Although growing numbers of students are studying online, the increased competition and consolidation in the online education market is casting doubt on the expectations of colleges and universities that online learning will provide a much needed new revenue stream, according to EducationDive’s report on a new analysis by Moody’s Investor Service.
Creating online programs does open colleges and universities to entirely new populations of potential students well beyond their immediate area, but it also opens the same institutions to a wider range of competitors. As a result, a thriving online education initiative will require institutions to offer distinctive programs and/or distinctive services to stand out in a growing crowd of offerings. The alternative is to compete on price in an increasingly commodified part of the education sector.
The report also considers the use of online program managers (OPMs), companies that offer a range of services for universities to develop, operate, and market online programs. The experience with such providers appears to be mixed with results not always clear and fees taking a substantial part of the increased tuition revenue. As a result colleges are re-thinking the nature of such arrangements.
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