Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS.

COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

REVENUE VS. COSTS OF MOOC PLATFORMS.
DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS,
BASED ON EMPIRICAL FINDINGS AND EXPERIENCES DURING
IMPLEMENTATION OF THE PROJECT IMOOX.
Helge Fischer1, Stefan Dreisiebner3, Oliver Franken1, Martin Ebner2, Michael
Kopp3, Thomas Köhler1
1

Dresden University of Technology (Germany)
2
Graz University of Technology (Austria)
3
University of Graz (Austria)

Abstract
Massive Open Online Courses, or MOOCs, are a modern phenomenon. Education for anyone,
anytime and also from anywhere is the goal of various well-known MOOC platforms. On the one hand
there is the noble idea to bring free education to society, but on the other hand there is the interesting
question of who should pay for it. This research deals with the following research question: How
should a business model for a MOOC platform look like. First, the models of the worldwide leading
providers are described. Afterwards, a first cost model of the Austrian platform is presented. In the
final section, possible revenues streams are discussed. It is concluded that a working business model
will not be an easy task, but will be absolutely necessary for the future of (online) education.
Keywords: MOOC, business model, iMooX, costs

1

INTRODUCTION

The potentials of Massive Open Online Courses (MOOCs) - especially of so-called extended MOOCs
(xMOOCs) - have been discussed in academic education for several years [1]. Business models
entered the debate already at an early stage. Since the creation and provision of xMOOCs is quite
expensive, considerations for recovering these costs are an obvious task.
In this context the additional value of xMOOCs has to be questioned. When American elite universities
provide MOOCs, advertising and promotion seem to play a very important role. The attraction of
students with high potential is a core part of the calculated revenue. Since these universities charge
rather high tuition fees, investing in high-end productions of MOOCs seems reasonable. In this case
universities rather act as companies: They invest in promotion to sell their product – which of course is
education. From a different point of view (and in a far more altruistic way) the supply of MOOCs is
motivated by the idea of providing access to education to as many people as possible. Although the
costs for the MOOC production are the same, there is no direct revenue for the providers. In this case
universities take their social responsibility into consideration. Advertising their programs and promoting
their professors is a positive side effect, but the core issue is to open lecture halls and scientific
research outcomes to the public.
A university can manage financing the production of one or the other MOOC rather easily. But if a
university decides to produce MOOCs (e.g. as an inherent part of a curriculum) on a regular basis,
financing becomes a very important issue. Additionally, universities (except those who built edX as
their own platform) need a third party provider to provide their MOOCs with the help of a central
platform. This is where MOOC-platforms step in. They offer a rather functional platform with standard
features such as discussion forums and quizzes, carry out marketing for their platform, generate a
significant number of participants, and analyze their behaviors and learning outcomes within the
platform [2].
So, when it comes to business models, MOOC platforms move to the center of interest. On the one
hand because they offer different possibilities of re-financing their MOOC production costs to
institutions of higher education; on the other hand because they need a business model of their own to
finance their own costs for operating and developing their platform. Offering free access to the course
and its components is a substantial characteristic of MOOCs – at least at the moment. Therefore,
participants cannot be charged for attending a course and for using its learning materials during the
course. But they can be charged for additional services like individual supervision, additional learning

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

materials, or examination fees. Usually the gained revenue is shared between the platform provider
and the MOOC provider in a certain apportionment.
However, these fee-based services do not gain nearly enough money to cover the costs for operating
a MOOC platform or even to cover the costs for producing a MOOC. Thus, two additional financing
models come into play: Venture capital financing is especially very popular in the USA where this
financing model has a long tradition. Public authority funding is rather common in Europe, either by the
government (e.g. by ministries of science and/or education) or by academia itself. When analyzing
business models for MOOC platforms, private and/or public funding structures are core components of
these models.
Considering the freedom of education and its independency from private investors, venture capital is a
controversial financing method for MOOC platforms, although currently it seems absolutely necessary.
In addition, the newest trends show that even venture capital is not enough to operate a MOOC
platform sustainably with a balanced budget. In this context the overseer of Stanford University’s
massive open online courses program, John Mitchell, predicts the university will turn away from
offering online courses for free [13][14].
Under these circumstances establishing a cost model for a long term provision for an xMOOC platform
is not a simple task and solid research work has to be carried out. Asking how xMOOC platforms can
operate in a sustainable way is one of the key research questions in this context, and this paper will
attempt to offer some answers.

2

BUSINESS MODELS OF MOOC PROVIDERS

In recent years, several providers of MOOC platforms have emerged on the market for digital
education. Providers from the USA are dominant. The following section addresses the question how
these providers operate on the market. What are the business models of leading MOOC platforms?
Answers to this question can help to identify options of refinancing the enormous production costs of
MOOCs. Subsequently, the business models of the MOOC platforms Coursera, Udacity, edX and
1
2
3
iversity are analyzed. Whereas Coursera Udacity and edX are international MOOC providers,
4
iversity is one of the largest MOOC platforms in the German-speaking field of academic education.
The basis of comparison is the business model concept of Euler, Seufert and Zellweger [3], which
identifies and characterizes areas for action of education providers and can be used as a conceptual
framework for the analysis and comparison of business models in order to extrapolate a best practice
business model. Since the concept was developed for the establishment of e-learning in higher
education, it provides a good basis for the comparison of MOOC business models. The basic idea of
the concept is the distinction of four design dimensions of business models: product-market
combinations, financing, market positioning, and value added processes.
Product market
combination

Value added
processes

Market
positioning

Financing

Figure 1: Business model concept for e-learning by Euler, Seufert and Zellweger [3]

1

http://coursera.org [retrieved 28.09.2014]

2

https://www.udacity.com [retrieved 28.09.2014]

3

https://www.edx.org [retrieved 28.09.2014]

4

https://iversity.org [retrieved 28.09.2014]

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

Product-market combination: The starting point is the question of what products are offered by a
provider for which customer group. Therefore the present study analyzes the product portfolios of
MOOC platforms.
Financing: This dimension focuses on the analysis of costs and revenues of an education offer. Since
no reliable information about the costs of MOOCs is available on the corresponding platforms, at least
the revenue structures of MOOC providers can be analyzed. How are MOOCs on Coursera, edX,
Udacity and iversity refinanced?
Market positioning: Due to the large number of providers of MOOCs and classical education, it is
important to know which market position the analyzed MOOC providers (Coursera etc.) want to
achieve. Which strategy leads to a good market position?
Value added processes: Which institutions are involved in the planning, production, implementation
and certification of MOOCs?
Subsequently the business models of the four selected MOOC providers (Coursera, edX, Udacity, and
iversity) will be described based on the business model concept of Euler et al. [3]. The following
questions are discussed: What services are offered? What market position is intended to be
achieved? How are the costs for MOOC production and provision refinanced? and Which partners are
involved in the value chain? The analysis is based on editorial documents (e.g. from online portals),
scientific papers, and reports by the selected MOOC providers (provided on their websites). For the
study the content analysis (as suggested by Mayring [4] [26]) is used, i.e. received information is
classified into the four key categories of the business model concept.

2.1

Product combinations

First of all, the quantity of MOOCs and their distribution within academic subjects was analyzed. It
could be shown that most of the MOOCs are offered by Coursera. Currently 683 MOOCs, divided into
25 subject fields, are registered on this platform. By analyzing the number of users again the
relevance of Coursera (with approximately 8.5 million registered users) became obvious. The
remaining platforms offer a smaller number of MOOCs. However, the number of MOOCs is not the
only criterion to describe the offers of Coursera and others. Also important is the question of how the
MOOCs are integrated in the study programs or academic courses. Three strategies could be
distinguished:
1. The majority of MOOCs are sold individually and lead to certificates.
2. The providers Coursera, Udacity and edX connect individual MOOCs to complex certificate
programs. These contain up to 10 different MOOCs and are offered as "higher" education
programs. For instance, within the program "Specializations On Coursera" the provider offers
5
10 educational programs based on connected MOOCs.
3. A third option is the provision of MOOC-based study programs (e.g. Master programs). The
MOOC providers edX and iversity intend to offer such digital study programs in future. The US
platform Udacity currently realizes a MOOC-based study program in cooperation with AT&T
6
and the Georgia Institute of Technology.
Certificates for individual (option 1) or chained MOOCs (option 2) are offered by the MOOC provider or
(in some cases) by the academic institutions. Academic degrees (Option 3), however, are offered only
by universities.

2.2

Financing

All MOOC providers financed the establishing of the business with equity capital and/or venture
capital. Private (e.g. companies) or public investors (e.g. foundations) supported the various providers
through substantial investments (partially in the double-digit million euro range) in that stage. It can be
assumed that these investments were mainly used for the establishment of technical infrastructure,
business cooperations, and market position. Hence, the platform providers must generate turnover
with increasing establishment on the market in order to pay returns to the investors. But how do
MOOC providers achieve turnover? The following revenue sources were identified:
5

https://www.coursera.org/specializations?utm_medium=topnav [retrieved 28.09.2014]

6

http://www.fastcompany.com/3021473/udacity-sebastian-thrun-uphill-climb [retrieved 28.09.2014]

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

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

The cost of the operation (e.g. the technical and organizational infrastructure) could not be identified.
Therefore, it could not be clarified whether these costs are covered by revenue.

2.3

Value added processes

With this dimension value [3] [5], the activities MOOC providers perform and those taken over by their
partners are analyzed. For the MOOC production the platform providers cooperate with universities as
well as with companies [6]. The cooperation partners deliver content and get additional support in the
manufacturing process by paid support options. Finally the finished MOOCs are provided and
communicated by the platform provider. Some providers (e.g. Udacity) offer a chargeable personal
7
support during the learning sessions to the participants. The provider iversity cooperates with
universities to integrate MOOCs as blended learning offers in university teaching. The implementation
and assessment of the tests is done by the providers themselves (e.g. Coursera) and/or by
cooperation partners such as universities and companies (e.g. iversity).

2.4

Market positioning

All platform providers cooperate during the creation of MOOCs closely with universities. While the
provider Coursera wants to increase the number of university partners, in order to establish itself as a
mass provider, other MOOC platforms pursue niche strategies. Udacity for example focuses on the IT
market and maintains a close contact with companies. Strategies of Udacity include the development
of MOOC-based study programs in the field of computer sciences or the provision of tailored business
8
trainings.
The results of the study show similarities and differences between the four MOOC providers in terms
of their market activities. However, none of the providers deliver relevant information regarding
calculated costs for MOOC production or the provision of a technical platform. Unfortunately, this
information is urgently needed in order to derive sustainable financing concepts. Therefore, in the
following the cost structure for development and provision of MOOC platforms will be presented based
on a case study (iMooX).

3

PRACTICAL EXPERIENCES – THE PLATFORM IMOOX

Our practical experiences are based on the Austrian MOOC-platform called iMooX. iMoox is a publicly
founded project with the idea to bring open online courses to a public audience. Hence, the idea is not
only to offer courses of the university, but also for a broader target group. Especially school children
as well as elderly people are the predefined target group. The project was initiated by the University of
Graz and Graz University of Technology. Due to the fact that both are well-known representatives of
Open Educational Resources (OER) in Austria, they see MOOCs just as a further step towards Open
Education [7]. So from the very beginning of the project it was defined that each course offered by
iMooX must be offered as OER using standard creative commons licenses. Which kind of license
must be defined by the teacher or the appropriate institution.
In 2013 the project started investigating three different directions and questions:
1. Technical issues: First of all a platform for so-called xMOOCs was designed and developed.
The main parts are a user management, a possibility to offer course elements in a weekly
period, as well as course descriptions and downloadable content. Finally a discussion forum
should assist the communication between students-teachers and students-students [11].
Furthermore, social media integration as well as a mobile usable interface is offered. The
7

https://www.udacity.com/course-experience [retrieved 28.09.2014]

8

https://www.udacity.com/organizations [retrieved 28.09.2014]

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

platform went online in February 2014 and attracted more than 2000 users within a few days
(http://imoox.at).
2. Pedagogical issues for courses: The second main part of the project is of course to offer some
courses on the platform. One typical xMOOC consists of weekly structured learning contents.
Within each week at least one video about the learning topic is provided as well as an
additional content like weblinks, documents, or interactive learning objects. Finally a weekly
self-assessment should help students to foster their learning outcomes. It is rather obvious
that offering learning content needs special knowledge about (MOOC)-pedagogy. Therefore
the project followed pedagogical guidelines to assist teachers in their preparation of learning
content with a special focus to MOOCs [8].
3. Business models: As mentioned beforehand, iMooX focuses strongly on offering courses for
free as an Open Educational Resource and will not close access after the course end date.
The main idea is that students can continue to use the learning content anytime after the end
of the course and also that other teachers and trainers may access it for their personal use.
Bearing in mind a very rigorous copyright, at least in middle Europe, this issue is perhaps the
most important one [9]. Nevertheless, a master thesis [10] has begun to investigate whether
there is a business model to make iMooX financially feasible or not.
In this publication we concentrate just on the financial aspect and our first experiences. Due to the fact
that from already existing MOOC providers no cost reports are available, the first step was to develop
a cost model.
cost
Own MOOCs – variable costs for each course unit
Concept of the course content (€ 38.31 x 12 h)

459.76

Video production
(2 Videos à 6 min; € 19.45 x 20 h x 2)

777.86

Post-video production
(2 Videos; € 19.45 x 1.5 h x 2)

58.34

Upload of content to the platform (€ 15.20 x 3.5 h)

53.21

SUMMARY

1,349.17

Pedagogical supervision and quality assurance (€ 25.00 x 15 h)

375.00

Technical assurance and operational test (€ 15.20 x 10 h)

152.02

SUMMARY

527.02

Lecturer (€ 38.31 x 5 h)

191.57

Teaching Assistant
(Supervision of discussion forum; € 15.20 x 5 h)

76.01

SUMMARY

267.58

10,337.70

(€ 19.45 x 56 x 40h)

43,560.35

Support – user questions (€ 15.20 x 56 x 1h)

851.33

Marketing – tangible means

2,000.00

56,749.38

Own MOOCs - variable costs for each course

Teaching and Supervision - variable costs for each course unit

Current cost – One-time costs per year
Platform and project management, marketing (€ 30.77 x 56 x 6 h)
On-going platform development

SUMMARY

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

Infrastructure costs – One-time costs per year
vCPU, RAM and HDD

442.00

Electricity

200.00

Staff

100.00

SUMMARY

742.50

Table 1 Cost model of the platform iMooX
Table 1 presents the cost model of the platform iMooX. The model is based on the cost model
according to [12]. There are some assumptions:

We assumed that 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 estimated hours result in a course with videos of a length of about 5 minutes each. The quality of
the videos is good but not high-end quality. The estimated hours are taken from our experiences of the
first three MOOCs at iMooX in spring 2014. Considering Table 1, a MOOC lasting 7 weeks (including
2 videos for each week) costs 9,971.21 €. Furthermore, the one-time costs per year for the
development of the platform are about 55,500 €.
Finally, there are some important notes: The cost model is for a non-profit organization as well as for a
typical middle-European university. Due to the fact that a university usually maintains computer and
information services departments as well as many people with appropriate know-how about
information systems and technology enhanced learning, there is a strong in-house knowledge.
Furthermore, in-house lecturers might be able to provide content.
Nevertheless, it must be discussed how such a platform as well as the content development can be
maintained in the long run.

4

DISCUSSION

As shown in chapter 2, MOOC providers in the USA are experimenting with different sources of
income, including proctored exams leading to special certificates and credits, fees for individual
tutoring, and selling contact data of successful attendees to enterprises [15][16][17]. Nevertheless,
some of these business models cannot be easily implemented at a European university due to legal
and cultural issues.
A possibility of covering the overhead costs of running a MOOC platform is a fee for hosting the
content. Table 2 shows the essential fees in different cases, in order to reach the breakeven point
under the assumption of the cost model shown in table 1. There are the following 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 nonprofit institutions

A marketing cooperation provides a fixed yearly income of 7,000 €

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

Case 1 (basis case): 10 external MOOCs

Essential fee per year
and course

8 courses of non-profit institutions

3,883.99

2 courses of commercial institutions

9,709.98

16 courses of non-profit institutions

1,942.00

4 courses of commercial institutions

4,854.99

24 courses of non-profit institutions

1,294.66

6 courses of commercial institutions

3,236.66

-€

26,533.69

8 courses of non-profit institutions

1,842.94

2 courses of commercial institutions

4,607.35

Case 2: 20 external MOOCs

Case 3: 30 external MOOCs

Case 4: Reducing labor costs of programmer
Cost savings
In this case essential fee per year in case of 10 external MOOCs:

Table 2: Essential fees for hosting of MOOCs considering the cost model shown in Table 1
Cases 1 to 3 show the essential fee with a different number of hosted external MOOCs, always under
consideration of before-mentioned assumptions. Case 4 considers the assumptions of case 1 when
reducing costs through the reduction of employment of the programmer dedicated to the further
development of the platform. All cases show that a yearly fee for hosting the content under the
assumed circumstances would have to be between €1,294.66 and €9,709.98. In the context of middleEuropean education systems with limited funding these numbers seem critical, especially if the
platform should be financed by mainly non-profit institutions in the longer run. On the other hand, if the
fees are lowered to €200 for non-profit institutions and €500 for commercial institutions under the
same assumptions the breakeven point would be as high as 194 hosted courses, which seems
unrealistic for a newly started MOOC platform. Thus, fees for hosting of MOOCs do not seem to be an
appropriate way for funding the overhead costs of a MOOC platform in Europe.
The above-mentioned findings show that financing only by fees for hosting seems to be unrealistic.
Nevertheless, such fees could be part of a broader financing model. Therefore further market research
has to be conducted to assess the willingness of non-profit institutions to pay such fees. Due to the
positive impact of free access to learning content for the society [10], one additional source of
financing could be public funding. At a public university such public funding can also be realized by
providing the technical infrastructure and staff. How a broader approach for financing a MOOC
platform and the development of new MOOCs could look like will be discussed in the next paragraphs.
New MOOCs might be funded by universities themselves. There are some good reasons for that:
MOOCs have a positive marketing effect for the university and also help possible future students to
explore possible majors and thus might reduce drop-out rate [10]. Professors might also produce
MOOCs by themselves. According to a survey by the Chronicle of Higher Education, many professors
teaching MOOCs state as their main motivation to improve worldwide accessibility to high-quality
higher education and to improve their public prominence and teaching skills [18]. These motivations
might act as a trigger for professors to provide MOOCs free of charge.
The corporate training market seems to be an attractive possible source of income. Especially the
MOOC platform Udacity has lately focused its business model on this segment, particularly by
providing courses sponsored by tech companies with the aim to train industry-relevant skills and find
possible future employees among the most successful attendees of the MOOC [19][20]. A recent
study published by Bersin expects a rapid growth in the corporate training market in the near future.
Only in the United States the recent market volume for corporate training was 62 billion dollars,
whereby half of that sum has been invested in technological solutions and instructors. Bersin
anticipates an important role of MOOCs in this market for the future [21]. In this context also public
adult education institutions have to be mentioned, which could invest into MOOCs to expand into
online education or support their own courses by using MOOCs for flipped classrooms or blended
learning scenarios. Due to the possible use of MOOCs in schools and for teacher education [22]

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

funding by private and public education funds seems realistic. The ministry of science of the German
state of Baden-Württemberg recently funded the development of MOOCs in English language to
9
promote usage of foreign languages in education.
The selling of certificates can be an ongoing source of income. Most of the huge MOOC platforms
offer such services like Coursera with Signature Track and iVersity with even some credit-bearing
certificates [16][17]. Due to legal restrictions, such credit-bearing offers cannot be easily introduced by
universities in all countries, like Austria, where the student has to be enrolled in the university where
he/she takes a proctored MOOC exam [23]. A smaller ongoing source of income is a bonus for
referred buyers in e-commerce. Some courses on Coursera use links to books on Amazon via the
10
Amazon partner program to generate revenues [24]. Coursera also mentions fee-based tutoring as a
11
possible income-stream for the future [16]. Similar to the registered student model of Coursera , a
MOOC might also be licensed for internal use at enterprises or universities.
A further interesting selling point might be to provide reports of the courses about learners’
performance for trainers, teachers as well as companies. All larger platforms are already tracking
students’ activities in order to determine how to perform best, what are the major tasks of the course,
or how learning is happening in general. Based on such reports, recruiting might happen.
Possible future business models for MOOCs already exist in the older market of Learning
Management Systems (LMS). Some large providers of LMS offer partner programs that offer partners
– usually tech companies providing consulting regarding LMS – various exclusive advantages, like a
12,13
contact person, exclusive information, and influence on the further development of the platform.
Therefor they pay fixed prices or a nominal part of their annual revenue. To allow such business
models the MOOC market still has to grow further and new companies specialized in consulting of
MOOC development have to evolve [10].
Implementing some of the possible business models still bears some challenges, especially in Europe.
There are legal and ethical issues concerning selling data of successful attendees and credit bearing
certificates. But there are also cultural questions, like if users in Europe are willing to pay for special
services, such as certificates, in an education system that is mainly based on public funded offers free
of charge. Despite that, also services that seem to have a low acceptance by users in Europe due to
cultural issues should be tried to assess their success.
Despite the growing relevance of the MOOC topic and a growing number of business models,
financing of MOOC content and the MOOC platform itself is still a challenge. A further challenge in this
context is the growing competition of MOOCs [25]. Therefore, a concentration of different efforts
makes sense. Thus, also projects like iMooX in Austria, which concentrates the efforts of different
universities, are a step in the right direction. To support that also further public efforts have to be
carried out to solve legal issues and to grow a further public awareness for the numerous possibilities
offered by MOOCs.

5

CONCLUSION

This research work addressed the topic of business models for MOOC platforms. Although the four
biggest MOOC providers worldwide were analyzed, the result was not satisfactory. Therefore we took
a close look at the experiences with iMooX, the Austrian MOOC platform. Whereas the costs are not
as high as of their US counterparts, there was no real venture capital, the problems are nearly the
same – free or open content may be great for the education of society, but needs on the other hand of
course an investor (public, sponsors, bankers, etc.). We strongly believe that Open Educational
Resources are also a matter of the society itself; in other words, the public (government) should be
interested to bring such content to anyone in order to assist teaching and learning. Nevertheless, this
is not an easy task, as this research study pointed out, and further work will be necessary.

9

http://www.baden-wuerttemberg.de/de/service/presse/pressemitteilung/pid/wissenschaftsministerium-foerdert-ausbaufremdsprachiger-lehrangebote-an-hochschulen/ [retrieved 28.09.2014]
10

https://partnernet.amazon.de/gp/associates/join/landing/main.html [retrieved 28.09.2014]

11

http://www.documentcloud.org/documents/400864-coursera-fully-executed-agreement.html [retrieved 28.09.2014]

12

http://www.d2l.com/partners/details/ [retrieved 28.09.2014]

13

http://moodle.com/partners/ [retrieved 28.09.2014]

Originally published in: H. Fischer, S. Dreisiebner, O. Franken, M. Ebner, M. Kopp, T. Köhler (2014). REVENUE VS. COSTS
OF MOOC PLATFORMS. DISCUSSION OF BUSINESS MODELS FOR XMOOC PROVIDERS, BASED ON EMPIRICAL
FINDINGS AND EXPERIENCES DURING IMPLEMENTATION OF THE PROJECT IMOOX (pp. 2991-3000), ICERI2014
Proceedings, 7th International Conference of Education, Research and Innovation, Seville (Spain) 17-19 November, 2014:
IATED. (ISBN: 978-84-617-2484-0)

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