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HIGHER EDUCATION | OPINION | 39 Read a related story: click here What’s the future of MOOCs?
David Smith, director at Simon-Kucher & Partners explains why success of massive open online courses (MOOCs) centres on finding a business model that works
R
ecently many UK universities have begun offering MOOCs. For the most part, these have been offered
free of charge, but it is not entirely clear whether this represents a sustainable business model. Pricing digital content is a hot topic across a range of sectors at the moment, the commonality being that once an industry has 'gone free' it’s often hard to go back. Indeed universities can learn a lot from
other digital businesses such as social networks and online newspapers. From my experience working both in HE and with numerous media/online business, I would propose the following five strategies:
✥ Maintaining a free 'front page' will be critical to give potential students the opportunity to sample the product. This is particularly important for new/innovative products where the value proposition is unclear at first.
✥ …hence a freemium model is most likely the best bet. The key for universities is to think creatively about what they could potentially charge for and how this fits with what potential students would be willing to pay for.
✥ The price model universities use will be at least as (if not more) important than the price level. In other words, the way universities charge – be it per course, for a monthly pass, for accreditation, for access to extra features – will most likely be more important than the amount they charge.
✥ Universities should be creative when considering potential price models. It doesn’t just have to be a price per course. You could charge for access to a range of content or 'membership.' The price model should encompass the university's entire digital offering, not just MOOCs.
✥ It is essential that universities begin capturing data from their users. This is key for online businesses, as you will likely want to up-sell/cross-sell to them at some point. World-class digital businesses know who their customers are, what they’re looking at, and can contact them. Ultimately
David Smith
“It is essential that universities begin capturing data from their users”
universities need a clear migration path for their users, from free to paying for something… to ultimately enrolling on a full- time course. ET
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