1. Revenue vs. Costs of MOOC platforms.
Discussion of business models for xMOOC providers, based on empirical findings and experiences during implementing the project iMooX.

2. Who is presenting? (authors in alphabetical order)
Stefan Dreisiebner, University of Graz (Austria)
Assoc. Prof. PhD Martin Ebner, Graz University of Technology (Austria)
Helge Fischer PhD, Dresden University of Technology (Germany)
Oliver Franken, Dresden University of Technology (Germany)
Prof. PhD Thomas Köhler, Dresden University of Technology (Germany)
Michael Kopp PhD, University of Graz (Austria)

3. Content MOOCs in Higher Education
Business Activities of MOOC Providers
Costs of MOOCs – Practical Experiences from iMooX
Discussion – MOOCs in Practice

4. Exkurs: Begriffsklärung & Berührungspunkte
(Quelle:
Exkurs: Begriffsklärung & Berührungspunkte
Unterscheidung von cMOOCs und xMOOCs
Massive …Keine Beschränkung der Teilnehmeranzahl
Open 1 …Keine Vorgabe von Zugangsvoraussetzungen
2 …Keine Erhebung von Teilnahmegebühren
Online …Keine „präsenzbasierten“ Lernphasen
Course …Curriculum, Videosequenzen, Literatur, Tests, Foren
Konzept im Wandel (z. B. blended/kostenpflichtige MOOCs, SPOCs)
(Quelle: Schulmeister 2013)
Im Folgenden geht es um xMOOCs
Revenue vs. Costs of MOOC platforms

5. Why MOOCs in Higher Education?
But,
What about the costs of xMOOCs?
How can xMOOC-platforms operate sustainably?
Attraction of high potential students
Promotion of professors
Free access to education
Advertising of educational programs
Image effects for academic institutions
Transperancy in Higher Education
Increasing quality of teaching
Etc.
 Many hopes, wishes and expectations!

6. 1. MOOCs in Higher Education
Research Strategy
Identification and characterization of business activities of established xMOOC providers
Identification of cost factors based on practical experiences during implementation of the xMOOC platform iMooX
Derivation of recommendations for the operation of xMOOCs in Higher Education

7. Content MOOCs in Higher Education
Business Activities of MOOC Providers
Costs of MOOCs – Practical Experiences from iMooX
Discussion – MOOCs in Practice

8. Business activities of xMOOC providers
2. Business Activities of MOOC Providers
Business activities of xMOOC providers
Sample:
Coursera, ( USA
edX, ( USA
Udacity,( USA
Iversity, ( Germany
Study:
How? – content analysis (Mayring, 2002)
What? – editorial documents (e.g. from online portals), scientific papers, and reports by the selected MOOC providers
When? – February to April 2014

9. 2. Business Activities of MOOC Providers
Product combinations
What products are offered for which customer group?
Findings:
quantity of MOOCs
Coursera: 744
edX: 294
Udacity and iversity: >50
MOOCs vs. study programs
MOOCs are sold individually and lead to certificates,
connection of individual MOOCs to complex certificate programs, e.g. Coursera, Udacity and edX
provision of MOOC-based master programs, e.g. Udacity

10. 2. Business Activities of MOOC Providers
Financing
How are MOOCs on Coursera, edX, Udacity and iversity refinanced?
Findings:
establishing of the business with equity and/or venture capital
revenue sources:
chargeable MOOCs (e.g. on the Platform Udacity the participation in selected MOOCs costs between $150 and $200 USD per month)
free MOOCs with chargeable additional services, e.g. iversity offers certificates with grades (€49 - €99) and/or with ECTS (€129 - €149)
contributions from sponsors or advertising revenue
fees for the creation and deployment of MOOCs

11. 2. Business Activities of MOOC Providers
Value added processes
Which institutions are involved in the planning, production, implementation and certification of MOOCs?
Findings:
for the MOOC production the platform providers cooperate with universities as well as with companies
cooperation partners deliver content and get additional support in the manufacturing process
certification is done by the providers themselves (e.g. Coursera) and/or by cooperation partners such as universities and companies (e.g. iversity).

12. Market positioning Which strategy leads to a good market position?
2. Business Activities of MOOC Providers
Market positioning
Which strategy leads to a good market position?
Findings:
establishing as a mass provider (e.g. Coursera)
niche strategies:
Udacity focuses on the IT market
regional extension to other market segments (e.g. edX focusses on Arabic market via
provision of tailored business trainings by Udacity
establishing of MOOCs in regular academic teaching (e.g. iversity)

13. Content MOOCs in Higher Education
Business Activities of MOOC Providers
Costs of MOOCs – Practical Experiences from iMooX
Discussion – MOOCs in Practice

14. The Project iMooX (www.imoox.at)
3. Costs of MOOCs
The Project iMooX (

15. 3. Costs of MOOCs
Project details
iMooX is a publicly founded project with the idea to bring open online courses to a public audience
initiated by the University of Graz and Graz University of Technology
target group: pupil as well as elderly people
Status Quo of iMooX
3000 registered users
10 courses
each course bases on standard creative commons licenses (CC)
xMOOCs contain mainly quizzes, videos and forums

16. 3. Costs of MOOCs
Cost Model
Based on the experiences during implementation of iMooX costs of production and provision of xMOOCs could evaluated
The cost model bases on following assumptions:
working on one course unit requires about 12 hours
for one minute video about 3.5 hours work are estimated
for the post-production the amount of work is about 1.5h per video
upload of course content to the platform takes about 3.5h per unit
pedagogical supervision will take about 15h for one course
technical assurance is about 10h per course
The estimations (in hours) are taken from our experiences of the first three MOOCs at iMooX in spring 2014.

17. Cost Model in detail 3. Costs of MOOCs
own MOOCs – variable costs for each course unit
concept of the course content (€ x 12 h) €
video production (2 Videos à 6 min; € x 20 h x 2) €
post-video production (2 Videos; € x 1.5 h x 2) €
upload of content to the platform (€ x 3.5 h) €
in total
€ ,349.17
own MOOCs - variable costs for each course
pedagogical supervision and quality assurance (€ x 15 h) €
technical assurance and operational test (€ x 10 h) € €
teaching and Supervision - variable costs for each course unit
lecturer (€ x 5 h) €
teaching Assistant (Supervision of discussion forum; € x 5 h) € €
current cost – one-time costs per year
platform and project management, marketing (€ x 56 x 6 h)
€ ,337.70
on-going platform development (€ x 56 x 40h)
€ ,560.35
support – user questions (€ x 56 x 1h) €
marketing – tangible means
€ ,000.00
€ ,749.38
infrastructure costs – One-time costs per year
vCPU, RAM and HDD €
electricity €
staff € €

18. 3. Costs of MOOCs
Hosting of MOOCs
A possibility of covering the overhead costs of running a MOOC platform is a fee for hosting the content (see next slide).
Assumptions:
80% of the courses on the platform will be provided by non-profit institutions
20% of the courses on the platform will be provided by commercial institutions
the fee charged by commercial institutions is 250% higher than the fee charged from non-profit institutions
a marketing cooperation provides a fixed yearly income of 7,000 €

19. Fees for hosting of MOOCs (4 Cases)
3. Costs of MOOCs
Fees for hosting of MOOCs (4 Cases)
case 1 (basis case): 10 external MOOCs
essential fee per year and course
8 courses of non-profit institutions
€ ,883.99
2 courses of commercial institutions
€ ,709.98
case 2: 20 external MOOCs
16 courses of non-profit institutions
€ ,942.00
4 courses of commercial institutions
€ ,854.99
case 3: 30 external MOOCs
24 courses of non-profit institutions
€ ,294.66
6 courses of commercial institutions
€ ,236.66
case 4: Reducing labor costs of programmer
cost savings
-€ ,533.69
in this case essential fee per year in case of 10 external MOOCs:
€ ,842.94
€ ,607.35

20. Content MOOCs in Higher Education
Business Activities of MOOC Providers
Costs of MOOCs – Practical Experiences from iMooX
Discussion – MOOCs in Practice

21. How can MOOC-platforms operate sustainably? Some ideas!
So what?
How can MOOC-platforms operate sustainably? Some ideas!

22. 4. Discussion
Lessons Learned I
financing only by fees for hosting seems to be unrealistic
one additional source of financing could be public funding, e.g. by providing the technical infrastructure and staff
MOOCs might be funded by universities themselves, because
marketing effects
reduction of drop-out rate
professors might produce MOOCs by themselves, because
accessibility to high-quality higher education
improvement of public prominence

23. 4. Discussion
Lessons Learned II
the corporate training market as possible source of income
Udacity has lately focused its business model on this segment
rapid growth in the corporate training market (worldwide)
alternative sources of income
selling of certificates or credits
bonus for referred buyers in e-commerce (e.g. amazon partnership program of coursera)
reports of the courses about learners’ performance for trainers, teachers as well as companies
contributions from sponsors or advertising revenue
additional chargeable teaching services (e.g. for supervision)

24. Contact