This dissertation is the first piece of empirical work I am aware of that demonstrates clearly that a distance learning program can simultaneously (1) provide a significant public good by publishing opencourseware and (2) be revenue positive while doing it. In other words, Justin’s study not only demonstrates that it is possible to publish opencourseware without requesting donations from users or foundations, it goes further and demonstrates that it is possible to make money publishing opencourseware. And if you can make money publishing opencourseware, you can continue publishing opencourseware for a very long time. This capacity is also known as sustainability.

Congratulations to Dr. Johansen!

P.S. John Hilton will be defending his dissertation, which applies a similar methodology to examine the impact of giving away free e-books on the sales of printed books, February 11!

In that post I invited people to send me more current information if they had it. Both Ryan and Steve Carson of MIT OCW accepted the invitation and provided more updated financial data. (In his reply, Steve good-heartedly suggested that I’m poor at math. My math was correct based on the numbers in Ryan’s article; I think Steve meant that I should redo my calculations based on more recent numbers.) So here we go.

In an article both Ryan and Steve suggested, called OpenCourseWare: Working Through Financial Challenges, we read:

To date, this effort has been funded by a combination of grant funding (41% of FY 2009 expenditures and 72% of total OCW expenditures since inception), Institute funds (49% in FY2009 and 22% of total to date), and donations and other revenue (10% in FY2009 and 6% of total to date).”

Using the FY2009 numbers, and the total of $3.6M for FY2009, that breaks down as follows:

MIT Internal funds – 49% – $1,764,000
Grants – 41% – $1,476,000
Donations, Amazon.com affiliate revenue, and all other sources – 10% – $360,000

This is a much better scenario for MIT OCW than the one suggested by the overall “since inception” numbers Ryan originally reported in The Tech. Still, 40% is a huge percentage of one’s budget, and MIT OCW is not out of the woods. The articles states:

In the next two years the grant funding that has supported OCW since its earliest stages will run out, and foundations generally do not provide new funding to support ongoing operations. Meanwhile, Institute funding has become tighter with the financial downturn, and like all units at MIT, OCW is under pressure to further reduce its reliance on the General Institute Budget. In the current economic climate, it is increasingly difficult to attract corporate support.

I didn’t realize this, but the article also states that MIT OCW has already cut its production activity in half – from publishing / updating 400 courses per year for five years to now publishing / updating only 200 courses per year.

However, none of the above items are the most interesting thing contained in the report, authored by Cecilia d’Oliveira and Steven Lerman. The most interesting thing of all (to me) was the following:

Proposals for generating revenue based on OCW are also reflected in the Institute-wide Planning Task Force Report [unfortunately, "You must log in to view the report."]. These ideas include various types of certificate, credit, or degree-granting distance education programs that rely on the OCW materials. At this writing, a pro bono team from management consultants Bain & Company is helping us assess the Working Group’s ideas in terms of their potential for financial return, alignment with OCW’s core principles as well as the perceptions of OCW’s stakeholders and users, and the cost of implementing those ideas.

As you may recall, this past May I wrote a post on The Future of OCW in which I forecasted that:

Every OCW initiative at a university that does not offer distance courses for credit will be dead by the end of calendar 2012.

BYU has already demonstrated a profitable “Click to Enroll” business model where OCW materials are used simultaneously as (1) a public good, and (2) marketing materials for credit-bearing programs. There is anecdotal (but positive) evidence from the Click to Enroll experiments at UC Irvine, the OU UK, and the OU NL (these are described in the BYU study). Reducing the cost of OCW development isn’t enough to make the program sustainable – I still contend that the OCW program has to generate real revenue in order to be sustainable.

If MIT OCW is going to adopt a “Click to Enroll” business model, then chances are that we can stop worrying about its sustainability. In fact, if MIT OCW goes C2E, they can probably become entirely financially self-sustaining, without relying on donations or the institution. They already take the lion’s share of OCW traffic, and despite the nature of their course offerings (e.g., the lowest math they offer appears to be single variable calculus) MIT OCW will likely take the lion’s share of the OCW Click to Enroll revenue, too.

The BYU study found that over 2.6% of all OCW site visitors chose the Click to Enroll option and became paying customers enrolled in formal online courses. Can you imagine the revenue generated by applying BYU’s conversion ratio to MIT OCW’s million visits per month? With a conservative tuition of $400 per class, that’s revenue of over $10,000,000 per MONTH. Even with a terribly low conversion rate of only 0.1%, they would still generate almost $5,000,000 in revenue per year.

As always we’ll all be watching MIT OCW closely and hoping for their success. As the article says, “More than 250 universities have committed to openly publishing course content in the OCW model.” Hopefully that will soon mean the Click to Enroll model, and OCW will become a sustainable fixture at all universities.

Since its creation, 22 percent of OCW’s expenditures have been covered by the Institute, 72 percent has been paid for through grants from the William and Flora Hewlett Foundation and the Andrew Mellon Foundation, and 6 percent has been covered by donations, revenue, and other sources.

(His article states that these numbers are “since it’s creation,” but they’re the best breakdown of numbers I know of. If you know of a similar breakdown for MIT OCW’s 2009 finances, please drop a link in the comments below.)

If we work these numbers out, each year that’s roughly:

- $2,952,000 for 72% covered by Hewlett and Mellon,
- $902,000 for 22% covered by MIT internally, and
- $246,000 for 6% covered by donations, corporate sponsors, Amazon.com affiliate revenue, and all other sources of revenue.

Ryan’s article is an extended argument for why MIT should continue to support OCW after its grant funding runs out in two years. I (and I expect most readers of this blog) agree with the importance he places on the project and the very important public good it has become. More importantly, MIT OCW is terribly important to the broader field of open education.

Because MIT OCW receives such a large percentage of the OCW world’s traffic and media attention, potential problems for MIT OCW are potential problems for all of us.

I keep asking myself how you support a project when 3/4 of its funding is pulled out from under it. Two years is not that far away. And it already feels like I’m getting a “Please remember to donate to MIT OCW” email once a month. On 25% annual budget, what would MIT OCW do? If MIT OCW were to go into stasis (like USU OCW recently did), how would that be viewed by the world?

More importantly, what is Plan B for the broader OER field? Imagine that two years from now MIT OCW announces drastic cutbacks (or temporary suspension) of its program. How do the rest of us argue for open sharing on our campuses then? Perhaps these arguments would revolve around the sharing model, or the way sharing happens – “we’ll do it differently in the following way…” Perhaps they would revolve around business models and using OCW to generate revenue (e.g., by using them to market for-credit online courses). How else do we make the argument for open sharing on our campuses in a post-MIT OCW world?

I’ve already heard “just because MIT can do it doesn’t mean we can” about a thousand times from faculty and administrators. What if that becomes “Not even MIT can do it for longer than a few years…”

A few quotes and then some response:

Utah State University has announced the closure of its OpenCourseWare initiative due to budget woes. I call nonsense (or BS). Apparently OCW needed $120,000 per year. Given the size of Utah State University, I’m going to guess they have an annual operating budget somewhere in the range of $300-400 million. This is not a budget shortfall – this is a commitment shortfall. 120K is a fraction of a fraction in light of the larger university budget.

This illustrates my concern about centrally organized open educational initiatives – they have a single point of failure: funding…

The OER and OCW movement(s) are fundamentally flawed in where they assign openness. Openness is being treated as separate from curriculum development and delivery. Openness is viewed as an after market feature. And most universities aren’t too eager to pay for the extras.

George makes a critical point, and one that everyone needs to understand. The model I call OCW 1.0 he calls the “aftermarket” model. No matter what you call it, it’s impossible to sustain a program that incurs large, ongoing costs that are exclusive to OCW – which is why I predicted in the spring that the list of universities engaged in active OCW projects three years from now will look very different than it did back in May 2009 (yes, all the big names will be gone if they don’t completely reinvent themselves).

George writes, “Openness should be built into the process of curriculum design – it should be systematized.” In places where the process of curriculum design is practiced, like the campus teaching and learning center, this is absolutely true. However, how many faculty actually use such services? Unfortunately, the vast majority of faculty members don’t engage in a thoughtful process of curriculum design – they just do what they do.

In order for open education to reach its varied potentials, openness must become a core cultural value for each and every faculty member. This is a decade-long project if we’re lucky, and requires significant investment in faculty training (the way we had pushes on our campuses a few years ago to help everyone understand the importance of diversity). While we work on that (and we are working on that), the critical question for me is, what do we do in the ten years between now and then? Should we do nothing until we’re capable of doing it “right” in 2020, or are partial solutions (like OCW 1.0 and even OCW 2.0) better than nothing as we make that long journey?

Last summer, in preparation for the pilot, I set up WPMU 2.7 with the following plugins installed across the site:

- PageMash – http://wordpress.org/extend/plugins/pagemash/
Customise the order your pages are listed in and manage the parent structure with this simple ajax drag-and-drop administrative interface with an option to toggle the page to be hidden from output. Great tool to quickly re-arrange your page menus.

- Search Everything – http://wordpress.org/extend/plugins/search-everything/
This plugin increases the ability of the default WP search (including pages, tags, etc.).

- tags4page – http://www.michelem.org/wordpress-plugin-tags4page/
This plugin allows you to tag pages (posts can already be tagged).

- WPLicense – http://wiki.creativecommons.org/WpLicense
WpLicense is a plugin for WordPress which allows users to select a Creative Commons license for their blog and content.

- WP Pages Only – http://wordpress.org/extend/plugins/pages-only/
This plugin simply changes the default “Write” and “Manage” links in admin to go to pages instead of posts.

Just these few plugins make WPMU quite usable as a no-frills OCW platform. Obviously, this setup lacks the full functionality of something like eduCommons, but you can also migrate from version to version in seconds with a single Subversion command, and we know that this platform scales to tens of millions of pageviews per day (e.g., wordpress.com).

IPT 287 does a number of other interesting things with other plugins, like syndicating all student work into the OCW site using FeedWordPress. Charles also utilized the blog functionality of WPMU to do live announcements, etc., on the site – actually teaching his course off the OCW site. This is another part of the beauty of WPMU – per course functionality.

It’s summer again, which means it’s time for open.byu.edu’s WPMU install to get an upgrade to 2.8 and for me to look for additional plugins and bits of functionality that any self-respecting OCW platform should have. We’ll also be growing the scope of our pilot this year (after doing only two courses last year). I’ve already started chatting with the good Reverend about some of the additional functionality we’re going to need as our pilot expands in scope… But I’d love your thoughts, too. What do you think as WPMU as an OCW platform? What functionality is WPMU with above plugins missing that it desperately needs? Are there existing plugins that provide that functionality?

However, as we ramp up to include more participants this year I’ve started wondering about the URL structure of having multiple departments participate. What I would love to do is still assign one blog per course, but be able to organize these under “subdirectories” as follows:

http://open.byu.edu/ipt/692/

http://open.byu.edu/comd/411/

http://open.byu.edu/eime/515/

&c. You get the idea. I haven’t been able to spend a ton of brain power on it, but I can’t figure out how to get the /ipt/ or the /comd/ in the middle there. Any thoughts?

Also, I’m wondering what to do URL-wise about courses like IPT 692. This is an Advanced Issues seminar and is taught multiple times each year by different faculty. Multiple times each semester, in many cases. How should I proceed? /ipt/692/wiley/? And how should I archive these? /ipt/692/wiley/2009/fall/?

We average as many as 2,000 unique visitors to the site every day from all over the world. We have mirror sites up in Africa, China, and Indonesia (that we know of). Our site has been translated into several languages, and is the third most visited site on the usu.edu domain. Being the OCW director is something I’ve loved doing the last four years.

However, it is coming to a close.

Budget cuts have resulted in the program coming to an end. We’ve spent the last six months scrambling to find a way to keep the lights on. We’ve sought after state money, private money, grant money… We’ve found nothing, so as of June 29th, I will be starting a new job.

It’s heartbreaking to see the project come to an end. Hopefully, as Justin’s dissertation demonstrates that universities can provide a significant public good AND generate revenue at the same time through OCW, USU will reconsider its decision to shutter the program.

With help from many other supportive staff at COSL, Marion has admirably led this project to great heights in public service and has been responsible for bringing a significant amount of notoriety and public regard to Utah State University. Marion, thank you. God speed in your new efforts.

In the most unbelievable part of the history of openness in education (for me as a native West Virginian, anyway), West Virginia Senator Robert Byrd announced that his current term in office would be his last. (I think he was like 108 at this point.) His final piece of legislation would be a third Morrill Act that would support the land grant institutions in creating OCW-like projects to provide increased access to educational opportunity to the general public. The so-called “Byrd Bill” passed, creating a small pot of dedicated monies for public schools to draw on in order to support their OCW initiatives.

I suppose thinking that Byrd would introduce the bill was a bit too self-indulgent on my part, but today Inside Higher Ed is reporting on a U.S. Push for Free Online Courses. Byrd didn’t write the language himself, but it does appear to come during Byrd’s last term in office (unfortunately for WV):

Community colleges and high schools would receive federal funds to create free, online courses in a program that is in the final stages of being drafted by the Obama administration. The funds envisioned for open courses — $50 million a year — may be small in comparison to the other ideas being discussed. But in proposing that the federal government pay for (and own) courses that would be free for all… the draft language suggests that the administration is throwing its weight behind the movement to put more courses online — and offer them free.

If my predictions continue to be (largely) correct, we next wait to hear a deafening silence from the online curriculum and textbook publishing industries…

So far the results are very positive – 85 of the 3500 people who visited the OCW site last month registered for for-credit courses. In other words, 2.4% of people who visited the OCW site during its first month became paying customers of BYU IS.

The latest data say that we have now had 5529 visitors to BYU IS OCW and that 136 of those visitors have enrolled in credit-bearing courses. In other words, 2.5% of the people who have visited the OCW site have become paying customers. Remarkably stable, eh?

I’ve said before the BYU IS is in a remarkable position because of its prior commitments to improve student affordability. For many years now the BYU IS course development model has been to build content-complete online courses from scratch (without licensing external resources or requiring students to purchase any textbooks or additional resources) in order to keep the cost down for students. The traditional online course financial model successfully supports this strategy. So, since BYU IS owns all the IP in its courses, conversion to OCW format and open licensing is ~very~ inexpensive.

The cost data are not final, but it looks like the last batch of semester-long, content-complete online courses converted to OCW cost about $1000 a piece to convert. That’s $1000 to put a semester-long, content-complete online course into OCW under an open license – all the development, maintenance, and update costs are paid for by the traditional online course business model. As the course conversion process is refined, there is still room for that cost to go down.

When you put the visitor conversion rate together with the course conversion cost, you have a recipe for an opencourseware initiative that can pay for itself forever and bless the lives of millions of people. These two kinds of conversion (visitor conversion rate and course conversion cost) aren’t the kind of “conversion” we traditionally associate with BYU, but they do seem to be ‘working together for good’ (D&C 90:24).

Those of you who know me know that my passion and commitment to the open education movement come from my faith. As this is a Sunday post, I’ll take the liberty of sharing some of the scriptures that influence my thinking about open education.

14. Ye are the light of the world. A city that is set on an hill cannot be hid.
15. Neither do men light a candle, and put it under a bushel, but on a candlestick; and it giveth light unto all that are in the house.
16. Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven. (Matthew 5:14-16)

25. Behold, doth he cry unto any, saying: Depart from me? Behold, I say unto you, Nay; but he saith: Come unto me all ye ends of the earth, buy milk and honey, without money and without price.
28. Behold, hath the Lord commanded any that they should not partake of his goodness? Behold I say unto you, Nay; but all men are privileged the one like unto the other, and none are forbidden.
33. He inviteth them all to come unto him and partake of his goodness; and he denieth none that come unto him, black and white, bond and free, male and female; and he remembereth the heathen; and all are alike unto God, both Jew and Gentile. (2 Ne 26:25-33)

The BYU IS OCW experiment continues, and I’ll keep updating you all on it…