Exploring the current dynamics of OPM and UK university partnerships
Photo by Jose Silva from Burst
Partnerships between UK higher education institutions (HEIs) and private companies are a significant component of the online distance learning landscape. It is impossible to properly and comprehensively consider this landscape without including private companies and their relationships with UK HEIs.
If you are unfamiliar with the landscape, it may be interesting or confusing to consider that HEIs, whose core activity is offering programmes of study, might need external help to do so. At first glance, these relationships may seem odd.
However, while online distance education shares similarities with other modes of teaching and learning, there are also significant differences. In general terms, most UK HEIs have been primarily set up and have a long legacy of providing higher education to undergraduate students who come to their campuses.
As of 2021/22, undergraduate students made up over 70% of students at UK HEIs, and over 50% of these undergraduate students were aged 20 or under. This, however, is not currently or historically the core audience for online distance education, who in general are older and balancing commitments that make relocation or full or part-time campus-based education prohibitive and undesirable.
Reaching and effectively catering to a different audience is a key challenge for HEIs when it comes to online distance education. This challenge is compounded by the contrast between this audience and the core undergraduate on-campus audience, alongside a long legacy of always having a supply of applicants from which to recruit.
Wrapped up in reaching this core audience are UCAS applications and milestones, open days, prospectuses, student accommodation, the student union, societies, buildings, facilities, and "selling" the place, town, city, or area where students will live. Having a legacy of a perpetual funnel of applicants primarily from post-secondary education, which constitutes your core audience and educational activity, also inevitably leads to the development of systems, processes, and ingrained institutional mentality centred on this audience and the way in which they are reached and served.
This is one overarching reason why reaching an online distance learning applicant demographic and effectively catering to them by offering a different type of educational experience is such a challenge for many UK HEIs. Essentially, it goes against the grain in so many different ways that to do it successfully often requires significant change, the development of new capabilities and mindsets, and investment.
At one level, for some, the choice really comes down to whether they want to make online distance education a perpetual, business-as-usual part of their operations and whether they are willing to invest the necessary effort and resources.
Partnering is not entirely antithetical to this goal, and there is more nuance to this area than a simple in-house versus partnering dichotomy. However, I am yet to see enough convincing evidence to suggest that partnering ultimately leads to the development of institutional capability and maturity to operate independently.
While this is a relatively basic and somewhat singular framing of the choice to partner with an online programme management (OPM) company or online education company, it highlights why many UK HEIs have chosen to enter into partnerships over the last 10 years and more, rather than take a different route.
The reality of the growth in partnerships
As I mentioned at the outset, partnerships are a fundamental and growing feature of online distance education in UK higher education. This area is often clouded by beliefs, desires, and the narratives of those fundamentally and ideologically opposed to these types of relationships.
For example, during the pandemic, some expressed the opinion that the pandemic had fundamentally broken the OPM model, believing that HEIs could deliver programmes online themselves, making the idea of giving up 50% of revenue to a company absurd.
While I understand the reasoning behind this opinion, I have yet to see any evidence to corroborate it. This view presents a common misconceived line of thought that stems from a lack of appreciation of the capabilities needed to deliver online distance education successfully while at the same time pointing an incredibly favourable mirror in the direction of HEIs.
Irrespective of opinions and narratives in this realm, one simple demonstrable fact remains: the number of partnerships between UK HEIs and OPMs and other online education companies has continued to grow year-on-year since the 2010s. I have yet to see any evidence of this appetite abating, and the number of partnerships already seen in 2024, as well as those anticipated by the end of the year, will be consistent with or greater than the preceding years.
The biggest change during this period is not in the appetite for partnerships but in the companies and models themselves. This has made it somewhat more difficult to analyse this space and demarcate companies and partnerships.
The company ecosystem offers partnerships that support a range of course products, from degrees to short courses, and a range of types of partnerships, from the full-service end-to-end models most commonly associated with online programme management (OPM) companies to discrete services.
However, if we look primarily at longer-term partnerships centred on online degree programmes that involve at least one significant service component (e.g. sales and recruitment) or a broader suite of services, there have been, on average, five new partnerships within this category every year since 2018.
Given this calculation is based on the partnerships already announced in 2024 and the fact that there are at least five potential partnerships to be announced later this year, this average is set to increase.
Exploring the company players and developments
There are a range of companies operating in this space, differentiated by the services they offer and the number of partnerships they have, among other things.
The two companies that have built the most OPM-style partnerships with UK HEIs in recent years are Higher Ed Partners (HEP) and CEG Digital. HEP now has over 10 partnerships, and although the first part of this year has not seen any new partnerships, I expect to see some new ones in the second half of the year. These will further establish HEP as the leading company in terms of the number of UK HEI partnerships.
CEG Digital, while announcing partnerships with the University of Reading and King’s College London over the past 12 months, has also seen some partnerships come to an end and now has less than 10 partnerships.
Outside of these two companies, there is a cluster of companies that currently have fewer than five similar types of partnerships. These include FutureLearn, 2U, OES, Kaplan Open Learning, Coursera, and Skilled Education, as well as Boundless Learning and Risepoint, which are the companies that Pearson and Wiley’s former OPM arms have now become following mergers and acquisitions. Arguably, the most successful in terms of growing partnerships in the last six months has been the US OPM 2U, which has come as somewhat of a surprise given their recent challenges.
All of these companies have the potential to grow their number of partnerships in the next 12 months, given the demand that still exists. However, some still need to regroup and recalibrate following significant changes, and some may struggle to move from early success to sustained growth into significant players.
Evolution, but revenue share is alive
One of the most interesting developments in the last six months has been the growth in the number of online degrees from UK HEIs listed on FutureLearn. Both new partners and existing partners have taken advantage of the ability to advertise their online degrees on the platform, even though they are not offered through the platform.
The UK HEIs taking advantage of this opportunity include those partnered with FutureLearn on a traditional OPM basis. This represents a slight evolution in the types of partnerships available, made possible by the melding of OPM and online education platform companies.
Although this is a development in terms of the types of partnership deals, and despite the frequent discussions about the end of the revenue share model for OPM partnerships, nothing in the last six months suggests that the revenue share model is on its way out in the UK yet.
Summing up
The last six months have seen a continued increase in the number of UK HEIs seeking to seriously enter the online distance education market. While there are various paths to take, it is clear that many UK HEIs are continuing to form partnerships with OPMs and other online education companies.
Despite the instability in the company space, the rate at which new partnerships are being established year-on-year remains stable and significant. It’s clear that challenges will persist as this growth further saturates certain subject areas, and while online student numbers have been growing, the pie is unlikely to be large enough to ensure all are well fed, if I can put it like that.
As well as the challenge of capturing market share, the company dynamic continues to be one in which there is often year-on-year income growth but no significant signs that some companies are getting closer to genuine profitability and several continue to be underwritten by their parent companies.
However, we can expect to see more partnerships due to the financial and other motivations driving a steady stream of UK HEIs to enter the online education market.
We are still in a phase of increasing market entries from UK HEIs and dynamism in the space. Ultimately, what has been and continues to be seen points to substantial transformation of the online distance education landscape in the coming years, bringing both opportunities and challenges for UK HEIs and their partners.
