The Rise and Fall of Free MOOCs: How Monetization Imperiled the Promise of Open Online Education

The year was 2011. Stanford professor Sebastian Thrun launched his "Introduction to Artificial Intelligence" course online for anyone to take, free of charge. Over 160,000 learners from around the world enthusiastically signed up. Thus began the Massive Open Online Course (MOOC) revolution.

MOOCs were hailed as a game changer for higher education. The New York Times declared 2012 "The Year of the MOOC" as elite universities raced to partner with providers like Coursera, edX, and Udacity. The premise was simple yet transformative: provide free, high-quality online courses from top institutions to anyone in the world. MOOCs promised to democratize education and disrupt the ivory towers of academia.

Fast forward a decade later, and the reality looks quite different. MOOCs have largely abandoned the "open" and "free" parts of their name as they‘ve shifted to monetization via paywalls and premium services. What was once a utopian vision of accessible education for all has morphed into yet another freemium online content business.

The Heyday of Free MOOCs

In the early 2010s, the excitement around MOOCs reached a fever pitch. Platforms like Coursera, edX, and Udacity launched with millions in venture funding and high-profile university partnerships. Learners flocked to these platforms by the millions to sample courses on everything from machine learning to music history.

From a technical perspective, MOOCs were a marvel. They allowed for interactive learning experiences to be delivered at an unprecedented scale. The key innovations included:

• Video lectures chunked into short, engaging segments
• Interactive quizzes and assignments with instant feedback
• Peer grading and discussion forums for learner interaction
• Sophisticated analytics to track learner progress and improve content

Behind the scenes, MOOC platforms were tackling immense infrastructure challenges. Delivering streaming video and real-time assessments to hundreds of thousands of concurrent users required cutting-edge cloud architectures. Many MOOCs leveraged third-party services like YouTube and Amazon Web Services to handle the immense traffic loads.

In the spirit of openness, some MOOCs open sourced their technology and content. edX released its entire software platform as open source to allow other institutions to launch their own MOOCs. Some instructors chose Creative Commons licenses for their course materials to enable reuse and remixing.

The hype around free MOOCs peaked in 2012 with the launch of dozens of new courses and partnerships. A frenzy of experimentation followed as instructors and institutions put their own spin on the MOOC model. Some used MOOCs as digital textbooks; others simulated entire virtual classrooms. Fan communities sprouted to extend MOOC learning, like in-person study groups and course wikis.

The Shift to Monetization

But as the MOOC hype cooled, the sustainability question loomed large. How would these ventures keep the lights on while giving everything away for free? The cost of creating MOOC content and maintaining the platform was substantial. Estimates put the average cost per MOOC at around $50,000 to $100,000.

Investors and university partners began pressuring MOOC providers to find a path to profitability. The answer, borrowed from other corners of the Internet economy, was freemium. Let a portion of users access limited content for free, while enticing a percentage to pay for premium features like certificates, graded assignments, and coaching.

The turn to freemium started gradually around 2013. Coursera was one of the first to roll out a "Signature Track" where learners could pay a fee (typically $30-$100) to earn a verified certificate. The percentage of "paid certificates" slowly crept up, while the availability of free ones declined. By 2016, the majority of new Coursera courses only offered paid certificates.

Other MOOC providers quickly followed suit with their own monetization tweaks:

• edX kept certificates free but started charging for graded assignments and course content access beyond the scheduled course period
• Udacity pivoted to focus on paid "nanodegrees" for specific career skills, with very limited free offerings
• FutureLearn instituted a paywall for content access more than 2 weeks after a course ended

The paywalls kept expanding to cover more and more of the core MOOC experience. Graded assignments, once seen as essential for pedagogical rigor, became a premium feature on most platforms. Even access to lecture videos in some courses now requires payment. The "open" in Massive Open Online Courses seems to be hanging by a thread.

From a technical perspective, the freemium shift meant MOOC platforms had to develop sophisticated payment processing, user segmentation, and access control systems. Significant engineering effort went into creating friction-free upsell flows and thwarting workarounds to access premium content for free. The open source ethos of MOOCs‘ early days gave way to proprietary codebases aimed at maximizing conversions.

The Consequences of Paywalled Learning

The impact of MOOCs‘ monetization pivot has been largely detrimental to their original mission of expanding access to education. Putting the core features behind a paywall has limited MOOCs‘ reach to those who can afford to pay.

A study of MOOC learner demographics found that in emerging economies, over 80% of learners come from the wealthiest 6% of the population. Paywalls pose an even greater barrier to entry for these learners. A $50 certificate fee may seem reasonable to a learner in a developed country, but could be prohibitively expensive for someone in a developing nation.

Even putting aside ability to pay, the complexity of MOOC pricing schemes can itself be a deterrent for many learners. Each platform has its own mix of free vs paid features that seem to be constantly changing. A course that appears free at first may later require payment to access key materials or earn a credential. This "paywalled pedagogy" adds friction to the learning process.

The paywall model has also skewed MOOC content toward more lucrative topics and learner segments. Courses in business, technology, and other high-demand professional skills dominate because those learners are more likely to pay for certificates and upsells. More niche academic subjects have become scarcer in the MOOC ecosystem.

Despite the paywalls, completion rates for MOOCs remain abysmal. Less than 7% of learners who enroll in a MOOC end up completing the course. Completion rates are even lower for learners from developing countries. While there are many factors behind this leaky funnel, paywalls certainly don‘t help. Hitting a payment gate mid-course can quickly derail a learner‘s motivation.

The paywall model has also given rise to a spate of MOOC-adjacent businesses that aim to serve budget-conscious learners. Third-party sites offer unofficial MOOC credential verification for a fraction of the official prices. Illicit services sell access to paid MOOC content and even do learners‘ assignments for them. While MOOC providers try to crack down on these practices, their prevalence points to unmet demand for affordable alternatives.

Toward a More Equitable MOOC Future

So where do we go from here? It‘s clear that the fully free MOOC model is not sustainable at scale without outside subsidy. At the same time, the current maze of paywalls and upsells has subverted MOOCs‘ original mission of being truly open to all.

To strike a better balance, MOOC providers could take a page from other online business models that have found a middle ground between free and paid access:

• Wikipedia runs on donations to keep its content free, with periodic fundraising appeals to users
• Spotify offers a free ad-supported tier to bring in users, with paid subscriptions for ad-free access
• Humble Bundle lets users pay what they want for content, with part of revenue going to charity

Applied to MOOCs, a more equitable approach could include:

• Offer a basic free tier with access to all core content, with donations encouraged but not required
• Provide paid tiers for premium features like certificates, live instruction, and project feedback
• Allow learners to "pay what they can" on a sliding scale, with excess revenue funding scholarships
• Partner with corporations, governments, and foundations to underwrite free access for underserved communities

Experimentation will be key to strike the right balance. Not every MOOC needs to be completely free–but every learner deserves an affordable pathway to access high-quality online education. With more creative approaches to blending open access and financial sustainability, MOOCs could still live up to their transformative potential.

From a technical standpoint, building a more equitable MOOC platform would require some redesign and re-engineering to support more flexible access and pricing models. Some key considerations for developers:

• Architect content and assessment systems to support granular access control based on user tier
• Build in secure, low-friction payment flows that can handle "pay what you want" pricing
• Develop robust scholarship management and financial aid workflows to support subsidized access
• Create analytics dashboards to monitor usage and outcomes across different access tiers
• Prioritize accessibility and mobile responsiveness to better serve learners in low-bandwidth environments

The MOOC monetization challenge is as much a design and policy question as it is a technical one. Crafting a platform that really works for all learners will require deep collaboration among educators, developers, and other stakeholders.

Looking Ahead

The story of MOOCs thus far shows the perils of overpromising and underdelivering on the potential of technology to transform education. The early hype around free MOOCs set expectations that would be difficult for any platform to sustainably fulfill. The pendulum then swung too far toward restrictive paywalls in a rush for profitability.

Yet amidst this turbulent history, the core innovations of MOOCs remain as vital as ever. Interactive online learning at scale, done right, still has immense potential to expand educational access globally. The challenge now is to develop models that can make good on that promise while also keeping the lights on.

Continuing to erect paywalls without concern for affordability and inclusion will diminish MOOCs to little more than a content commodity. Bold experimentation with new approaches to sustainability and access is needed to reignite the transformative spark of the original MOOC vision.

The learners are ready. It‘s up to the platforms to meet them where they are.