OER or open educational resources is one of the good news stories of 2011. OER takes many forms, but what binds initiatives like The Khan AcademyMIT OCW (Open Course Ware) and Stanford’s AI course is that they are all freely available to learners and other educators. It’s this “free” characteristic that has caught the attention of the press. In the context of higher education news stories about rising costs, tuition and student debt, this must be our “man bites dog” news story.

Despite the importance of “free” to OER, there’s been little written about the economics of OER. How, specifically, can we make it sustainable? Even Taylor Walsh’s book on OER, Unlocking the Gates: How and Why Universities are Opening Up Access to their Courses, resisted challenging the logic of multimillion-dollar OER projects without revenue streams.

My interest in this aspect of the OER model was peaked last week while reading a report about The Open Education Initiative at UMass-Amherst. The initiative provides UMass instructors with stipends in exchange for producing instructional materials that are free to UMass students. (Print copies can be ordered for $13, which, I assume, covers printing costs).  According to the news story  “ . . . universities are finally getting serious about student complaints over the cost of course materials. UMass estimates that its $10,000 investment will save students $72,000 over the next school year. Provost James V. Staros says the savings “directly benefit [students’] very real and very tight budgets.”

The UMass instructors, then, are producing instructional materials that replace commercial textbooks. This initiative fits neatly into the broader narrative about textbook prices over the last few years.  According to one U.S. study, the price of textbooks rose 186% between 1986 and 2004.

Questioning the price of textbooks make perfect sense. In all sorts of industries, new business models – enabled by technology – are making the production and distribution of high quality information material possible at lower and lower prices. CD Baby did it for music. WordPress is doing it for bloggers. The new economics of reference materials has all but killed the encyclopedia business. And innovative business models are emerging that suggest that lower prices are indeed possible in the realm of textbooks, as well (See, for example, the very thoughtful approach taken by Flat World Knowledge).

The professionals behind the initiative at UMass-Amherst should be congratulated for their efforts. This is clearly an effort to make education more affordable. However, the initiative raises two important questions about the sustainability of OER that, to my knowledge, have yet to be adequately answered. And while I recognize that questioning OER is not an especially popular position to take, I need to pose these questions in order understand how we can make it work.

Equal value?

Can OER initiatives produce instructional materials of EQUAL value?

The investments made in the materials at UMass are far lower than is made in the investment of the commercial materials that the OER materials are designed to replace. Traditional textbooks cost anywhere from 150,00 to 1 million (USD) to produce. UMass is offering its Instructors 1000-dollar stipends. Even if the Instructors at UMass are only producing part of the required materials, the investment is a mere fraction of the total invested in the commercial model.

The costs of producing commercial textbooks goes toward designers, programmers, artists, copy editors, marketing, and to third-party content (e.g. illustrations). And of course, there’s the author.

Will these very low budget initiatives such as the one at UMass-Amherst be able to match the quality of what is produced under the commercial model? I’m not sure how they could.

Is it the case, then, that what textbook publishers have been creating for higher education is more than what the market actually requires? This may be true for certain kinds of instructional content, and it may be that a more varied set of content solutions emerges over time. However, the more common response from academia to commercial textbooks is not that they are too good, but that they are not good enough.

Is it the case, then, that commercial publishers are not as efficient as higher education institutions at producing instructional content; that publishers are increasing costs unnecessarily? It’s true that there are a few costs that institutions producing instructional materials won’t need to incur – marketing and profit, notably. But I think the more relevant issue in terms of cost efficiency is that higher education institutions are not publishers. They do not have the systems, incentives, processes, and skill sets and so forth of publishers. Simply put, it’s not what they do. Consequently, it’s unlikely that will be able to produce instructional material of equal value at costs lower than organizations that are designed specifically for this purpose.

Is it sustainable? Or, “where’s the money?”

The bulk of resources for OER initiatives appear to be coming from three sources: philanthropists, the colleges themselves and the efforts of faculty.

Faculty, for its part, is owed our appreciation for participating in these events. However, I’m not confident that we can expect faculty to do extra work for little to no pay on an on-going basis. And as the financial pressure on higher education continues to develop, more pressure will be placed on faculty to take on greater workloads.

If the college itself assumes financial responsibility for these ventures, the funds used to support the OER initiative will presumably be drawn, at least in part, from the bucket that is filled by tuition. Therefore, more tuition (or fees) will be needed to compensate for the cost of the OER initiative. (I’m also curious how individual institutions that are funded in part by taxpayers in jurisdiction will respond to requests to fund initiatives that help students in other tax jurisdictions. Let’s leave that for another time.)

If we rely on philanthropists (e.g. Gates Foundation, William and Flora Hewlett Foundation), we are subject to the ups and downs that characterize all university advancement initiatives. The institution’s ability to produce curriculum becomes dependent on the ability of the institution to solicit donors. In addition to placing academic work under the umbrella of “advancement”, we might also want to consider how this might affect schools that are less able to solicit donor funds. It’s true, as James Uhlenkamp points out, the differences in access to open educational resources are technically eliminated by the fact that the materials are “open”. However, in the short-term, the bulk of the use and benefit of OER will likely be derived by those that produced it. Yes, these materials are available to the broader public, but the content will be produced first and foremost in accordance with the needs of the institution that created it and it is not yet simple and easy to find and integrate OER content into courses. Until such time that the content can be easily customized to local needs and easily found and integrated in new contexts, the host institution will benefit most. And as there are considerable differences amongst institutions in terms of securing donor funds, there may be differences in benefits from OER, as well.

The US government has also flirted with the idea of directly funding the development of instructional material. In 2009, the Obama administration announced plans to provide 500 million dollars for the creation of freely available instructional materials aimed at the community college sector (later dropped in a funding cut). I’m curious as to how academics feel about having instructional content directly funded by a government.

OER is a very complicated issue. But it is one worth trying to solve. Lowering costs for students is fundamental to providing fair access to higher education for those who seek it. We need smart, sustainable business models for OER that don’t simply shift costs from one place to another, or reduce the overall quality of the materials we offer students. We need the highest quality instructional material at the lowest possible price.

Let me finish by sharing the response of one faculty member to an article in the Chronicle about an open textbook initiative. Although the views expressed below are not particularly subtle, they do provide a glimpse into how some segments of higher education have responded to the logic of OER thus far:

“I don’t understand … tell me again how the people who work on open source materials are feeding themselves and their families? Tell me how they take the money they’ve earned through hard work and reinvested it in coffee, automobiles, riding the bus, buying medical care, consuming food, etc … People who support open source need to provide all of their services for free too, so the people earning nothing making free materials can meet their own needs. And then we can all go to heaven and have lollipops and pet goats. Utopia. Yay. Economic children of the world…please grow the hell up.” (Chronicle of Higher Education)

Author: Keith Hampson


  1. “(I’m also curious how individual institutions that are funded in part by taxpayers in jurisdiction will respond to requests to fund initiatives that help students in other tax jurisdictions. Let’s leave that for another time.)” This question is already answered. We already do that through federal and state road development, Medicare, Social Security, etc. The federal and state governments already help fund the textbooks available to K12 systems, so a leap to help fund the materials in higher education is not that large, at least from that side. It really only becomes a serious issue if the use of those government materials are mandated in some way. Academic freedom and freedom of speech should not be trampled in OER.

    The comment about institutions less able to exploit the development opportunities out there misses the point of OER: if it’s open, these other institutions, their faculty and their constituents will all be able to access the resources. W e just won’t get to put our names on the resources, or have control over their continued free access. That could be an entertaining and important discussion, too.

    If the textbook companies would not routinely “update” textbooks every few years, thereby making existing textbooks less available through channels that allow for the use of financial aid funds, OER would not have the grassroots support that it does. Cases in point: a psych. professor at my previous institution compared the “old” and the “new” editions of her textbook, and found that only the preface had been updated. My composition text was recently republished out of its scheduled rotation, to update the APA and MLA chapters. The APA chapter had errors, which of course required a corrected edition to be released. Of course, the publisher will reissue the book’s next edition on the old schedule, meaning that they get to release three “new” editions in four years. Can you smell the profits?

    If colleges recognize development and publication of OER in their tenure and promotion policies, some faculty will take the time and effort to create these. The peer review process can and is implemented in many of these development schemes. I’ve seen and used some of these, and they are equal or superior to the commercial products. The different voices also provide me, a writing teacher, an opportunity to highlight that element of writing (among others) as we work. You can check some of these at http://wac.colostate.edu/.


  2. Thanks for this very useful post, James.
    I have a couple of follow-up thoughts:
    Re: one jurisdiction sponsoring instructional content used in a second jurisdiction. The fact still remains that the source of funding for any one institution will be different than the source of funding for another. This is true, for example, on a state-by-state level, but also nation by nation. Consequently, the funding of these initiatives – whether from governments or the schools themselves – will be used by other jurisdictions (that are not sponsoring the initiative). While, on a personal level, I’d like to see content shared freely around the world, I suspect that the politicians that make these decisions will become conscious of the fact that they are spending their constituents’ tax dollars on initiatives for other jurisdictions. This is no way to get re-elected.

    Re: textbook updates. Like you, I’m conscious that it appears that traditional publishers are releasing new editions of their textbooks more frequently. This shift is largely driven by the increased efficiency of the second-hand book market (see Amazon). As it gets easier for students to locate second-hand versions of the book, the publishers offer new versions more frequently so that they value of the second-hand market declines. It’s a game the publishers are obviously not going to win in the end. The Internet is great at introducing this kind of market efficiency.

    Re: some institutions may be less able to secure funds for these ventures. I don’t think I explained this particularly well in the text above. While open materials will, as you say, be freely available – in the short-term, the bulk of the use and benefit of OER is derived by those that produced it. Yes, it is available to the broader public, but (a) the content will be produced first and foremost in accordance with the needs of the institution that created it and (b) it is not yet simple and easy to find and integrate OER content into courses. Until such time that it the content can be easily customized to local needs and easily found and integrated in new contexts, the host institution will benefit most. And as there are considerable differences amongst institutions in terms of securing donor funds, there may be differences in benefits from OER, as well.

    My main point, though, is that OER is not “free”. Someone pays. And we need to be sure that the new funding model – whatever it happens to be – is designed so as to increase quality and reduce costs.


  3. You bring up a salient point; textbooks usually cost 1M and U Mass Amherst is paying instructors 1k to create the replacement. In my experience, instructors don’t assign the entire 1M textbook to be read for a course. When an instructor only assigns students read 5 of the 20 chapters of a $200 textbook, it is because the instructor finds only those chapters relevant. I’m guessing with the 1k instructors are paid, they are focusing on the content found in the 5 chapters instead of recreating all 20 chapters.

    Also, I am in agreement with the comment above about OER not being “free”. OER courses are like free puppies, not free beer.


  4. Thanks, Kristen. Incidentally, I spent 1500.00 on medical tests for my family’s “free puppy” this weekend.


  5. You miss the point. If many faculty are releasing many open access etexts then each institution gets access to x etexts for everyone that they create themselves. You make 1 and get 10 or 20 in return. That makes economic sense. In addition, the etexts are open so faculty can do what they want with them and are not subject to kill dead dates, geographical restrictions, formatting restrictions, impossible proprietary licenses and DRM.
    States can easily rationalise their content being used elsewhere when they can get access to an even wider range of resources from outside. Tit for tat has always made good economic sense. Tit for tat tat tat makes even better.


  6. Rory –
    Thanks for the note. I have no trouble understanding the simple math that underpins the OER model. However, I’m not yet convinced that the typical academic is as interested in this model as advocates of OER imagine. Many, for example, don’t want to spend more of their time searching for sources of content. Even more don’t have the time or desire to modify content – at least not extensively. My perspective is based primarily on my experience leading online learning at two universities, where I was responsible for producing hundreds of online courses. We “pushed” OER, but received little take-up from academics.
    OER has been around a while now, and outside of certain circles, I’ve not seen sufficient enthusiasm for this approach “on the ground”. When I taught higher ed I based my entire courses on OER content – before I had actually heard of the term – but I was not typical. I have no doubt – as I mentioned in the original post – that finding OER content will get easier, and that more OER will be used. But until the fundamental business model of OER changes, I don’t see the quality of the content improving a great deal. And I believe the quality of content matters a great deal.
    P.S. One of the oddest aspects of the OER discussion is how it is often treated like “motherhood”; people don’t feel free to question its value. After writing this simple post, I received a number of private emails from people in the field who said that they agreed with much of what I wrote, but had learned to keep their opinions about OER to themselves. I’m not sure what’s producing this particular tone to the discussion, but I do find it rather unique.
    Thanks again for your insights.


  7. This is why Open Policies (publicly funded resources should be openly licensed resources) are important. If we get this simple idea right, OER sustainability will cease to be an issue because:

    (a) there will be plenty of public funding to build and maintain all of the teaching, learning and research resources the world needs, and,

    (b) “open” becomes the default and “closed” becomes the exception. … and the bar for receiving an exception should be high.

    Wrong frame (today) = “How do we sustain that [pilot] project?”

    Right frame = “How do we maximize the investments we’re already making (& have already made – sunk costs) on learning resources we need for our students… for our university … our state … our nation?

    OER becomes the default output of normal work — so no new money required. It’s part of normal business.

    This was our sustainability plan in WA State = We are only going to be selfish and build / maintain what we would have done anyway for WA Community & Technical College students. We’re also going to put a CC BY license on everything we build because (a) we believe education is about sharing and (b) good things happen to us when we share: updates, new partners, grant opportunities, our courses can be translated into different languages, etc.

    There will still need to be ongoing investments … but if we collectively need quality, affordable learning resources that are iteratively improved based on data from assessments … shouldn’t we:

    (a) demand that we get access to what we, the taxpayers, paid for so we’re not starting from scratch and;

    (b) share what we build as we have a collective goal of educating more people to higher levels? Are we educators or not?

    Cable Green
    Director of Global Learning
    Creative Commons


  8. Thanks, Cable. You’ve inspired me – and no doubt others – to look into this subject further. In particular, I want to get a better sense of how the OER model intersect with notions held by academics about intellectual property.
    For those readers that want to learn more about Creative Commons, I encourage you to visit these pages:


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