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