Aswath Damodaran, professor of finance, Stern School of
Business, New York University, doubted massive open online courses (MOOCs) were
actually going to be the “next big thing” in education. Then, he watched as the
initial buzz over MOOCs gave way to criticism about completion rates, which has
some administrators ready to scrap the idea entirely.
That would be a mistake on the level of record
companies celebrating the demise of Napster only to have Apple iTunes blow the
industry apart just a few years later, according to Damodaran.
“The MOOC model represented the first serious foray of
online entities into education and, like Napster, it failed because it not only
came with flaws, but because its promoters failed to fully understand the
business it was trying to disrupt,” he wrote in a column for eCampus News. “It is also worth
nothing that the failure of MOOCs really rests on your definition of the word
‘fail.’”
Damodaran points out that his own MOOC on corporate
finance had a completion rate of about 10%, but also saw more than 50,000
people registered, meaning around 5,000 individuals finished the course. Those
are enrollment and completion numbers that would take years to achieve in a
traditional classroom.
The problem lies in the perception of what college tuition
actually pays for, and it’s not always about education. According to Damodaran,
colleges and universities are really more than just a collection of courses
taught in a classroom. He points to networking, career advice, and
entertainment as part of the bundle.
“As my third child went off to college last year, I had
a chance to revisit the question of what it is that you get in return for that
check you write out to the educational institution of your choice,” he said.
“The first thing to note is that universities operate like cable companies (and
other monopolistic entities) and force you to buy a ‘bundled product,’ whether
you want the individual piece or not. The second is that classes are only a
piece, and perhaps not even the most critical piece, of the ‘education’
bundle.”
