What does a turbulent present mean for the future of online education?
It’s been a pretty significant period in the world of online education with a whole raft of negative headlines emanating from a number of notable online education companies that partner with universities.
In early August, Coursera announced a drop in online degree revenues that were attributed to
“lower-than-expected student enrollments, particularly in mature U.S. and European degree programs where our revenue is concentrated today.”
..and in late July FutureLearn’s accounts made clear that
“the group does not currently have sufficient funding in place for its requirements for 12 months from the date of signing the financial statements of the Group for the year ended 31 July 2021.”
and
“there remains a material uncertainty which may cast significant doubt about the groups ability to continue as a going concern”
But it doesn’t stop there - three of the largest online programme management companies (OPMs) - 2U, Pearson and Wiley all announced less than positive news.
2U announced at the end of July that their online degree programme revenue had decreased by 2% and that they would significantly realign their operation and there would be layoffs of staff as a consequence.
Pearson announced it was losing a significant client in Arizona State University next year which reportedly represents one third of the revenue it receives for the online programme management arm of its business -
…and lastly Wiley announced that it’s OPM business
“saw decreasing revenue year-over-year based on an 8% drop in online enrollment”
Whilst all of these announcements focus around growth and profitability of private companies working in online education - what transcends all of this news is the demand and supply for online education and a changing overall landscape.
The recent context of online education
It’s interesting that this news follows what has been an unprecedented time when online distance education, or at least a form of it has been heavily in the spotlight. Being as it was, pretty much the wholesale model of education for universities throughout all the lockdowns and restrictions.
Some have talked about this period as an experiment for higher education and whilst in many ways this kind of narrative suggests a historical myopia about online distance education - universities have now experienced running all of their courses, undergraduate and postgraduate, and the whole dichotomy of disciplines on offer as a form of online education, albeit a very unique one.
The major events of the last few years have punctuated the trajectory of higher education in a significant way and led to much speculation about what this will or should mean for the future of how we teach and study.
But there’s a few elements to this discussion, the first one is - what this will or should mean for the experience that so many people picture when they think about university - an on-campus, residential form of undergraduate study for recent school leavers. The main areas of discussion here have been how these programmes can be imbued with more flexibility both in terms of attendance commitments and expectations as well as other aspects of the experience.
The second element, which is a much quieter area of discussion - is focussed on online distance programmes and courses with no campus attendance commitment and no residential component.
As I’ve highlighted recently, there are more UK universities than ever before that are getting serious about this component of their portfolio. For some this is just a continuation of thinking and work that began before the pandemic, but for others it’s really moved up the list as a consequence.
Because of all that’s happened in the last few years - at times there’s been a confusion and conflating of online distance education and the online part of a blended learning model applied to residential, on-campus experiences. In some senses this is a continuation of people talking over online distance education in universities as they narrowly focus on just one, albeit major part of it.
But I think it’s worth saying clearly that we are not seeing a UK-wide, radical transformation of the on-campus, residential undergraduate education model into an online distance learning one, and in a lot of cases we’re not even seeing a middle course that relies more significantly on online technologies.
One could argue that a bigger impact of the pandemic has been universities growing more serious about online distance education as an area of growth and development for their portfolio than online technologies significantly altering the core undergraduate teaching and study experience.
So given that context - the news I highlighted earlier - being that it is much more related to online distance education - becomes more pertinent to universities looking to grow what they are doing in online education.
The changing landscape of online learning
As I implied earlier this news is not just related to mechanics of particular companies but a reflection of the wider online distance learning landscape.
This is a landscape that has seen lots of growth in the number of opportunities to study online. In higher education this has been manifested in a spectrum of courses from mostly-free short courses right up to longer courses such as undergraduate and postgraduate degrees courses. These are either offered solely by universities or in partnership with online education companies.
Although not of prime concern here, it’s also worth noting that the growth of the number of online courses and associated platforms and providers outside of the higher education ecosystem has been significant too.
There are a number of online course marketplaces like SkillShare, Learning with Experts, Udemy, Pluralsight, Maven, Masterclass, LinkedIn Learning, and a whole range of platforms that enable individuals or small businesses to create courses like Kajabi, Learnworlds, Teachable and Thinkific.
There are now so many more online courses both within and outside the HE ecosystem vying for people's attention. Or to put it another way, a much greater supply of online learning opportunities.
Although this is stating the obvious, it’s a really crucial point that too few UK universities, education providers and anyone looking to create online distance portfolios fully realise and dwell upon.
There’s a lingering naivety that because online distance education has been a peripheral or non-existent part of the educational past - that it is an undiscovered promise land of an educational future. Many need a wake-up call on this.
Chan Kim & Renée Mauborgne came up with two terms to help define this dichotomy - red ocean and blue ocean. To put it simply, blue ocean refers to an unknown, uncontested market with little to no competition full of opportunity and growth. Whereas red ocean refers to an existing market space with competition and where there are shares of the market.
Too many are seduced into thinking that online distance education is more of a blue ocean than a red ocean, and alongside that some eyes have grown too wide at the size of those oceans particularly given the events of recent years. We need a bit of a reset on this and we need a greater consciousness of where we are currently at in terms of online distance education.
This is true of the whole spectrum of course offerings in online education from short courses through to degrees.
The changing online short course space
In terms of short courses, a lot of universities offer online courses via MOOC platform partnerships. However, these platforms have evolved a lot and the size of their MOOC portfolios have grown significantly.
Whilst these platforms began life offering mass open and free courses - we are now miles and miles away from that. The proliferation of MOOCs, combined with the need for these companies to be financially sustainable and the moves into microcredentials, degrees and B2B offerings has changed things.
Universities that are simply offering MOOCs via these partnerships are essentially now co-opted into a platform in which the main commercial value of offering MOOCs is either as part of a long-tail platform strategy or part of the early stage of a sales funnel.
For those universities genuinely interested or seeking to achieve scale for the purposes of access, reputation, brand awareness, research or dissemination this should give cause to rethink things. The M in MOOC is becoming increasingly redundant except for the smaller number of courses that really cut through and result in a steady stream of enrolments in the tens of thousands.
I’ve seen MOOCs that get fewer than 30 enrolments which makes a mockery of the idea of Mass. This matters for universities because some still have the idea that if they create a MOOC on a well known platform it will automatically generate thousands of enrolments.
It can be hard to deduce this from the outside as some MOOC platforms use ambiguous ways of presenting the number of learners on a given course. Some use a cumulative figure of people enrolled on courses over lots of different runs and in some cases many, many years.
Unfortunately, it's no longer the case that all MOOCs attract thousands or even hundreds of people, and if numbers are a significant part of your main aim or what you value - then the choice of course topic along with efforts to promote it will be critical to achieving that.
Ultimately, universities need to consider whether offering short courses on a platform geared up around a long tail of courses helps them achieve their aims, and whether the benefits really outweigh the cost.
In financial terms, a MOOC portfolio is unlikely to bring any return on investment and generating income from those courses on MOOC platforms increasingly looks a bit like getting involved in a Multi-level Marketing scheme.
For universities that were involved in the early days of MOOC platforms the idea that the platform itself no longer deliberately markets their courses in quite the same way as it did in the early days and you now get out what you put in - has been jarring.
Marketing of MOOCs now is really simply about existing on a large online marketplace, and unless that course is generating a large number of enrolments or is related to a particular sales funnel - it’s likely to exist at the proverbial end rather than the gondola end of the platform.
All of this doesn’t necessarily mean that universities shouldn’t partner with MOOC platforms, but it arguably squeezes down the breadth of strategic alignment such partnerships support to the commercial. There are also now different commercial avenues to explore when it comes to short online courses.
A raft of companies such Emeritus, GetSmarter, Esme Learning, Skilled Education, FourthRev exist whose partnerships with universities tend to focus on shorter courses all of which are paid-for-access at higher prices than the average course upgrade cost on a MOOC platform.
One of these companies GetSmarter is owned by 2U and their short courses are already front and centre on the edX platform. In one sense, this encompasses both trends - a move towards and greater spotlighting of commercially valuable courses from MOOC platforms and an emerging market of short paid-for online courses rather than free ones.
The changing online degree space
In terms of the online degrees there are many more online degrees to choose from, with the overwhelming majority being at postgraduate level.
I’ve spoken in previous posts about the rapid growth of partnerships between UK universities and online programme management companies with over 25 of the 40 or so that exist being instigated in the past 4 years.
The sheer growth in these partnerships has obviously increased the number of online degrees that are available, but that growth doesn’t equate to a breadth of different subjects being available. These partnerships tend to result in programmes in key verticals such as business and management, digital, healthcare.
So whilst we’ve seen a growth in the avenues to study online, we’ve not necessarily seen a growth in the breadth of subjects available to study online. Obviously that’s demand or perceived demand driven. But it leads you to question how many more online MBAs, or Computer Science degrees or Public Health degrees are sustainable.
Allied to this is the wider context - online degrees have tended to be at postgraduate level and undertaken by those who are in work or have other commitments. Given the big squeeze people are experiencing financially, it is inevitable that those considering further study might not feel they can make the financial commitment.
Similarly, employers who are riding out financial storms may not have the budgets to support staff to undertake degree programmes and I have certainly heard people within universities highlight that some employers aren’t supporting their staff to take long, costly degree programmes as much anymore.
Although anecdotal, I have also heard from various universities and providers that they have seen a dip in online degree enrolments and this undoubtedly attributable to some if not all of these factors.
Taking this forward
The greater supply of online courses and programmes makes for a very different landscape than even 4 or 5 years ago. It will mean that the swathe of UK universities now thinking and acting more strategically in terms of online distance portfolios, will be entering a changing and more competitive space.
The extent to which the online postgraduate degree space in particular can tolerate more and more of the same is open to debate and many of the old orthodoxies of online distance education and private partnerships are likely to be increasingly up for debate and challenge.
This has surfaced much more significantly and prominently in the US where so much of the commentary on OPMs and online education originates from. In the UK we should be careful not to over-extrapolate to our context, and appreciate the differences in contexts between our two countries.
But as the US is arguably more mature when it comes to the relative size of the online distance education space, we might learn from the position they find themselves in terms of the sheer numbers of online degrees offered by universities. For example, there are over 350 online MBAs offered there now.
Given figures like this and the news that, to an extent, precipitated this article, UK universities would be wise to consider where their place will be both now and in the future in light of the growing number of universities seriously developing online distance education portfolios.
In a similar vein those universities that consider themselves to be established in this space will need to consider how they can continue to develop and improve what they’re doing.
There are examples of prominent UK universities who boast large online distance portfolios that provide the kind of overall student experience that falls woefully short of the best providers in this space.
One would hope that more competition might spur those to fully live up to their reputation and other universities that already offer online distance education would recalibrate how they support it such that it represents an experience that has parity in both esteem, resourcing and thinking as other modes of study.
In so many ways successfully running online distance courses and programmes is a world away from the ecosystem and thinking that’s wrapped up with undergraduate, campus-based, residential education.
This is something all universities need to be conscious of, but especially universities starting to embark on this journey. They will need to be much more savvy and forward looking if they want to develop something that is both successful and perhaps most importantly, sustainable in the long term.
Any universities that pursue these moves with a wet by the ears optimism that simply apes the idiom may find that their high hopes are crashed on the shore of a red ocean.
