How to calculate the real costs of developing and delivering MOOCs

Researchers at Brown and Columbia attempt to determine not just costs associated with MOOC production, but faculty time, marketing, and IT development…and if it’s all worth it.

MOOC-costs-researchIs a MOOC worth anywhere between $39,000 to $325,000 in development and delivery costs to your college or university? How do you know?

For colleges and universities already on alert thanks to uncontrollable costs associated with higher ed, the decision whether or not to spend hundreds of thousands on MOOCs should be an intimidating one.

However, according to Fiona Hollands, associate director at the Center for Benefit-Cost Studies of Education at Teachers College, Columbia University; and Devayani Tirthali, independent researcher at Brown University, little publicly available information on MOOC costs based on rigorous analysis exits for those interested.

“It appears that lowering costs is not the highest priority for MOOC initiatives,” say the authors: “among the 140 or so institutions of higher-ed offering MOOCs in Allen and Seaman’s sample, less than ten indicated that exploring cost reducation was an objective for their MOOC initiatives.” In a separate study, Hollands and Tirthali also found that, of 29 institutions offering MOOCs, improving economics was a goal for only 38 percent.

The two authors go on to list many other recent studies showing that MOOC costs were not a high-priority issue for institutions; instead, universities were more concerned with increasing access to education, raising institutional visibility or building brand, increasing student recruitment, and improving or innovating pedagogy.

But with recent national spotlights on college affordability, as well as questions surrounding MOOCs’ effectiveness for learning, can institutions continue to turn a blind eye to the high price of MOOCs?

(Next page: How to calculate the real costs of MOOCs)

Based on interviews conducted with 83 administrators, faculty members, and researchers; and using case studies, as well as the U.S. national average salary and benefits rates for public postsecondary faculty members and public sector research scientists, the two authors aimed to determine not just what most MOOCs cost institutions [as the producer, as opposed to the platform provider], but also how to calculate those costs.

According to their research, here are the main considerations in MOOC development and delivery:

  • The number of faculty members, admin, and instructional support personnel participating in the process
  • The quality of videography
  • The nature of the delivery platform
  • Programming for special features, such as computer code auto-graders, virtual labs, simulations, or gamification
  • Analysis of platform data
  • Technical support for participants

Here are some of the findings collected by the authors:

  • All interviewees who had been involved in the development of a MOOC reported the effort being “two-to-three times greater than creating a traditional course.”
  • To create 10 minutes of voice-over-PowerPoint video required 6-8 hours according to an interviewee at a private university.
  • MOOCs were considered more time-consuming compared to traditional online courses due to MOOC-specific components such as high-quality video, quizzes to substitute instructor-graded assignments, and peer-to-peer learning technologies.
  • The authors “frequently heard estimates in the order of 400 hours of faculty member time per MOOC developed, the equivalent of 26 percent of an academic year.”
  • Computing and Internet services for on-campus students participating in MOOCs may need to be increased or upgraded, for example, help desk support and retrofitting buildings to provide enough bandwidth capacity for many students to simultaneously stream or download video.
  • Institutional websites and LMS’ need to provide an access point to relevant MOOCs.
  • A variety of admin offices are likely to be involved in activities such as obtaining copyright permissions and establishing contracts between the institution and online platform provider, and between the institution and its faculty members to address intellectual property rights, revenue sharing, faculty compensation, and workload issues. Compliance and disability regulations must also be considered.
  • For institutions providing credits for MOOCs, students’ admissions, registration, billing authentication, and crediting systems need to be aligned with platform enrollment procedures.

(Next page: A snapshot of costs)

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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