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e-Learning:markets and pricing

Understanding them?

Paul Bacsich

“Financial considerations for e-learning projects”, Birmingham, March 2004

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Contents Myself

Some costs-related reminders

Assessing the size of the market

Business plan

The commodity value of e-learning

Funding Councils’ funding of e-learning

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Myself 1

Currently two main part-time roles Director, Matic Media Ltd Director of Special Projects, UK eUniversities

Worldwide Limited: research and competitor research on virtual universities and MLEs

And some other bits and pieces: External Examiner for several distance learning

programmes Treasurer, Association for Learning Technology Member of JISC Committee on Networking

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Myself 2 – formerly Jobs:

Professor of Telematics and Head of Dept of Networks and Multimedia, Sheffield Hallam U - several DL courses

Many years at Open University finishing up as Assistant Director, Knowledge Media Institute

Roles: Several “costs of e-learning”, evaluation and policy studies

for EU, JISC, HEFCE, LSC, DfES Many years work on “virtual university” analyses, especially

critical success factors E-University studies for HEFCE since 2000 Ran several big projects in e-learning including the SHU

Virtual Campus

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Some costs-related

reminders

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Problems of different perceptions There is slowly increasing agreement on the

methodologies of costing e-learning So why is there a dilemma where Education see

“No Significant Difference” whereas Training sees “Return on Investment”?

The challenge is to find a uniform evaluation/planning methodology, including costs, which copes with a world without borders

Borders are not only geographic

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Hidden Costs – the bane of financial planning

Increased telephone call and printing bills for students due to Internet usage

Entertainment expenses “necessarily” incurred by staff at conferences but not reimbursed

Administrator time answering student queries Support costs of a new Learning Environment Costs of content - “created in one’s spare time” Costs of institutional collaboration Costs of conformance to standards

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The other stakeholders

Stakeholder dimensionExpendituredimension Institution Student Staff

Total

Staff costs

Depreciation

Expenses

Overhead

Total

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Course Lifecycle Model

Planning and Development

Production and Delivery

Maintenance and Evaluation

Three-phase model of course development

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Assessing the size of the

market

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Hard data “Hard data on student demand for distance

learning in overseas countries is difficult, if not impossible, to locate” (Fielden, 2000, for HEFCE)

Commission your own research, do not share Do not be a slave to market research. A lesson of

the dot.coms: products can create markets “Brand” is elusive, time-lagged and subject-

dependent What would you do if you found 1,000 students? Do not assume your (country’s) pedagogy will

transfer

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Competitor research Whatever the size of the market, it will usually be

contested - there are few unoccupied niches Attractive subjects, eg MBAs, are over-contested

Focus on student preferences, views, including value proposition to them

Make sure you compare like with like - what is an MSc?

Try to track non-sales (dept store analogy) global pricing is rare; global syllabi also

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Business Plan

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Can use HEFCE’s planning model

Sensing a gap in the market, now that many Arts graduates (e.g. at the BBC) have PCs and are on the Internet, Dr Carter at the University of Rother Bridge has got approval to mount a totally

online course on Post-Deconstructionism as part of her new distance learning MA on “Radical

Philosophies”.

Phase Types of task

Planning & Development

Read the latest works on the topic, listen to a new radio series, create lecture notes, set essay topics. Adapt her own research articles on “deconstructing gender - where next?” to be suitable to final year students. Put all this on the course Web site.

Ask the Computing Service to set up a Bulletin Board System. (They want to charge for doing this. She refuses, citing the departmental overhead.)

Production & Delivery

Make more material available on Web, such as topical items on Philosophy, moderate discussion groups online, receive and mark essays sent in by email. Set up “real” office hours for those students who live nearby.

Maintenance & Evaluation

Students want some “synchronous” online events; so must get technician to find out about RealAudio and record some lectures for next year. Also worried about the new OU global course in this area; how can she differentiate her course? (What about her students at the BBC?) Can she write something about this in a journal and count it for the next RAE?

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The commodity value of e-learning

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What does e-learning content cost?

average £12000 per study hour, but very large standard deviation

10% of this for simple material could one aim for < £1000 per study hour?

This is still around £8000 per CATS point.

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Rule of thirds

1: Study of “engaging” multimedia: expensive

2: Study of existing or slightly modified (learning) resources: mid-price

3: Working on assignments (maybe in collaboration): cheap

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How to reduce the price Forget research Go for templates Economies of scale: long runs of similar

material Professionalism Outsource to specialists (outside HE/FE) Outsource development - and support - to

cheaper countries close to UK culture (provincial Canada, Australia, New Zealand)

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Funding Councils’

funding of e-learning

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Funding councils - issues

Different home nations I shall focus on England

Different post-16 regimes (HE and FE) Different policies at different times

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Funding councils - HEFCE Funding (for operational courses) is now by

formula, mode-neutral (but not subject-neutral – discuss…)

Not quite true… Access premiums Studies on differential effects, in particular

“The costs of alternative modes of delivery” (JM Consulting, August 2003)

One suspects a slow drift away from mode-neutrality, perhaps preceded by complex premiums

Lots of HEFCE funding for development and special initiatives in e-learning (TLTP, CETLs, etc), and the ongoing IT aspects (JISC, JANET)

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Funding councils - LSC Funding (for operational courses) is by complex

formula, but NOT mode-neutral Several studies to think about simplifying this Some LSC funding for development and special

initiatives in e-learning (not as much as for HE – if one excludes Ufi?), and the ongoing IT aspects (JISC, JANET)

Issues What about Foundation Degrees, HE in FE, etc?

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Funding councils - DfES DfES e-Learning Strategy The overarching strategy under which HE and

FE (and ACLs now) will operate Beginnings of integration of schools, via the

borderlands (6th form colleges) – UKERNA, etc Studies on long-term embedding and

sustainability of e-learning One suspects this means “no special money”

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Further reading(on costs)

http://www.shu.ac.uk/cnl/

Thank you for listening

Paul Bacsichpbacsich@ukeu.com

paul@matic-media.co.uk