Years ago, a friend of mine sold his company to a national telecommunication company. With time on his hands, and being a serial entrepreneur, he set out on his next project.
Watching his two children come home every night with overstuffed backpacks full of books, he decided his next venture would be to lighten their load. With a track record of technology innovations, he developed an e-reader years before the iPad and Kindle. The reader had an interactive notepad on one side and the e-reader on the other side. He provided much of the funding and line up production in South Korea and China.
Next, he would need the education system to play along. And that’s where the story ends. He preached of the value of democratizing education to school systems, locally and nationally. The opportunity to generate new revenue streams by promoting college professors, courses and information beyond the classroom to the reach of every student with Internet access.
But the old guard was too wedded to their legacy business models, and their traditional thinking of a “campus education” and as a result, they never got on board.
That was until now. Massive Open Online Courses or MOOCs are changing the mindset of some of the most prestigious colleges in the U.S. Leading universities like Harvard, MIT and Johns Hopkins are now putting some of their marque courses online -- many of them for free.
MOOC platform providers like Coursera, edX and Udacity believe higher education is a basic human right and have seen a surge in interest. Coursera now has more than 1.7 million registered students. Brian Caffo, a professor at Johns Hopkins University, teaches what he calls a “math biostatistics boot camp” that usually draws a few dozen graduate students. (15,000 students from around the world signed up for the free online course.)
Bringing higher education to the masses also comes with paradigm-shifting challenges. It has the potential of redefining the value of a “campus education” and to disrupt the traditional business model.
Nick Anderson of TheWashington Post suggests that MOOC platforms pose a key question for universities: “Are they undercutting time-tested financial models that rely on students willing to pay a high price for a degree from a prestigious institution…or are they accelerating the onset of a democratized, globalized version of higher education?”
Burck Smith likens it to the challenge newspapers faced when they first launched Web sites. Smith, the CEO of StraighterLine, which sells low-cost online courses, says: “Free content has never really been a successful business model.”
Perhaps Mr. Smith is wrong. With two kids not far from college, I’d like to suggest that theirs could be a new business model built on free content: advertising.
In this new world, universities become, in a sense, content houses -- similar to publishers. By making the best universities, courses and professors available to the masses, the opportunity to draw huge audiences and to build brands worldwide is created.
For example, the eight courses made available by Johns Hopkins have drawn more than 170,000 students from around the world. Where there are highly engaged and defined eyeballs, there are advertisers wanting to gain access, especially given the fact that courses are available in multiple formats and devices.
Although this “revolution” is in its early stages, it has the potential to redefine the college experience, education and business model. As the story of my friend attests, the industry is slow to change, but with cost of an average public college education at $27,435, “free” sounds pretty good to me.