The online learning markets

The rapid development of the Internet and the rapid spread of mobile devices are changing the way the economy works. The Internet platform for the various gradually form a new organizational form and disrupting industries. Education is an industry that is being disrupted by the platform. A kind of massive open online course platform takes digital devices such as mobile phones, personal computers and tablet computers as the entry point, and USES technologies such as Internet technology and multimedia technology to digitize the process of education and education. From the perspective of Internet history, online education has been developing since the early days of the Internet, and it is an important part to promote Internet technology and make up the Internet economy. From the perspective of the online education market, Technavio Research mentioned that Global Distance Learning Market by type (traditional distance learning and online distance learning) and geography (North America, Europe, APAC, MEA, and South America) is expected to grow by USD 90.37 billion, at a CAGR of 9% from 2019-2023. Take MBA education for example, Moules argue that 2015* 20%  Association to Advance Collegiate Schools of Business (AACSB) offered Online MBA At the end of the last academic year, this had grown to 35%. 2019/2020 Academic Year: 35% Association to Advance Collegiate Schools of Business (AACSB) offered Online MBA At the end of the last academic year, this had grown to 35%. Online MBAs outgrew all other professional MBA programme types in the US in 2019. Scale the demand for education and skills training. The continuous development of technology brings more advanced productivity and requires people to have more knowledge and skills. Learning curve theory tells us that the improvement of enterprise's efficiency depends on the continuous improvement of people's skills and abilities. The requirement of human resources in enterprises is constantly improving, which brings the demand of education and skill training to the society on a large scale. Baker and Passmore argue that Massive Open Online Course (MOOC) is a type of online course characterized by large-scale student participation and open access via the Internet. The “Open” part of the MOOC acronym signifies “free” to many people—as in “free to students”.  Examples of large MOOCs: Udemy, Udacity, EdX, Coursera. The purpose of this essay is to discuss the business model of traditional university and massive open online course platform, and to discuss how the online education platform becomes disruptor of universities.

Pipeline educational products vs Platform educational products

The traditional university is a typical "pipeline" business model, with MBA degree programmes, for example, where people get information about the programme from various advertisements and communities, and then start sifting through intelligence and emotional intelligence, such as interviews and exams. After reaching the threshold of education, people pay the fees of MBA program to get the education resources, professors, places of education and network included in this education product. MBA programs typically last one to three years and are taught in a face-to-face, class-by-class manner. The distribution of teaching time is very concentrated, which may be full-time or part-time on weekdays. When a course is completed, a response credit is required. To earn a degree, you need to complete the required courses to earn credits and complete the project research. This is a traditional way of teaching, although some schools and research institutes are also trying to combine online and offline courses. However, there is not much change in the way of single course credit, course mix, time arrangement and so on. However, massive open learning platforms offer more possibilities in degree education. From the perspective of education threshold, the open learning platform does not limit users' access to learning resources on the platform, and high-quality learning resources may be related to "price". Some degree-related education programs require some preconditions, such as pre-degree certificates, and so on. Other open courses may be offered in an equal opportunity way to platform users. This means that users can rely on the open education platform to continuously improve their degrees. Massive open learning platforms differ greatly from traditional university education in the form of education and time allocation of participants. Users can use fragmented time to learn, rather than a continuous period of time to learn. Of course, to get a degree or certificate, you also need to complete the assessment. But if corporate employers, open education platforms and providers of educational programmes can trust each other, then a new system of accreditation of educational standards is possible.

Be disrupted universities and growing Coursera

Universities is disrupting by massive open online course platform. Czerniewicz mentioned that open online learning platform has unbundling the university's core competency -- professors. This means that through Coursera, students will be able to provide excellent tutor resources and content, and students will no longer be restricted by the traditional entrance conditions. Users can get equal opportunities for quality education on the platform. At the other end of the platform, education providers have the potential to significantly increase revenue or visibility as course owners. McCowan discussed that new digital education platform could be the end of university. An excellent teacher of a high-quality course can be more selected by users, thus more exposure, which is also a positive feedback effect for teachers. Moreover, the progress of technology will further promote the progress of the platform. With embedding big data, ML and AI into the online learning platform, somehow teachers will be empowered to improve the teaching. Tofangchi, Hanelt and Li discussed that machine learning could optimize platform operation. By applying big data, teachers become possible to understand the behavior of students and feedback by the data collecting and tracking. With ML, teacher can free hands and leave the less important works such as test, assignment review and response of RAQ to machine. Finally, when ML can understand the academic system of entire course, AI tech can replace teacher to deliver course and manage all the interactions with students. However, we believe the combination and application of those technologies is subject to the nature of course and complexity of non-engineering features. For example, learning art, philosophy needs more sense of emotion, instinct with personal experience. The opposite is that some courses such as teaching how to use software, can be conducted by AI teachers easily.

Blockchain is another technology that could upend the education industry. Iansiti and Lakhani mentioned that Blockchain could reduce transaction costs, eliminate trust intermediaries and potentially change the economy. Its core significance lies in the trust relationship between students' education level and enterprise human resource management. In the traditional sense of a university or institution, the proof of education level is achieved by issuing certificates, such as certificate of degree, certificate of skills, etc. Forgery for all kinds of purposes and uneven license issuing agencies lead to the enterprise's human resources in the recruitment process need to invest a lot of resources to check, such as background checks. Blockchain can reshape this trust relationship, making it possible to keep electronic files consistent for life and prevent any tampering. This greatly reduces the cost of enterprise human resource management. On the other hand, in order to solve the problem of insufficient interaction of online education platform. Virtual reality, augmented reality and mixed reality are being used in education. This will significantly improve issues of educational collaboration, guidance and interaction.

As can be seen from the above discussion, technological progress is one of the driving forces of Coursera's business growth. Firstly, the increase of Internet bandwidth makes remote communication from voice to video and even real-time virtual reality. Improvements in hardware and software have enabled students to access them through inexpensive and diverse devices. This makes education easier and allows more technology to be used and employed. Second, the flexibility of time allows all groups, except full-time students, to participate. In the case of the MBA, many students expect to study without sacrificing their family life and quitting their current jobs. Therefore, time flexibility is one of the key factors affecting the success of educational products. Finally, the change of social culture makes it easier for people to accept online education and social activities. Before the advent of the Internet, it would have been unthinkable for people to learn by cable or telephone. But nowadays, more and more people are willing to learn, communicate and socialize through apps. All of these factors are driving the rapid growth of Coursera.

Multiple side markets and network effect of education

If we think of the traditional university as a pipeline, then at one side of the pipeline are students from schools, or professionals from society. At the other side of the pipeline are human resource markets or research institutions. Then every university will compete for its revenue "enrollment" and invest the revenue in brand marketing, such as campus, buildings, education rating, scientific research projects, etc. This essay does not evaluate the quality of pipeline model, but only analyze the behavior change brought by different effects. Coursera platform is a completely different way, the platform will education together multiple participants of the market, in the first place in the user side, both formal education and expect to get a higher degree of students, also have not received formal education of students, also includes a variety of professional skills to the industry have requirements of users, such as software development, business analysis, artificial intelligence and so on. This is a very high degree of freedom for the educated and can be combined with a degree or vocational training. Secondly, on the supply side, Coursera brings together the curriculum development capabilities of universities, institutions and industry technology manufacturers, which is far more valuable to users than the options offered by a single educational institution. The network effect of Coursera amplifies the educated population, and the openness of the Internet platform makes it possible for anyone who installs the Coursera app or visits the Coursera website to start learning immediately. From a value stream perspective, Coursera optimizes commerce, including teaching, learning, and payment for research. Knowledge, including lessons, exercises, videos and documentation; Human resources, package student supply and education program customization.

Li, Wang and Tan shows that in the network effect of large-scale online education platforms, online learning platforms show positive externalities, and their direct network effect shows that the gains of learners after completing certain courses increase with the increase of the number of learners joining the same courses. The income of course providers increases with the number of learners. At the same time, the scale of the learner community or the course learner network also affects the use and completion of the course. On the indirect side, the scale effect of educational demand stimulates the availability of complementary products or services. For example, the refinement of courses and the official recognition of traditional universities and employers in the market create additional value for those taking these courses. The positive feedback effect of network effect is showing up in the "winner takes most" phenomenon, since Coursera, Edx and Udacity have reached the critical mass of large-scale online learning platforms in the market. Although Coursera is now fairly large, it still had a chicken-and-egg problem in its early days. Jia Song, Bai and Xu argue that development platform user group of the basic strategy, through the network marketing strategy raises the users pay habits, thus forming a free value-added strategy. Obviously, all MOOC platform is used first free foundation courses and professional courses, these courses are often a single course, not to a degree or professional skills and design. But it usually USES the brand name of a well-known university or technology manufacturer. After cultivating a certain number of users, the platform began to try to monetize. This kind of monetization includes the addition of paid online value-added services, professional degree education and university degree certificates, and technical certification courses jointly developed with technology manufacturers etc.

A well reputation system and recommendation system design can also provide positive feedback for network effects. Tofangchi, Hanelt and Li demonstrated that the multiple side platform's value generation mechanism helps drive sales, customer satisfaction, efficiency and trust .The Coursera platform opens up the filtering mechanism directly to users, which categorizes courses and presents them to participants. Participants can filter the content by category or search. The selected content usually contains the evaluation of previous participants to help learners to distinguish the merits of the content. From the learner's perspective, choosing a course means investing time. In the platform, users usually decide whether to choose a certain product, course or service based on the feedback system such as system evaluation, user rating or user's historical evaluation. So Coursera makes recommendations to new users through a user-feedback system open to the learning community, such as course ratings and rankings. In this way, new users can be guaranteed to continue to get high-quality content, so that the inferior content cannot get users and gradually exit the platform., on the other hand, also need to prevent the negative effects of network, such as the user in the moral hazard after the deal, the platform may have to be reasonable evaluation to study the behavior of the participants, when learners because of personal reasons failed authentication or failed to get a degree, to prevent the learner's malicious evaluation of loss caused by the high quality content. Therefore, a good reputation system design can help the platform manage the content quality, optimize the recommendation system, and thus optimize the network effect.

Coursera business analysis

Coursera is one of the most successful MOOC platforms in the world. Compared with the university, it has many advantages. To its advantage, Coursera has built a multi-side market for students, universities, educational institutions, technology vendors, and corporate employers. On the one hand, knowledge and education providers can provide education resources in the platform, on the other hand, the user can free to choose what they need in the platform of education or training products. From this perspective, Coursera platform integration not only between the user and the university of education behavior, it will also vocational skills training, business training and open courses of the two sides together. Coursera has significantly reduced the cost of running an education service, with all content provided online by course providers, and since the platform does not produce content directly, there is no need to hire professional educators or build or rent space. Users can flexibly use their personal time to participate in learning. Course providers usually offer courses periodically, which can be completed within the specified time. As you can imagine, users can even use their time in the subway and airport terminals to complete learning. By bringing more opportunities to the educated, Coursera has greatly lowered the barriers to education, increased diversity and inclusion, and made education more equal. It unshackles knowledge, education and institutions, making it possible to tailor courses based on roles and generate new professional degrees. From the perspective of universities, the access of educational products and courses to such a platform as Coursera can reduce transaction costs, fixed-cost investment and let the teacher's time more flexible. The platform may also redefine campuses and student communities to build web-based social networks. The development of new technologies, such as 5G, virtual reality and mixed reality, may bring unprecedented opportunities to Coursera.

At the same time, Coursera has some weaknesses compared to universities. Course providers haven't fully prepared to provide online courses. Some teachers are not trained and fully capable to conduct the course online, and there is no matured system or process to measure the effectiveness of online education. From student side, they are also not prepared and there are other distractions can drive students out of courses. The communication base on app is limited. Both teachers and students didn't feel confident to get most of content from online course. And the feedback process is not as good as traditional offline course. Professor and teachers taking offline education experience as benchmark, the online course is not fully trusted. There are complaints about the sense of achievement and rewarding, while cost is not more competitive. And the existing no-campus education doesn't satisfy students' needs on social and networking development.

Platform profitability and governance

The purpose of the platform strategy is to leverage network effects to influence both sides of the market for growth and then capture the value created in the process. Jia, Song, Bai, and Xu mentioned that the platform can provide a variety of products and services for different user scenarios and provide corresponding pricing strategies. To discuss Coursera's business, firstly, business to consumer is the main way to operate. But this strategy of getting customers for free can add additional services for a fee. Basic materials are open and free to all users, while value-added/ premium services. The face-to-face digital classes, contact with an instructor, brokering of MOOC participants with potential employers are chargeable at a fee. Specializations on Coursera is such a service. Secondly, course costs are paid by using revenue earned from some other product or service or from revenue that is reallocated from some other operation in the MOOCs’ organization. For the instance, to require payment by some MOOC participants and use their payments to subsidize participants who are not charged. Thirdly,  the business-to-business model can offers bundled educational services to enterprise users, such as content customization, teaching assistant services, pre-employment general skills training, and employee-oriented skills improvement programs. This business-oriented approach can be offered point-to-point to the enterprise, or even extend part of the platform to the enterprise itself. Finally, there is a hybrid business to business to consumer model that the two platforms both benefit from the content and revenue sharing collaboration by helping each platform make money from some hard-to-reach secondary markets. E.g.: Coursera sub-license some of its courses to Netease MOOC, by allowing Netease MOOC to translate the materials into Chinese and provide localized teaching assistant services. The value conversion of network effects depends on the quality of users and content on both sides of the market. The research of Baker and Passmore shows that the price strategy of the platform can be dynamic. The platform is fully capable of implementing floating pricing strategies through technology. According to the user's consumption habits and willingness to make dynamic adjustments to maximize profits.

Given that digital business development is always ahead of regulation, strategists need to consider control over external environments, such as regulation. Flyverbom et al. reflect that governments should pay enough attention to the data collection and privacy issues in cyberspace. Education can be said to be a special service or product. It is important to consider how to standardize and empower the platform, such as licensing an operational education platform to respond, and the threshold for capacity assessment. Procedures and controls should be in place to ensure that preparations are in advance of the law. For example, courses in the platform are usually the intellectual property of universities and manufacturers, so the ownership of course content needs to be defined and regulated by teachers or universities. Privacy risks are just as important as compliance, and more so on the technology side, to ensure that digital assets are protected by universities, faculty, students and technology providers. The privacy protection of learners participating in learning is also very important. Although they may have a strong desire to disclose their personal information to the human resources of enterprises, great importance should be attached to the privacy management of the platform to ensure that personal privacy will not be abused. From the perspective of social responsibility, universities on Coursera platform can be considered as a public resource. Social responsibility affects the reputation of a school. In a sense, platforms like Coursera also act as media. Therefore, the platform needs to ensure the compliance of the course content. So, when universities need to work closely with governments, technology companies and other universities, these controls should be integrated into their strategies.