How to calculate the real costs of developing and delivering MOOCs

Hollands and Tirthali estimate that personnel costs range between $29,000 and $244,000 per MOOC, depending on the number of people involved in the process, the amount of time dedicated, and the quality of video production.

“We estimate total costs per MOOC, including facilities, equipment, and overhead, of $38,980 to $325, 330,” the authors explain. [The costs of the platform, captioning, content hosting, and analysis of user data to populate the data dashboard were assumed by Coursera for all xMOOCs analyzed by the authors.]

Hollands and Tirthali calculated the costs, in part, by analyzing multiple case studies. In the report, they present a snapshot of four different MOOCs:

1. “Connectivism and Connected Knowledge (a cMOOC): The first course to be dubbed a “MOOC,” it was developed and delivered in 2008 by George Siemens and Stephen Downes. The 12-week course was offered at the University of Monitoba to 25 enrolled students for a fee and for credit, and also as a free, non-credit-bearing course to 2,300 other participants. The course has also been re-run 3 times since. The total costs of personnel time ranges between $66,000 to $71,000.

Consideration: Re-run versus initial costs. According to the researchers, re-runs of the MOOC are less expensive, with personnel costs dropping to $50,000 to $54,000 and total costs for the entire MOOC at $41,000—38 percent lower than the low estimate for the first run. More information on this case study can be found here.

2. xMOOC at a large Midwestern university: In 2013, a small number of faculty members were invited to develop and deliver five-to-eight week MOOCs, primarily to showcase the university and engage new audiences. Total personnel costs ranged from $152,830 to $244,000. Total costs per MOOC were $204,000 to $325,000.

Consideration: This university, which the authors say requested partial anonymity, had already established an infrastructure for the development of online courses, which may have streamlined faculty time efficiencies and cut down on production costs. More information on this case study can be found here.

3. American Museum of Natural History MOOC initiative: Between September and December 2013, the American Museum of Natural History (AMNH) delivered three four-week long MOOCs targeted at science educators. Planning efforts began in Spring 2013 and involved a team of museum professionals who had “significant previous experience in developing and delivering online education.” Estimated personnel costs to develop the three MOOCs created by AMNH are $78,000 per MOOC and total costs at $105,000 per MOOC.

Consideration: The costs passed on to MOOC participants. Of the total 39,685 participants who initially enrolled in the three MOOCs, 1,155 completed and passed all course requirements. Costs per completer for the MOOCs amount to $272, say the researchers. More information on this case study can be found here.

4. Big Data in Education: Big Data in Education was an eight-week MOOC delivered on the Coursera platform in late 2013. The MOOC was free, open to any participant, and non-credit-bearing. There were 48,058 registrants and 526 of them completed the last assignment. The two authors estimate personnel costs of $29,000 to replicate the development and delivery of Big Data in Education, and total costs of $38,980. With 526 students completing Big Data in Education, estimated costs per completer are $74.

Consideration: Ryan Baker, a faculty member at Teachers College, Columbia University, developed the course by adapting a 16-week on-campus version usually taught to classes ranging in size from eight to fifteen students. Adaptation could have an effect on faculty time considerations. More information on this case study can be found here.

The authors emphasize that several questions remain to be explored with respect to MOOC costs and cost-effectiveness and whether they can eventually contribute to reducing the costs of higher education.

For example, “cost analyses of MOOC re-runs would help ascertain whether costs of re-offering a MOOC diminish substantially as compared with the initial offering.” Also, “the feasibility of sharing courses across multiple campuses must be explored, as should the question of whether, over the longer term, variable costs of MOOCs can be contained by automating functions and substituting instructional support provided by expensive faculty members with less costly TAs, part-time instructors, or peer-to-peer learning and assessment.”

In terms of research, the authors believe studies of MOOC effectiveness with respect to educational outcomes “should be combined with cost analyses to help determine whether spending more on MOOC production and delivery leads to better learning outcomes.” For example, does higher quality video production lead to higher rates of course completion or greater acquisition and retention of knowledge? Does substituting tenured faculty members with non-tenured instructors or TA’s affect student performance and learning in MOOCs?

“To answer the question of whether MOOCs are a cost-effective means to deliver education, we must be able to compare the costs of MOOCs to the costs of alternative delivery mechanisms, as well as the effectiveness of each alternative with respect to a common outcome of interest, such as increasing participants’ level of knowledge or skill in a specific subject area,” conclude Hollands and Tirthali. “Generating cost-effectiveness ratios for a number of educational alternatives, including MOOCs, would allow decision-makers to choose which programs represent the best investments of resources.”

For the full study, click here.

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