With an increasing number of Massive Open Online Courses (MOOCs), the popularity of MOOCs is rising. A MOOC is an online course with an open character, which supports lifelong networked learning. Unlike the fixed position of a school, a MOOC is built for everyone with internet access. Hence, MOOCs give everyone the possibility to learn.
MOOCs provide flexible, accessible and high quality courses at low cost (or even for free) for people that are interested in learning, which is disrupting the education industry. Higher education institutions and private investors have shown great interest for the rising popularity of MOOCs. Both parties want to either expand their existing brand or enter the education market. Therefore, it is highly likely that in the future the number of traditional courses will decrease, while the number of online courses will increase rapidly.
Coursera, EdX and Udacity are a few big players in the MOOC industry. Coursera’s, which is market leader, value proposition is to provide global access to the world’s best education. They use peer assessments to grade the student’s performance. Coursera sells certificates to students who successfully pass for their courses. They also offer learning programs at universities which combines traditional offline teaching methods with Coursera’s online platform. Coursera was one of the first to enter the market, resulting in a first-mover advantage.
The second largest player is EdX. This firm is founded by MIT and Harvard, which strengthens their market position. EdX is an open source tool, which allows others to create courses to make education available to a wide range of people. The open-source element of EdX is what distinguishes them from the others. EdX makes revenue by opening their platforms to universities and receives a part of the profit from the partner. Moreover, they provide help to universities by producing courses for them.
Udacity, which is developed by Stanford University professors, is trying to position itself on the rightside of the tail. They collaborate with corporates to further develop employees’ skills. Udacity focuses on computer programming courses. They currently offer free courses, but invite students and partners to pay voluntarily. Their revenue model has been shown to be their weakness. Currently, they have 4 million registered users and 11,000 paying students.
Considering those three competitors, we can see that the long tail effect applies to the MOOC industry. The long-tail effect occurs because of demand-side drivers as well as supply-side drivers. One could argue that Coursera is left on the long-tail scale, offering courses to a large audience. Udacity is on the right side of the curve, offering a smaller number of courses to a niche market. EdX is in the middle of the two. In this light, the future of MOOCs are quite interesting. We foresee a more dispersed market, where niche products become widely available due to the increasing customer demand. This would result in a longer tail. It is up to the firms who offer these courses to monetize them.