Why MOOCs might point the way for profitable online business models

If you talk about Massive Open Online Courses or MOOCs to academics, or even if you read articles written around the subject, one question, actually a statement and a question, will inevitably come up: “Yes, but you can’t make any money from MOOCs so where is the business model?”

This is sometimes paraphrased as “Why would we give away what we do for free? Where is the business model?”.

The first relates to the likely longevity of companies like Coursera and Udacity. The second to the question of the participation of universities in producing content. These issues are often conflated into a general view that the MOOC phenomenon is really a passing fad and if everyone holds out long enough, it will go away.

But the recent past is littered with industries that thought this when their turn came to be disrupted by both the internet and the concept of “free”.

Take the CEO of music company HMV who said: “Downloadable music is just a fad and people will always want the atmosphere and experience of a music store rather than online shopping.”

Or HBO co-president Eric Kessler who said: “The move away from traditional television to an internet-based model is just a fad that will pass – a “temporary phenomenon” tied to the down economy”

Of course there are more examples like this. All from people who believed that somehow what they did was special and unique and anything that didn’t offer the full experience would never be as good and would be rejected as a “passing fad”.

What is overlooked with the industries that have been disrupted by the internet and “free” is that they were already ailing. The battles to modernise the way newspapers were produced preceded the internet and were being fought out in the late 80s in Wapping, UK.

And so it is with Higher Education, with academic Clay Shirky who has argued that MOOCs are an answer to a higher education system that is already failing in the US.

But let’s come back to the question of the business model of MOOCs for universities and the question of giving away something for free.

Chris Anderson, in his book Free: How Today’s Smartest Businesses Profit by Giving Something for Nothing, deals with the subject of the many companies and industries that have created businesses around the concept of giving something away for free.

Again, this pre-dates the internet, but it is also something that universities, in particular research universities have been doing for some time.

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