The Changing Landscape of Distance Education: What micro-market segment is right for you?

• By Judith V. Boettcher
• 06/27/02

Why are some distance education programs folding or shifting focus while others enjoy remarkable growth? Is there a formula for success? Judith B'ettcher takes a look at how different types of distance learning initiatives have fared in an evolving and unsettled environment.

The unbridled enthusiasm and excitement about the Web back in 1997 seems almost eons in the past. Only 5 years ago, it seemed as if distance learning—using the Web and the almost ubiquitous Internet—might be a silver bullet. The Internet and Web technologies seemed to promise a way to reduce academic costs while delivering degrees and learning to all of us, anywhere, and at anytime.

With great fanfare, the launchings of several virtual universities occurred in the two years between 1997-1999. These virtual universities often had no real physical campus, and the faculty consisted of a rather small core of full-time instructors—if any—plus a larger group of contract virtual faculty, assembled on an as-needed basis. About the same time, a number of universities and colleges spun off for-profit business units to provide Web-based distance learning. These for-profit ventures were intended to reach an institution’s existing students as well as students from new corporate and business clients. At the same time, a number of “dot-coms” launched all-new for-profit higher education institutions.

The idea that Web-based learning provides space-and-time independence is powerful, and it captured the imagination of institutions and state systems concerned with the ever-increasing costs of traditional campus-based instruction. Where do these institutions stand today?

What’s in the Headlines Today? Where is the Fanfare?

The displays of conviction and confidence in distance education startups over the past 12 months have devolved into terse reports of closings of some high-profile ventures launched just 2-3 years earlier. At the same time, the headlines have included news about of growing enrollments in distance learning at certain for-profit companies as well as plans for more virtual university consortia. What’s going on with distance learning?
A number of the distance learning ventures that have shut down over the last 12-15 months have been the for-profit educational ventures of well-known academic institutions. These casualties include the closing of Virtual Temple’s online doors in July, 2001, along with the closures of NYUOnline and UMBCOnline in late fall of 2001.
In addition to these unexpected events, the confirmation in May, 2002 from the U.S. Open University of reports that it will close in the summer of 2002 with the completion of the spring programs came as a real surprise. The reasons cited were familiar to many. The programs were not “generating enough revenue or enough enrollments to offset growing debts” (The Chronicle of Higher Education, Feb. 15, 2002). The Open University will still have a presence in the U.S., however. Its for-profit arm, Open University Worldwide, is forging a continuing partnership with UMBC (University of Maryland/Baltimore County) to support an online master’s degree in Information Systems.

Surviving For-Profit Ventures of Traditional Universities

There are at least two high-profile, for-profit ventures that are still operated by traditional universities. ECornell, the for-profit venture from Cornell University, is just now offering its first courses. ECornell is focusing on continuing education courses in medicine and certificate-level courses from the School of Industrial and Labor Relations. These programs are closely aligned with their traditional focuses and have well-established relationships with corporate clients. Another for-profit venture that is growing and expanding is Fathom (www.fathom.com), run by Columbia University with 13 other members. Fathom announced in February, 2002 that it would be expanding its course offerings significantly by adding corporate training courses to its academic and cultural offerings as a way of serving the needs of corporate employees. In August, 2001, it formed an alliance with the AARP to provide short, non-credit, online courses.

What Other Distance Learning Ventures Seem to be Working?

Other distance learning ventures that are moving forward appear to be closely aligned with existing continuing education and professional extensions of well-established traditional institutions. They are distinct non-profit ventures of their institutions, and they are basically program extensions into Web-based learning for an established population of students, plus additional students from corporate and business clients.

Examples of these ventures include the World Campus at Penn State, UMassOnline, and the continuing UMBC online programs. These ventures are all non-profit, and all offer programs and degrees aligned with the existing academic programs of the campuses. When interviewed, President Graham Spanier of Penn State noted that it is important to have realistic expectations, and not to see the online ventures as “massive profit centers” for the rest of the university (The Chronicle of Higher Education, Dec. 14, 2001).

Many of the new online distance learning degree programs are also built on partnerships and consortia. Besides partnering with UMBC on a master’s degree in Information Systems, the U.S. Open University is also partnering with Indiana State University on a bachelor’s degree in Business Administration. Other partnerships also focus on specific degree partnerships. MIT, for example, partners with the National University of Singapore and Nanyang Technological University (web.mit.edu/sma) on an engineering degree involving MIT students and students in Singapore. A similar program is underway between the University of Michigan at Ann Arbor and Shanghai Jiao Tong University, to offer a master’s degree in Engineering Manufacturing to Chinese students through distance learning. The United States Army is funding a large national consortium for distance learning—eArmy U—that is on its way to offering 90 degree programs, originating from 23 college members. This project opened its doors to students in January, 2001, and has since enrolled 12,000 students at three locations.

The State of the Virtual Universities and Consortia

A recent project from the W. K. Kellogg Foundation to the Instructional Telecommunication Council (www.itcnetowrk.org) supported the development of a list of states that boast a virtual university or other statewide organization to deliver or promote distance education. One of the goals of the projects is to “help foster communication among virtual universities.”

The survey information indicates that most of these institutions are serving as aggregators of course information and supporting communication and collaboration at a state and consortium level. These organizations also appear to be serving as common market education portals for the state, and they further the development and communication of policies and standards, including policies and standards to ensure transfer of credits between institutions. Most of the virtual universities indicate that their target audience consists of existing students, corporate and business clients, and new students from outside existing geographic service area.

The launching of new virtual universities continues. The state of Virginia endorsed the creation of the Virginia Virtual University in the fall of 2001. The plan d'es not include offering any courses from the virtual university; rather it proposes that the virtual university will assist students in using credits from a number of different Virginia schools to obtain a degree. Another virtual university project under discussion involves a consortium of colleges in 15 countries in Asia and the Pacific. This project would be an “international cyberuniversity” that offers courses in both English and Chinese, as well as other languages. The Pacific-Asia Consortium for Research and Human Resources Development is the organization behind this project, which includes such colleges as the Ewha Womans University in Seoul, Korea; Japan’s Keio University in Yokohama; Chulalongkorn National, Chiang Mai, and Khon Kaen Universities, in Bangkok and northern and northeastern Thailand, respectively; and Vietnam National University and the Hanoi University of Technology.

Distance Education Institutions and Programs

Any institution can decide to launch distance learning and online programs in any content program area for any group of students. However, online programs work best if designed to fit student profiles, life styles, and learning purpose. The accompanying table shows the major types of institutions and the types of degrees, programs, and certificates generally being offered by higher education for-profit and non-profit institutions.

The recent announcements about distance learning ventures suggest that we have, as a profession, passed the point of unbridled enthusiasm and possibility about the Web and the Internet. Our early enthusiasm caused many of us to believe that not only could learning and degrees be offered anywhere at anytime, but that any institution could offer any programming to any student and be successful and productive at it. We are wiser and more discriminating now. The distance learning principle that we are being forcefully reminded of is that we are in the knowledge services business, and basic business principles must be applied if a program is to succeed.

Lessons Learned from the Online For-Profit Ventures

Why didn’t the for-profit ventures of well-established institutions succeed? The reasons include the need for better marketing (NYUOnline), more involvement from mainstream faculty, (NYUOnline), lack of initial accreditation and brand name recognition (U.S. Open University), low student enrollment (U.S. Open University), and the cost of developing courses (Virtual Temple).

It is useful to note that a primary motivation behind UMBC’s partnership with the Open University was to tap into the Open University’s marketing and program administration expertise. UMBC is a well-established provider in distance education and noted as early as July, 2001 that they had enough courses to offer 29 full degrees online. So, they had already invested in the development of courses.

For the other new for-profit ventures, the cost of the development of courses is a major factor in building a profitable education business. For example, NYUOnline spent $25 million on seven courses. The four institutions (Princeton, Stanford, Yale, and Oxford) in the Alliance for Life-Long Learning have each invested $3 million. This alliance offers noncredit courses in literature, classics, and religion that last from several weeks to eight months. Princeton has since left the alliance to focus on using interactive software and streaming media to their classrooms and public lectures.
So, while higher education institutions are expert in many types of programming, it may be that their continuing education divisions and for-profit education companies are better suited for managing, marketing, and delivering programs to large numbers of students that are not on campus on a regular basis. Whether this will be true in the future is open for debate, of course, as more materials are easily available on line and the cost of developing courses in the online environment is reduced.

Another major factor is the students who are the intended consumers of courses. Students who turn to online and distance providers for their degrees are different in terms of motivations and lifestyles, in the amount of time they are working, and in their relative commitment to their degree work. Unlike traditional degree-seeking students, online students may feel that their time is their most valuable asset and thus may rank effectiveness and efficiency of learning materials and experiences as the primary characteristic of desirable learning experiences.

Working adults appear to prefer not to make commitments to long programs of study. Their lives appear not to be predictable enough for that type of commitment. Gordon T. Macomber, the president and CEO of NYUOnline noted in July, 2001 that corporate students want a different format than the on-campus students. He was quoted as saying, “They don’t like things called semesters,” he said. In response, NYUOnline began offering “programs”—typically made of 8 to 12 hour-long segments of self-paced study plus additional offerings in which students can interact online with faculty members.

What About the Future of Distance and Online Learning?

E-commerce and Web services applications are making the new “Web space” into exciting and familiar interactive classrooms for learning. However, the new environments and tools are causing a clash of expectations and mindsets among faculty, students, administrators, and state representatives. Some of the continuing questions involve the following challenges:

• How do we scale up to managing more students in the virtual Web learning space?
• How do we scale up course design and development so that we can develop high-quality content and deliver high-quality experiences?
• Just as we thought we could handle many more students on the Web, students wanted and expected more personalization and customization. How do we provide customized knowledge services?
• How do we support faculty who worry about how to teach and learn in these new environments with these new tools?
• Where are the cost savings for institutions?
• What are the business principles that we must apply?

What Micro-Market Segment is Right for Your Institution?

What is the state of distance learning and online learning in higher education today? It is in a state of evolution and development. The best strategy for traditional non-profit institutions may be to develop a “micro-market segment” in distance learning that is right for your institution. A possible strategy follows:

• Do what you are now doing, but do it with effective use of the technologies. This means “sticking close” to your areas of expertise, but developing faculty and student experience at using online and distance technologies effectively.
• Select or identify a program of study that expresses and embodies your institution’s mission. Then plan how to invest resources, time, and expertise in making that program and its experiences available in both Web-enhanced online and outreach modes.
• Reach out to students who have similar learning and career needs as your current students, but fewer hours per week to study.
• Expand your geographic reach to those similar students—whether it is by 30, 300, or 3,000 miles.
• Pilot and test your outreach capability by special events and programs for your existing students, to your alumni, and to corporate and professionals as appropriate.
• Determine if you need help in administration of distance/remote students, marketing to and finding these students.

Education, and particularly e-learning, is a huge growth market for the foreseeable future. Depending on where you want to be, you and your institution will be a part of it. Online and distance learning may not be a silver bullet, but it might be one way for your institution to be reach out and provide valuable learning experiences, enriching your on-campus students as well as serving more remote and part-time students. “Focus and Extend”—focus on your expertise and extend out to similar students who can now reach you via the Internet.

Editor’s note

Judith B'ettcher is chair of the Syllabus2002 conference advisory board. Along with her key role in this year’s main conference program, she will offer two days of pre-conference seminars on distance learning.