Regarding my recent post on UVa partnering with Coursera (“Yes, Hybrid Online Learning Delivers“), I came across this blog post by the dean of the Darden School of Business, Robert F. Bruner. The dean, who was instrumental in forging the technology partnership, sounds less than convinced that MOOCs (massively open online courses) represents the future of business school pedagogy. But he can’t let Darden miss a chance to stay at the leading edge of business education.
Writes Bruner: “This partnership is a relatively little bet that can help Darden understand whether and how purely online instruction can serve the interests of our students.” He doesn’t see online learning as a big money maker. Indeed, his question is, “Is this sustainable?”
“I don’t know,” he answers. “An important aim is to get some experience and then decide. In my previous blog post, I argued, ‘online is more likely to spawn losses for the traditional not-for-profit colleges and universities — this stems from the cost of creating digital content and reinventing programs.’ … I’ve been mugged by reality enough times on projects involving educational technology that I want to take a hard look at the resource requirements.”
Production of online courses is expensive, and the job is never done. Courses and materials need to be continually updated. A lot of trial-and-error will be required, and much of that effort will have to be written off. MOOCs are a winning proposition for Coursera, which doesn’t bear the expense and risk of creating content. The logic is very different for uUniversities, which will end up competing with one another and bearing the risk of failure. Writes Bruner:
Venture capitalists and other “smart money” are pouring into the online aggregators because higher ed looks like a replay of what happened in the music and filmed entertainment industries: disintermediate the incumbent distributors and gain rights to distribute the content that someone else paid to develop. … you don’t see venture capitalists or other ‘”smart money” pouring into colleges and universities mainly because they see only big outlays ahead to develop content. The “smart money” is voting with its feet: the flow of funds toward the online aggregators, to the neglect of universities is consistent with my argument that online ed will be costly to colleges and universities.
Bacon’s bottom line: Higher ed is conflicted. Prestigious institutions like Darden are more focused on the downside than the upside. They are getting involved for strategically defensive reasons: because they have to.
Bruner sees Darden’s rivals being other top-rated universities. But the competition won’t stop there. I disagree that venture capitalists will steer clear of content creation. At some point — whether a year from now or a decade — entrepreneurs will figure out how to get into the business, and some will succeed because they won’t lug around all the overhead that universities do. Content entrepreneurs will raid universities for their star teachers (not necessarily the biggest names, but the most popular teachers), leverage their teaching power a hundred-fold through MOOCs and pay them more than they could ever make in a university.
These interlopers will offer a threefold value proposition: (1) access to the best teachers, (2) at a lower price than traditional institutions can offer, and (3) certification that students have mastered the subject matter.
If I were running an institution trying to maintain $20,000- to $50,000-a-year tuition-and-fee cost structures, I would be very worried. With its brand name, endowment and roster of star faculty, of course, Darden should fare better than generic state universities. At least it will be producing the courses most in demand — until their faculty are spirited away, at least. And its highly interactive, case-study pedagogy will be far more difficult to replicate online than standard introductory courses are. Even so, the pressure will be relentless.