Posted by: crudbasher | April 3, 2012

A Freemium Education Model

Daniel S. Christian is a blogger and education thinker on my list of great people to listen to. He recently wrote a short post where he wondered if the freemium business model will come to higher education.

A Freemium business model works like this. You can sign up for free to use a web service, but there are certain “premium” features you can only access if you pay a subscription fee. This model works and is used all over the web.

So will this come to higher ed? It’s already there.

When all education took place in the classroom, you obviously couldn’t let people from off the street just sit in on a lecture to see if they like it. Now that more and more education content is going online, you can try it out without disruption.

The freemium model is already being tried out. Stanford let Sebastian Thrun teach his massive online courses. However, there was a limit. You can’t get credit for it. As Kevin Carey noted on Quick and Ed:

So there you have it. Teaching students is what Stanford does. But Stanford is in the business of selling academic credentials. That’s why they were perfectly willing to let Thrun give the teaching away for free, but adamant about the credits and degrees.

As more and more content goes online it’s only natural to give people a taste of it. As long as you don’t get credit for it the traditional business model of higher ed is safe. Even so, it’s fragile thread that maintains the status quo. Make no mistake, people are working on ways to disrupt this. When your business depends on a single thing to continue, you are vulnerable. I wrote about this in The Weak Point Of Higher Education.

(cc) Marshall Space Flight Center

One of the reasons why spacecraft are so expensive is they are built to tolerate failures. For example, the Space Shuttle had five computers. Four of them were identical, and one was designed with completely different software as a further backup. The shuttle only needed one computer to function so it was very resistant to failure.

Some businesses are diversified and so can tolerate failure better than others. Some however are vulnerable to single failures. For example, look at Netflix. They grew rapidly in the last few years but they have been hurting lately. They are vulnerable because their whole business model depends on cheap content. Well, the content creators aren’t selling their content cheaply anymore. In fact, many are leaving Netflix altogether. They have a single point of failure.

Credentialing is universities’ single point of failure. A universities’ whole business model is based on the fact that most people value a degree more than the information they learn while getting it. If you think about it, this is completely unnatural, and I think will be reversed soon. A Freemium model won’t disrupt higher education because they can still make money on it. I think what will disrupt higher education is the disaggregation of teaching from credentialing.

If you want to read more on this I suggest this post:  The Subscription Model of Higher Education

About these ads

Responses

  1. Great posting/thinking here Crudbasher.

    I read a quote a while back that asserted that 50%+ of students would be gone by tomorrow morning if — all of the sudden — they didn’t need the credential anymore. Scary and sobering thought; but it points out that we’re missing the boat in terms of actual engagement and developing a love for learning. (BTW, I didn’t have a love of learning in college either — but have since developed it.)

    Anyway, thanks for your blog and innovative thinking!
    Daniel

    P.S.
    In case it helps, the item I was reflecting on is found at:
    http://danielschristian.com/learning-ecosystems/2012/03/30/will-this-type-of-business-model-be-ported-to-education-related-marketplacesexchanges/

    • Hi Daniel,

      Thanks for the kind words! At the speed of Internet innovation, this process of alternate credentialing could happen faster than people think. Ironically, the focus on credentialing as the core business is a fairly recent development. If you go back a few hundred years learning was the main focus at universities. I really think that the future will look a lot more like the past than we realize.

      Thanks for providing the link to your original post. I thought I had placed it in the first paragraph, but I realized I messed up the link. It’s fixed now. :)

  2. great piece…I totally agree with you


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

Follow

Get every new post delivered to your Inbox.

Join 937 other followers

%d bloggers like this: