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Free online university courses: are 'Moocs' a gamble?

“Opinion is sharply divided on whether Moocs will prove a flash in the pan, or the beginning of the end for campus-based universities.”



Mike Boxall and Paul Woodgates

The Daily Telegraph

18 December 2012


Few people would bet on the prospects of a business that gave away its products, complete with customer support, free to anyone anywhere with an internet connection. Yet this is exactly what the Open University, along 11 other leading British universities, is offering with the new Futurelearn service announced last week.

Futurelearn is the latest in the wave of Moocs (Massive Open Online Courses) launched by consortia of world-ranked universities over the past year. New players like Coursera, Udacity and edX have recruited millions of students to hundreds of degree-style courses from top-name institutions, all for free.

Opinion is sharply divided on whether Moocs will prove a flash in the pan, or the beginning of the end for campus-based universities. And no one, including their own sponsors, seems clear just how they will earn their living.

So is this economic folly, or the Next Big Thing?

The precedents are not good. The UK e-University, set up in 2004 with a similar remit to market and deliver the “best of UK higher education” online, soon collapsed having consumed over £60 million of taxpayers’ money.

This experience has led UK universities to be wary of any similar collaborations – although many market their own online courses, usually for suitable fees.

But much has changed since the failure of the UK e-University experiment. The technology and markets for online learning are far more mature, as the remarkable demand for the first Moocs has shown. (Coursera has gained 1.5 million users since its launch earlier this year.)

More importantly, our understanding of how to make money through the World Wide Web has transformed.

Conventional thinking sees Moocs only as vehicles for delivering educational content over the internet, and wonders how the providers will get paid for their products. But some of the behemoths of the web – Google and Facebook, for example – charge nothing for their basic services, and have become some of the richest corporations in the world.

They realise that the real value of web-based information business comes not from the information but from the users – from having millions of people using your service platform and sharing intimate details about themselves, their interests, their behaviours and their needs. This intelligence is of immense value to third-party businesses, who last year paid Google $40 billion (£25 million) for access to it.

The real economic potential of Moocs lies not in the courses they make available, but the huge numbers of smart, ambitious and committed students that they can recruit. We are already witnessing the potential this creates, with Coursera offering employers access – for a fee – to the personal and study profiles of more than 1.5 million signed-up learners.

Other potential revenue sources include private qualifications bodies such as Pearson VUE or ACE offering accreditation services for these courses, and sharing the fees with the Mooc operators.

It is still very early days for the Mooc phenomenon, which has come from almost nowhere in just a year. It probably will not presage the demise of established universities, as some have predicted. But it will bring higher education irrevocably into the internet age, and change the rules of the learning game forever. 


Mike Boxall and Paul Woodgates are higher education experts at PA Consulting Group


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