Geography Intrudes

Marketplace recently did a story on massive online courses – nothing too earth shattering, but it did draw attention to the fact that some of the biggest players are for-profit companies. Companies that, in some cases, didn’t seem to have much of a model for making money. But in the story two possible avenues are revealed:

There are at least two ways to make money, says Coursera’s Daphne Koller. Classes should always be free, she says, but maybe not the proof that you successfully completed the course.

“The certification may be something people pay a modest amount for,” Koller says. “When you multiply it by the number of people we’re talking about can bring in a nice revenue stream.”

Coursera and Udacity will also make money with a kind of job-referral service. Each will charge a fee to connect successful students with companies that are hiring.

Another recent story may point to why one of those two revenue streams may be very complex. The Chronicle recently noted that Minnesota had sent a letter to Coursera stating that their courses were not allowed in the state because they hadn’t been approved by the department of higher education. Although the position has since been clarified, indicating that free courses are not in violation of the law (sort of), it does open another avenue of questions: if the state has rules requiring the certification of a course, what does that do to the concept of free online courses? In the case of Minnesota, it sounds as though this issue will come back as soon as money changes hands. So will MOOC operators have to have a local staff working with education officials in every jurisdiction? And if so, what will that do to the cost of those certificates? And what about places where the paperwork makes the whole endeavor unprofitable?

In many ways, the issues raised are not new. But the added complexity of a university that has no physical presence will certainly keep everyone on their toes for the foreseeable future.

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