The eBay of Education

In my post on the end of the university as we know it, I outlined the financially unsustainable system of higher education in the USA and how organizations like edX (the soon-to-launch amalgamation of MITx and Harvardx), Coursera, and Udacity offer low- to no-cost education to hundreds of thousands of students through open-source online content. I’ve since stumbled across two other platforms that deserve attention, Udemy and Alison.

Alison’s courses are free, but it uses advertising to generate revenue. The more traffic a particular course gets, the more Alison can charge for advertising on the course’s webpages, and instructors who have designed a course of their own supposedly get a share of that revenue. Students can also pay a fee to avoid advertising or to obtain certificates of course completion.

Udemy uses a different business model. There is no advertising. Some courses are free, while others aren’t. Udemy retains thirty percent of any tuition charged for a course; the instructor gets the remainder.  So Udemy has the potential of functioning as an auction system, similar to eBay, that determines the market clearing price for any course. Like carbon credit markets identify how much companies are willing to pay for the right to pollute, Udemy could reveal what students are willing to pay for instruction on a particular topic. My guess is that for most traditional universities — the ones without prestigious brands — tuition is priced higher than what this new market will bear. Unless universities figure out how to drastically cut costs, they will need to radically alter what happens in the physical classroom to convincingly demonstrate that there is value-added to being on campus. Climbing walls and French Fry Fridays aren’t going to do it — people can already access these products for much less off campus.

For people who want to learn for free, Udemy is a superior platform, simply because its pages aren’t cluttered with advertising. The same free content is often on both Udemy and Alison, as well as at the content’s original online location. If a person wants to watch Khan Academy videos for free, no one is going to choose to go to a website plastered with ads when they can watch them ad-free on Udemy or on Khan Academy’s YouTube channel.

One last note: according to this press release from MIT, of the 155,000 people from 160 countries who enrolled in MITx’s initial course this past spring, only 7,157  successfully completed it — a pass rate of less than five percent. That extremely low percentage signifies how difficult the course was and makes completion a very meaningful credential. Most universities, because of limits on enrollment and grade inflation, can’t provide students with a credential that is as meaningful.