Inside the Coursera Hype Machine

Inside the Coursera Hype Machine

The company has attracted tens of millions in venture capital—but if you’re looking for the Amazon of online higher ed, try iTunes U.


Coursera founders Andrew Ng and Daphne Koller. (AP Photo/Jeff Chiu)

The quest continues among venture capitalists to find the next Facebook, the next Google, the next eBay—and the Silicon Valley hype machine is suggesting that it might be Coursera, the “leader of the pack” among companies trying to make money with massive open online courses, or MOOCs. The hype, and the money behind it, are creating new pressures on colleges and universities to replace faculty members in the classroom with online video lectures. That, they say, would bring the genius of the free market to higher education by reducing labor costs (i.e., professors) and introducing economies of scale (teaching tens of thousands of students in a single course). Time magazine included Coursera’s two co-founders on its 2013 list of “The 100 Most Influential People in the World,” and Inc. magazine named Coursera one of its “25 Most Audacious Companies” this year. Since April 2012, Coursera has raised $65 million in venture capital; investors include Yuri Milner, the Russian billionaire whose earlier picks include Facebook, Zynga and Twitter. One IBM director declared that “Coursera will be the Amazon of this industry.”

Coursera, which claims that 4.5 million people have registered for its 431 courses, has a lofty mission statement: “We envision a future where everyone has access to a world-class education that has so far been available to a select few.” That’s an appealing idea for the millions who can’t afford or get into elite colleges: students in MOOCs could learn online from legendary lecturers like Simon Schama on British history or Robert Hughes on modern art, instead of some boring mediocrity on the faculty at State U. This will appeal to students, it is said, because they won’t have to go to class; they can watch the lectures on their laptops, anytime and anywhere they want. It’s win-win for everybody, except the professors who will lose their jobs. (Disclosure: I’m a professor.)

But it turns out that the millions of college students who need credits to graduate don’t need Simon Schama or Robert Hughes; they need Algebra 1 and Economics 1 and English Composition. If they find those courses difficult and boring in the classroom, imagine what it’s like watching them on laptops, alone—even with lectures by the Simon Schama of Algebra 1. But if Coursera is going to make money, it will have to be from those kids—and how do you make money if your product is free, as Coursera’s is? Maybe that’s why Inc. said the company’s next big obstacle is “finding a revenue model that satisfies investors.”

There’s nothing new about free college lectures online; thousands of courses have been available for a while now at iTunes U and on YouTube. If you’re looking for the Amazon of online higher education, forget about Coursera; it’s iTunes U, which reported in February that downloads of its courses had topped 1 billion. iTunes U has 1,200 college and university partners compared with Coursera’s eighty-five, including such schools as Stanford, Yale, MIT, Oxford and the University of California, Berkeley. Berkeley alone offers eighty-six courses on iTunes U, including Thomas Laqueur’s famous lectures on European history from the Renaissance to 1989. Yale offers sixty-eight at iTunes U through its “Open Yale” program, including David Blight on the Civil War and Reconstruction. Harvard offers some of its most famous professors at iTunes U as well, including Michael Sandel’s lectures on justice. Another popular course, on general chemistry offered by Ohio State professor Matthew Stoltzfus, had an enrollment of more than 100,000 the first year it was offered. The most popular courses on iTunes U enroll as many as 500,000 students.

The iTunes U courses are downloaded; YouTube offers thousands on streaming video. Neither offers anything like the Coursera system, in which a particular course starts on a specific date, with video lectures uploaded every week (although the iTunes U iPad app offers some “in-session” classes with a specific start date). Nor do they offer Coursera’s forums, where students are invited to pose questions and provide answers, or Coursera’s paper assignments and grades—but the value of those is questionable (see my experience, below).

People have been trying to make money with online courses for years. Those familiar full-page magazine ads for “The Great Courses” offer online videos, but for a hefty price: Gary Gallagher’s University of Virginia course on the Civil War, for example, costs $440 for forty-eight lectures. But that approach has never attracted big-time venture capital. And lots of colleges have extensive online course offerings for which they charge tuition. Oregon State, for example, offers 900 courses online for credit. But these are not MOOCs, because they are not massive or open. You register with the school, pay tuition, work with faculty in their courses and earn credit toward a degree.

With Coursera, however, you don’t get credit toward a degree. In fact, to sign up for anything with Coursera, you have to agree to the terms, which include the following: “You acknowledge that…Coursera’s Online Courses will not stand in the place of a course taken at an accredited institution, and do not convey academic credit.” That’s not a problem for the vast majority who have signed up so far. As co-founder and co-CEO Daphne Koller concedes, they are “people who already had degrees and wanted to continue their education.” Many seem to be retired. Coursera is great for them, and so are iTunes U and YouTube. But the big hope for Coursera—at least, the big hope for those investors—lies in signing up millions of college students who want a degree.

Coursera has announced that some schools can now offer credit, but the number turns out to be shockingly low—and the number of students actually receiving credit seems to be close to zero. In the fall of 2012, Colorado State University–Global Campus became the first US college to offer credit to students who passed a MOOC, but in the summer of 2013 it announced that not a single student had signed up—despite the fact that it was a really cheap way to earn credits: $89 instead of the $1,050 tuition for a three-credit course on campus. Antioch University Los Angeles, which has no tenured faculty and only about 200 undergraduates, announced last fall that it would offer credit for two Coursera MOOCs. I e-mailed the director of communications, Joanna Gerber, asking how many students had enrolled, but she didn’t reply. The Council for Adult and Experiential Learning, based in Chicago, helps adult students get college credit for nontraditional learning experiences. Their program, called “LearningCounts,” reported in July that only one student who completed a MOOC had received credit toward a degree—at Excelsior College, a nonprofit online institution. And according to The Chronicle of Higher Education, not a single person in that program even attempted to get academic credit for a Coursera course—or for courses from rivals edX or Udacity, for that matter.

Coursera’s big hope for making money comes from attracting students to content supplied by a growing roster of prestigious partner institutions. The list now includes Columbia, Yale and the University of Chicago. But these institutions are not offering course credit to their own students who enroll in Coursera MOOCs, or to anybody else: they are simply providing videos of lectures for anybody who wants to watch—some of which are already available on iTunes U and YouTube.

Coursera announced that things were looking better last winter when the American Council on Education, which represents college and university presidents, said it would recommend that colleges grant credit for the successful completion of five Coursera offerings. But as The Wall Street Journal pointed out, “Whether schools follow that suggestion remains unclear. Even the three institutions whose instructors teach those online courses [Duke, the University of Pennsylvania and the University of California, Irvine] don’t plan to award credit” to their students who complete the MOOCs. A handful of other schools have agreed to award credit as recommended by ACE, but it’s not for regular students enrolled in degree programs; it’s for a pilot program “evaluating the applicability” of ACE’s credit recommendations for “adult learners” taking MOOCs.

There’s one other problem for Coursera and the other MOOCs trying to make money: 90 percent of the people who enroll in courses do not complete them. Watching video lectures on your laptop at home alone doesn’t seem to work for the overwhelming majority of people who try.

To find out how Coursera works, I recently signed up for a course in my own field, history. The course was on the Holocaust and taught by UC Santa Cruz professors Peter Kenez and Murray Baumgarten. The lecture topics and reading assignments were outstanding, but it turns out that this course, like other Coursera offerings, is nothing like the “world-class education” promised in the company’s mission statement. Coursera co-CEO Koller says they can do better than “the default form of college classes—a professor standing in front of her students, lecturing for an hour.” But the lectures on the Holocaust were nothing more than video of the lecturers standing in front of a class and lecturing for an hour. There was no attempt to intercut the lecturing with visual material, film clips, illustrations, interviews or anything else, and the audio quality was often pretty bad. To young eyes familiar with action movies, fast-paced TV shows and video games, this looks practically Paleolithic. And although the UC Santa Cruz name and seal appeared on every page of the course website, there was no way for Coursera students to ask questions of the two Santa Cruz professors. Instead, students were encouraged to ask each other, in the online “forums.” Then the students voted on the best answer. If you don’t think that’s a good way to learn, you don’t belong in a Coursera course.

At the end of the first week of class, the forum had 313 posts discussing the lectures—out of 11,000 students enrolled. The first lectures were on “Witnessing,” and the 313 posts were responding to a query from the course coordinator, “What does witnessing mean?” In the most popular answer, a student said that when he read about the Holocaust, “I suffer, I cry, I become anguished”—and thus the writers are “making us also witnesses.” The lecture in question, however, was about something quite different: “the problem of representation” for witnesses and “the limits of language and knowledge” in trying to explain their experience. Not a single one of the posts mentioned those issues.

The next three lectures had a total of only forty-two posts, all on the same issue: the poor audio quality. The next-biggest thread consisted of people complaining that the quizzes about the videos didn’t recognize correct answers. The course coordinator replied, “The trick to getting the computer to recognize your answer as ‘correct’ is to recycle the same terminology you hear in the lecture video.” Students then protested that they were not “parrots.”

The course also had writing assignments. The topic of the first paper was uninspired: “write a brief (500–700 words) response about any of the video lectures you have encountered so far. Rather than just telling what your opinion is…make a critical statement that reflects on the themes, phrases and ideas presented in each video.” The students are supposed to read and grade one another’s papers, using criteria provided by Coursera. Peer grading provokes the most complaints from students in MOOCs.

I asked one of the two lecturers, Peter Kenez, about working with Coursera on this course. It turns out Coursera had nothing to do with the design, structure or look of it. The video was shot not by Coursera but by UC Santa Cruz, and not for Coursera but rather two years earlier, before Coursera was created, when the course was offered on campus. “The film already existed,” Kenez said, “so we didn’t have to do anything. They hired our TA to put together the material at their website; we had nothing to do with that.” He said he had never looked at the Coursera video. As for the forums, the writing assignments, the student questions and student problems, “I have nothing to do with any of the online activity,” Kenez told me. “I haven’t even checked in. I have nothing to do with the evaluations.”

And he didn’t get paid. He did it, he said, because “it cost me nothing. And whatever the students get out of it, I am all for it.” Finally I asked Kenez why UC Santa Cruz went with Coursera instead of one of the nonprofits or iTunes U. “Somebody on campus, the head of the computer science department, knew the Coursera people, and suggested that they approach us,” he said. “That’s how it happened.”

(Michael Roth, president of Wesleyan, offers a better Coursera course with “The Modern and the Postmodern”—intellectual history and theory from Kant and Rousseau to Judith Butler and Slavoj Žižek. The video alternated between two cameras on the lecturer and included some beautiful illustrations. Roth’s style is also more conversational and directed at the video audience. He sent his own weekly e-mail to enrolled students and initiated some forum threads himself. But the discussions in the forums for that course included fewer than 100 students, out of the 13,000 enrolled.)

Coursera knows its investors want to see progress toward making money. CEO Koller offered them some hope in May, telling The Wall Street Journal that “our verified certificate program, which we launched in January, is actually doing pretty well. We’ve had well over 10,000 people opting into this. We have made close to $500,000 in a few months.” That program gives students a certificate stating that Coursera has verified the identity of the person completing the course work. But it’s highly unlikely that colleges and universities will give credit toward degrees for them. Indeed, the text of the certificate states explicitly that it’s a noncredit course.

The basic problem with the verified certificates, indeed with all MOOCs, was acknowledged by “some college administrators” in the Journal in a surprisingly blunt statement: “it’s difficult to verify that students learned anything in MOOCs.” The best way for schools to do that is to employ their own assistants or adjuncts to grade papers and exams for online students. But then it’s not a MOOC anymore: it’s not open, and it’s not massive. If all that a school needs is online lectures, it doesn’t need Coursera, since iTunes U and YouTube already offer thousands of lectures.

Other moneymaking possibilities are described in Coursera’s contract with the University of Michigan, obtained by The Chronicle of Higher Education under a Public Records Act request. That contract includes a section titled “Possible Company Monetization Strategies”; one of them is to run banner ads on course webpages. The best bet for making a profit—outlined in a new Coursera contract with the University of Kentucky, also obtained by the Chronicle—would be for Coursera to get paid not by students seeking “certificates of completion” but rather by schools offering their courses: for a $3,000 flat fee, plus $25 per student for the first 500 students, $15 for the next 500, and so on. Material that students could get for free on the Internet would be sold to them by their college, in exchange for credit toward a degree. You might call that a rip-off, but it could be the business model for higher education in the future.

Of course, there are plenty of forces beyond Coursera pressing colleges and universities to save money by replacing faculty members with video lectures. But the pressures become considerably more intense when powerful people look forward to making big profits. As it becomes clear that Coursera will not be the next Amazon, we will be closer to having a rational discussion about the best ways to help students at nonelite schools fulfill requirements for graduation—and maybe even learn something along the way.

Editor’s Note: This piece originally stated that neither iTunes U nor YouTube offer anything like the Coursera system, “in which a particular course starts on a specific date, with video lectures uploaded every week.” This sentence has been corrected to reflect that the iTunes U iPad app offers some “in-session” classes with a specific start date.

Also in this week’s issue, David L. Kirp asks if massive open online courses are the utopia of affordable higher ed—or just the latest fad, in “Tech Mania Goes to College.” 

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