Type “MOOC” (massive open online course) into Google, and you get 2.7 million hits. Type in “MOOC business model,” and you get about 110,000 hits, most of them considering what a viable business model will or should be. More concretely, referring to the websites of the most popular online course providers—Coursera, Udacity, or edX—one is hard pressed to find a clear business model that works, in particular for the institutions that provide the course content.
At present, the institutions producing MOOCs (MIT, Stanford, Harvard, and others) have relatively healthy balance sheets, sizeable endowments, and minimal competition. There is no business model that clearly indicates a viable revenue stream for these institutions or the companies that offer the courses. Yet we believe there is a business model that can work for institutions that intend to benefit financially by offering large-enrollment online courses.