According to a new report by market research provider Sandler Research, the global MOOC market is expected to grow by 56.61% CAGR between 2014 and 2018. CAGR, or compound annual growth rate, is a commonly used method to calculate the average return of investment funds.
Analysts state that they key driver of this growth will be the increasing cost of education, while the key challenge is the courses’ low completion rate. Interestingly, they identify the key market trend not as providing flexible, free (or low-cost) pathways to education, but rather as the big data tools and analytics that MOOCs make possible. As state in the PR: “Universities are turning to MOOC providers for large student data analysis. Examination outcomes and assignment grading are made easy with MOOCs because of the online nature, which is otherwise a slow and tedious procedure with traditional data gathering techniques. The records are easily managed with big data tools, giving educators the advantage of real-time data management.”
The idea that big data tools and analytics are what is attracting universities to MOOCs represents a possible new source of revenue for MOOC providers. As of now, the monetization models that have been made public depend mainly on selling verified certificates of completion and licensing the courses. However, this also raises the issue of who exactly owns MOOC data—the university or the MOOC provider—which has been the source of some controversy and debate.
The report analysts also note that low MOOC completion rates (averaging 7% in 2013) are mainly due to the “lack of motivational factors such as college credits or certifications.” These issues are currently being addressed by universities, MOOC providers, and accrediting agencies, and in the next five years, the credit and certification landscape will likely have changed significantly.