3 sets of comments is the global perspective. We in the U.S. tend to focus too much on our HE system, which makes sense to a degree based on institutional reputation and startup companies, but ignores the reality that much of online education innovation comes from other countries.

    I wouldn’t go so far as to claim that MIT has “solved the whole HE problem of the world not only USA”, but I do agree that they have long-term strategy in play.

    Wayne, thanks in particular for your insight on OERu against the proposed 4 barriers.

  11. Phil
    I am not the one to say ” our target is 1 billion students in the world ”
    That is what MIT and Harvard consortium said.
    I say there are only 200,000,000 university age people in the world.
    That means 1 billion target will cover the whole world. That means everybody can graduate from MIT and Harvard. What shall we do with those 1 billion MIT and harvard graduates.
    I cannot believe and I cannot comprehend also if +Harvardx can solve the whole
    HE problem of the world .

    First as I said not everybody can go to MIT, it has certain level of difficulty. So we will need another consortium like Coursera including Uni of Illinois + Uni of Edinborogh etc. less competitive schools .

    I do not really comprehende that only MITx plus Coursera will be enough for the world either. ( It can really be enough ) They will so disrupting the whole system. Millions jobless . Therefore many opponents will try and may be successful to harm MIT and Coursera initiatives.

  12. Wayne
    I have appreciated your work initially as you know that.
    But now there is MITx+Harvardx + Berkeleyx probably Stanford and Yale and Princeton. In this case who would go to OERu.
    MITx+ Harvardx + Berkley is a revolution.
    It will kill all other initiatives.
    Technology develops so fast .
    My only concern is MITx + Harvardx + Berkeleyx will generate many opponents.

  13. Rory
    MITx+Harvardx+Berkeleyx is not-for profit,
    but beautifully not free, therefore it is sustainable.
    Even it is a money making machine . Good for the providers.
    It is a win – win case . Everybody wins .
    Most important thing is to attract millions of students.
    Only TOP SCHOOLS Can do that .
    Everybody can pay a small fee of $ 10 .
    But that 10 times millions make a huge income .
    Since that money will be invested in education again the online provided will be better everyday .

    Up to now for profit online providers made the online education reputation very bad. Therefore TOP schools vedry hesitant to go online.
    Now they have much better development models and tools and believe they can attract millions they go online. But still very carefully .

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  15. The Helsinki university in Finland experimented with a Stanford-style MOOC last spring. Their programming 101 course promised anyone who passed with high grades nearly automatic admittance to the university, bypassing normal entrance exams. The course also awarded standard credits that a student in any university could claim. More information (in Finnish only, sorry – use Google Translate) at

  16. Phil Hill says:

    Muvaffak – we get that you see MIT / Harvard / Berkeley as the revolution. No need to repeat so often or use other comments as trigger to restate. I appreciate your opinions and insight, but keep within reasonable limits. Also, please don’t use comments to push a particular initiative. Keep comments as a discussion, not marketing.

    Tarmo – the Helsinki U MOOC is a fascinating example IMO, and it does attack a real academic problem. Offering entrance through MOOCs could add value to both prospective students and the institution, and it seems to allow a better academic measurement of a student. Great example.

  17. Phil Hill says:

    Poor timing on my part writing this post right before 2 days of heavy client work and travel – thus too light on comment moderation. However, I have deleted one comment that crossed the line into spam / marketing. There are other comments on the line, but hopefully we can keep the discussion going.

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  20. Kate Bowles says:

    I’m also a little sceptical that North American (or for that matter northern hemisphere) institutions will effectively solve the world’s higher education problems. Like most unequal cultural exchanges, there will be new problems caused, including the need to enable students around the world to gain an authentic understanding of standard curriculum as it applies in their own cultural context (let alone as it sounds in their own language).

    I don’t think we should resist open education initiatives on these grounds, and we can see that they are starting to emerge from different points of the world’s compass, which is great. But the issue continues to be scale and access to resources. Noticing small pockets of MOOC activity coming from other corners can make it all feel OK: look, the education market is open and free and fair. But the reality of the similarly-managed entertainment market is that the freedom of the most well resourced countries to produce higher quality content significantly reduces the opportunity of the less well resourced countries to contribute competitively. That’s why so many of the world’s entertainment content producers ask for some local protection against Hollywood, for example.

    So the question for me is that really basic one of global sustainability — how can MOOCs support the sustainability of content development right across the global educational market, so that we can all learn from each other, and not just all learn from the already powerful?

  21. Phil Hill says:

    Kate – excellent point. I think the answer is pretty clear that what you are looking for (MOOCs supporting sustainability of global content dev) will have to happen in the next generation, or at least after the hype stage. Current efforts are to leverage content from elite, or powerful, institutions.

    That being said, I think that Tarmo’s example from Helsinki is worth following. Maybe there’s more happening beneath the radar already.

  22. Interesting, thought-provoking discussion – two comments/questions:

    1) Completion Rates. Why is the completion rate a ‘problem’ in the context of MOOCs? If we are comparing a MOOC to traditional education for an enrolled student in a formal program – yes that may be a problem for the institution. But who is to say that students not ‘completing’ a MOOC course did not learn? Each student working through a MOOC has his or her own reasons for completing the course – who is to say that they did not achieve the objectives they established for themselves?

    In your post you are equating completion rate with learning – which is faulty thinking. MOOCs are a different way of learning – it is networked learning, constructing new knowledge from the experience within an organic network.

    2) Revenue Model for the connectivist MOOC: Why is revenue an issue or a potential barrier? There are people that organize these types of MOOCs for the sake of learning, to connect with other like minded learners that do so not with the intent of making money. There are no financial ‘investors’ expecting a ‘return’. The investors are the people within the network – investing time for a common purpose – learning for the sake of learning.

  23. Phil Hill says:

    Debbie, those are very good points. Keep in mind, though, that my main point in this post was to identify ‘barriers’ between current state and self-sustaining models, leading me to think that upcoming generations of MOOCs (or derivatives) could be self-sustaining.

    I do not consider low completion rates of current MOOCs to be a ‘problem’. However, I do not think that venture capitalists are in this for informal personal learning networks with no revenue models. The funding will go away if that is all that MOOCs become, thus not self-sustaining. It’s wonderful that people are learning and that there is value in current MOOCs, but I’m expecting the model to change as the experiment continues.

    While you make another good point that connectivist MOOCs do not have the return-on-investment challenge, I would argue that to become self-sustaining these models need to extend beyond a handful of north american innovators. Where is the adoption of the connectivist model by others? 5 – 10 people ‘investing time for a common purpose’ is not a self-sustaining model. Furthermore, I would also point out that some of the innovators themselves describe MOOCs as an experiment.

    Per George Siemens:

    “It is important to realize that MOOCs are not (yet) an answer to any particular problem. They are an open and ongoing experiment. They are an attempt to play with models of teaching and learning that are in synch with the spirit of the internet. As with any research project, it is unlikely that they will be adopted wholesale in traditional universities. Most likely, bits and pieces will be adopted into different teaching models.”

    Do you see adoption of the c-MOOC model outside of the original handful of innovators ? That is an honest question – I have not seen it yet.

  24. Hi Phil
    I agree with your points about identifying the real and potential barriers for the MOOC model which at some point will need to be self-sustaining models – though perhaps only for those MOOCs with financial backers – Coursera for example, which already has millions of dollars in investment capital. These investors are not in the game for the warm and fuzzies, they want a ROI as you said. Point taken that these barriers will need to be considered.

    However on the other hand, I still believe that there are MOOCs that will continue to operate, and flourish for purposes of self -improvement. The MOOCs of the constructivist strain, will continue as long as there are people interested in learning and building networks with other like-minded learners. I think of Wikipedia, with thousands of unpaid individuals contributing in areas of their expertise for no other purpose than to make a contribution.

    And to the point on completion rates – the model, or experiment, will need to evolve as you said, before we can pinpoint what metrics will satisfy the investors. Perhaps it may not be completion rates, perhaps it will be subscriptions, or perhaps those students who want to ‘test’ out of the subject. It is only when we have determined what we need to measure before we can focus on one barometer where there are other gauges (enrollment rates, satisfaction ratings, etc).

    Thank you for the thought-provoking post you provided, and thanks for taking the time to reply to my comment. This has been an enriching discussion. Debbie

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