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among the four biggies, privately-owned Coursera generated about $140 million in 2018; Udacity earned $90 million for the year; edX took in about $57 million for fiscal year 2017; and UK-based FutureLearn made about £8.2 million (roughly $10.7 million).
Recently, Shah shared his perspective with Campus Technology on MOOCs and money.
Campus Technology: It seems like every MOOC is generating income for somebody.
Dhawal Shah: It varies widely. You can con- sider revenue at three different levels: provid- er, institution or instructor. Institutions have more courses, so they have more opportuni- ties to make money. If a university launches 100 [MOOC] courses, not all of them will be lucrative. But a few good ones in the right field can be very lucrative, making up for the costs of the other ones. So even if just a few courses become really big, it’s okay. The rest can act as a marketing channel for these big ones. Also, I think for certain universities, they make money indirectly, not directly, from the courses, by getting their brand across the entire world. That has some additional benefits, which sometimes can be really hard to quantify.
Some courses are more monetizable than others. The professional education courses are more monetizable, even if they have lower audiences. Take something like “Learning How to Learn,” which has had something like 2 mil- lion students take it. I love that course — it’s my favorite course. But I don’t expect the monetization to be that strong because it’s a course that you don’t need a certificate for.
Whereas Udacity, which doesn’t have that much content, does have a focus on profes- sional education and things that monetize well, like the “Self-Driving Car” nanodegree. I think that had 10,000 paid students enrolled in it for the first semester, which was $800. (The full nanodegree is a year-long, $2,400
program.) So that sole semester could poten- tially have generated $8 million.
In these courses coding is definitely a big thing. There’s a huge market for data science and AI. I think they monetize well because they target people who already might have developer jobs, so they might be able to afford these courses. And the benefit is pretty obvi- ous [to the learner] if you end up having one of these skills. Business is also [a big subject area]. There might be some outliers that are not in any of these categories, but generally business and technology are the big drivers for professional education courses.
CT: Coursera is the top dog here in terms of revenue. The next highest level one is Udacity. Why have those two companies seen so much success?
Shah: They’re [venture-capital] funded, and they do focus on revenues. They have been very aggressive about monetization. They are constantly making changes to their models to monetize effectively. They try to target con- tent that monetizes well.
In the case of Coursera, they made it so that courses are always open to register. Instead of being delivered once or twice a year, you can join at any time; you can upgrade [to a verified certificate option] at any time. That really helps with monetization and the conversion rate.
With Udacity, specifically, they have done a great job of monetizing their nanodegrees. They’ve also set up many partnerships around scholarships they have to offer in certain countries.
CT: And then there’s edX, which has less than half the revenue of Coursera.
Shah: Part of the revenue is the contributions or donations from the universities. So with edX, not all of it is direct revenues generated from students or companies.
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