Re: The business of education
Stephen Downes, Martin Weller, Tony Hirst, and Gary Lewis have all been having an intriguing discussion on the business of education. Martin started it off with a great post proposing different business models (advertising, affiliates, sponsorships etc.) to support free eLearning. Stephen responded by suggesting that eLearning should be free and should not be monetized. Gary Lewis summarized things and asked them both to add more detail. I’m jumping in now because we have been struggling with this very issue for the last year.
We finally decided that you need multiple streams of revenue to be able to support a system that can ultimately empower education for everyone. The overhead is just to high to be able to do it for free without advertising or some other type of monetizing strategy. Many people don’t realize it, but running a web-based business is pretty expensive, especially if that business scales so that even a fraction of the people on the planet utilize it. Moore’s law does help with storage costs, but, still, in an increasingly video intensive context, storage and bandwidth costs are very, very, high. Additionally, if you want to provide a service that is reliable and one that educators and academic institutions feel comfortable using, then you have to make sure you can offer a decent SLA (guaranteed 99% uptime etc.). That means you have to have reliable datacenters, co-location, and people on hand to help if the site goes down or gets hacked (eg., slideshare.com with its recent bouts of denial of service attacks). These are just the basic costs and don’t even begin to cover design and engineering costs, particularly if you want to do something really innovative.
So, I guess I’m adding my thoughts to the mix. I’d love to see a platform that provided free education for all, but I just don’t see how it can happen without advertising or other revenue generating strategies. I’m with Martin in that I “don’t have the imagination” to visualize it occurring. The overhead is just too high.
That said, monetizing strategies are not inherently bad. There is much good that occurs through business processes. Paul Graham has a phenomenal video here where he talks about the brilliance of being a benevolent business. He uses several illustrations, but perhaps the most poignant is his Google example. He rhetorically asks something like, “Would Google be as good as it is if it were a ministry or non-profit?” The answer is no. It wouldn’t be such a great resource if it were a non-profit. So, even though Google is a business that uses advertising as its sole monetizing strategy, it provides an amazing amount of value to people everyday. It uses that revenue to provide new services that really help people (think Gmail). I, for one, am happy to use Google’s services and I don’t mind the advertising in the least, because I see it in the larger context. They are providing great tools for me for free. Graham’s hypothesis is that this model is ideal for both users and companies. It is a true win/win. We certainly think so.
