To grow the cash cow for tomorrow – why MOOCs?


This is a second piece of economic analysis for my series of MOOCs vs. Online Degree Program, from university point of view. MOOC courses require higher development cost and lower delivery cost, compared to an online degree program course. A return on investment analysis shows an online degree program recoups money must easier much faster. So why on earth, so many universities got into MOOCs? 

According to Wharton School’s 2014 study, an average MOOC course takes 

  • Development cost of US$70,000 (US$20,000 goes to production cost)
  • Delivery cost of US$7,000

Another study by North Carolina General Assembly study in 2010 shows that to run a distance learning program course, the cost pattern reverses

  • Development cost of US$5,387
  • Delivery cost of US$17,564

It costs much more to develop a MOOC course but much less to deliver one. There are several reasons to explain the situation. 

Firstly, during course development stage, a MOOC course requires pedagogical redesign and production. Most educators will have to re-think the whole experience of designing a massive open course, which probably includes significant chunk of video materials. At the same time, an online degree program course might be based on existing campus course which does not necessarily require videos as part of the content materials. 

Secondly, during course delivery stage an online degree program student demands more support and handholding services. Since students are paying tuition, universities might be obliged to provide extra tutoring or administration services. Meanwhile since a MOOC course learner is not paying, they most likely would not expect the same level of support.  

What is the return for investment for universities to deliver a course online?

Let us take a look at variable cost first- the cost to deliver a course. 

To cover the delivery cost, a MOOC course shall have at least 350 learners purchasing a certificate (assuming a certificate charges US$20), to reach breakeven point. If 5% of a MOOC course learner buys a certificate, a course shall expect 7,000 learners to make the number work.

To cover a delivery cost for distance, for credit online course, a program needs 18 students (assuming a student pays US$1,000 per course, see my previous analysis for learner cost analysis blog. For a prestige university, getting 18 students for an online degree program is not an unreasonably goal. An online degree program, therefore, can be a cash cow.


A MOOC course requires higher upfront investment to develop, has less prospect to generate positive cash when it is delivered. Why, then, does the university get into MOOC business especially if it already has a cash cow – online degree program?

I believe a lot of it is due to the emerging global nature of education and a cash cow program needs to be further groomed for tomorrow’s higher education. MOOC is a way for programs to market to a global audience, for university to experiment what works in a more diversified classroom and to develop research based on a global database. My blogs will continue this discussion, by comparing the many differences between these two and their increasing blurring between them.


Sachet education – buy less, more often


To pay for the tuition of my current online degree program , a teacher in Kenya has to work for five full years, not spending money elsewhere at all. 

I am starting my series of MOOC vs. Online Degree program blog with learner cost analysis. To put things in perspective, I created my own index- how many years a teacher needs to work for to pay for continuous learning in educational technology. The teacher can be in London, California, Shanghai, Delhi and Kenya. The options for this continuous learning are (1) an online degree program (2) a campus full time degree program (3) a selection of relevant MOOC courses.

First, I was searching for a ballpark figure of annual salary of a school teacher (US$) in these places. A teacher in California has the highest annual income (US$54,552), London (US$42,402), Shanghai (US$6,000), Delhi (US$3,600). A teacher in Kenya earns the lowest absolute dollar value of salary (US$2,257) .

If the teacher wants to continue a journey in educational technology, the existing choices are limited but widening at least. Stanford’s Learning, Design and Technology campus degree program costs US$31,000 tuition alone (approximately US$2,000 per course). My purely online degree program of educational technology charges tuition for over US$11,000 (10 courses, US$1,000 per course). A Coursera (MOOC platform) specialisation track for 9 courses in teaching costs US$428 (9 courses, US$48 per course). (Note, it is not exactly educational technology, but I would expect sooner or later, this will improve)

In summary:

  • A campus program by a prestige university, US$2,000 per course, bundled offering.
  • A purely online program by a reputable university, US1,000 per course, bundled offering.
  • A MOOC specialisation track, US$48 per course, unbundled.

The situation is not bad for a teacher in a developed economy but quite unattainable for a teacher in developing countries. 

Going to Stanford will cost a teacher in California 7 months of his/her salary, a teacher in London 9 months salary. The same education costs a teacher in Shanghai over 5 years’ salary, almost 9 years for a teacher in Delhi. This is the worst for a teacher in Kenya, tuition alone eats almost 14 years of his/her salary.

How about doing this via an online degree program? The tuition will still cost a Kenya teacher 5 years of salary, (close to) 2 years’ salary for a Shanghai teacher and 3 years for someone in Delhi.

The next option can be Coursera’s specialisation track – Foundations of Teaching for Learning.This 9 course collection is provided by Common Wealth Education Trust. I have to say it is not exactly educational technology. But I am hoping that sooner or later something more relevant will be there. A teacher in Kenya will only need to put 2 months of his/her salary to pay for that whole program. He/she would also be able to pay an unbundled price, a US$48 unit price per course. That US$48 per course rate, is a quarter of his monthly salary. 

Sachet marketing shampoo

Sachet marketing is a concept that consumers buy less but more often. For example, instead of buying a shampoo bottle, consumers go to grandpa grocery shop and get shampoo in small package size. They are also more convenient to carry and transport, more flexible. The concept is proved a huge success in developing markets such as India.

Would we, one day, have a sachet education?


Virtual personality



Virtual interaction is hard, many people say. As you cannot tell one’s personality too easily from just emails, texts, Google hangouts and Skypes. Plus there is lack of social cues which are usually detectable from face to face interaction. If you can see somebody pouts, frowns or grins, you know what makes them happy, sad, annoyed. What if you cannot?

There are still a lot to pick up to understand one’s virtual personality!


Cat-Personality_zpsytsbyisdI used to work with someone who responses to every single email, generous, encouraging and positive. That is a great email personality. At the same time, you can imagine how much attachment there is with the blackberry. I most of time walking out of our working lunch, counting the minutes my colleague looks up from the blackberry. A personality online is not necessarily the personality offline. 

Another thing fascinates me is how one discusses and negotiates during virtual collaboration. One thousands men have one thousands ideas. It is hard enough to discuss and debate in person. Doing it virtually is even harder. How does one raise questions, how does one express different opinions, how does one listen (if he/she really does), how does one compromise, how does one admit mistake? How are the process and rules set?  Does it include everyone? As someone who came out of a totalitarian environment, I learnt never to take discussion for granted, even online.

The hardest part – interpret silence. I can find out if one is process driven or result driven, if one likes to lead or support by things done, words said. Silence, however, is hard to decode.

One of the best dating advice I have received is – see what a man does, not what he says. This carries truth even for virtual personality!

MOOCs vs Online Degree Program


It is only natural that someone like me working in MOOC industry will put so much faith in online education that he/she starts a purely online degree program. The program I joined has been running for a month now, long enough for me to begin a bit of reflection. How do I compare my experience doing numerous MOOC courses and doing an online degree program?

Since the very beginning there is always a voice asking ‘Is MOOC there to stay?’. I still have not formed a view on that. Having said that, the one key contribution of MOOC (I feel) is to empower students by making higher education teaching quality transparent and this is utterly important. 

For each theme below I will write a more elaborated blog after this summary reflection.

Money, money, money: MOOCs are free and online degree program costs money. I will write a separate piece on economics (using only public data). Does paid program mean premium quality? I will leave readers to make your own conclusion.

Culture in/exclusion: due to the massive distribution of MOOC learner demographics, it is much less likely to have a dominant culture in a MOOC course than in an online degree program. It is hardly surprising. When I was sitting in my classroom in Shanghai for my primary school education, there was no one from outside the city. The situation significantly changed when I enrolled my first MOOC course.

There is no doubt an online degree program is much more structured and systematic. MOOC is not there yet. However if I am to compare two courses of the same topic: a single course from an online program and a single MOOC course, the answer is different. Most of the exceptional courses I have taken are MOOCs. Maybe at this moment, no single MOOC platform has a well organised program yet. But with MOOC aggregators and the development of the sector, an optimistic like me would say things can be different very soon.

Presence of instructor – why to teach: My very very honest feeling as a learner: MOOC instructors teach out of passion, online degree program instructors teach out of duty. Again, this does not represent the whole picture. It is merely my personal experience.

Presence of the instructor – how to teach: Instructors can play various roles. They can be ‘ghost’, basically those who never make an online voice. They can be ‘fixers’, sending messages when something goes wrong. They can be cheerleaders, tutors, facilitators. .There is much to write about from student’s view – how do we feel about voice of the instructor.

Reiteration: in general, MOOC courses reiterate much faster compared to an online degree program. Again, need space for more analysis, worth a separate blog about it.

Group experience: I have not seen winner in this area. It is hard to begin with – how you organise good quality group work when people are scattering around the world? It requires much more than what technology can offer. If someone can crack this, I will say that is a revolutionary milestone in education.

I will continue writing about each theme after this summary. Don’t know how this will end (or is there an end?) but somehow I feel this is a good beginning.

cat and dog

It made my year of Monkey


For the last two years, I have been sending research papers about MOOCs and online education to a group of around 300 academics, on a weekly basis. This becomes such a routine that I just set Tuesday night for this MOOC research newsletter. I named my newsletter MOOC big bang, attributing to one of my favourite TV show – Big Bang Theory. (Yeah I am nerdy)

Last Tuesday I was doing business as usual. I went home, did my newsletter and pressed my send button. What I totally forgot was it was the beginning of Chinese New Year, the Year of Monkey.

One professor replied to me ‘Wow, you are still working on your Bang during Chinese New Year! I have benefited so much from reading your newsletter from the whole year last year. Happy Chinese New Year!’

Not a bad beginning for my year of Monkey.