Notes on Internet Economics and Online Higher Ed

The second piece of the series, “Internet Economics” can be found here: Scale, Economies of Scale and Online Higher Education. 
The third piece of the series, “Internet Economics”, can be found here: The Network Effect and Online Higher Education. 
It’s not often you hear a reference to the “economics of the internet” at conferences held on digital teaching and learning, or at one of the workshops offered on campus about “how to teach online”. That’s a shame. Although the effects of internet economics have yet to be fully realised in higher education, there are very few factors that will have a greater impact on the institution in the coming years. Figuring out how to best navigate these influences is a core challenge of our time.
In other sectors, the internet’s impact on costs is familiar terrain. Jonathan Levin of Stanford summed up this influence succinctly:
” . . . the internet has lowered a range of economic costs: the cost of creating and distributing certain types of products and services, the cost of acquiring information about these goods, the cost of collecting and using data on consumer preferences and behaviour.” Jonathan Levin
But the influence of economics goes well beyond costs, distribution, and the processes of acquiring information. Economic factors ultimately influence what gets produced, how it’s produced, where, and by whom. Evidence of the huge impact of internet economics are clear in a handful of new, internet-native organisations:
“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” Tom Goodwin. 
Few organisations seem more removed from the above examples of location-neutral, born-to-be-flipped, consumer-facing enterprises than the institution of higher education. While there are a few institutions and organizations in higher education that are clearly Internet-enabled – I’m thinking here of Minerva, WGU, and Coursera – the vast majority of institutions have had their organizational structures and practices held in place by several especially resilient forces: regulatory systems (accreditation, student loans), tradition, social conventions, and the effects of decentralized management.
But there are signs that the internet economy is beginning to more broadly infiltrate higher education. New learning providers are taking advantage of the economics of content creation and distribution to offer inexpensive alternatives to higher ed – some of these are being integrated into traditional institutions. MOOCs have provided a concrete example of what a widely distributed, rational content model might look like – providing scale on a level not seen since the heydeys of textbook publishers. Learners are gaining access to more information about institutions to help them measure the value of different institutions; and more.
It’s important we develop a more in-depth and nuanced understanding of the unique properties of internet economics. This will help us leverage its unique properties to meet our goals and, when needed, avoid its influences for the same reason.
In the next few posts, we’re going to address a series of concepts that are intertwined with the Internet economics, including:
– scale and economies of scale
– network effect
– mass customization
– freemium
– unbundling
– disintermediation
Each of these concepts was in use prior to the Internet, but the economics of the internet have made them more common and/or important. We’ll address each in terms of how they relate to aspects of higher education – starting with scale and scalability in our next post.
Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximising value. 

Online Learning at VSU: An Interview with Art Fridrich

Art Fridrich is the first Director of Distance Education at Virginia State University, where he’s charged with bringing courses and programs from the classroom to the online environment. Art also works with faculty members to change the in-class experience for students. Prior to his role at VSU, he spent over 30 years in higher education as a consultant, administrator and technologist with over 70 colleges and universities in the US and abroad. 


Q. The common perception is that HBCUs have been less aggressive about creating online and hybrid programs. Is this a strategic decision?

This is a common perspective that I’ve heard many times. However, I believe that this thought might be somewhat misplaced. Nationally, there are 106 institutions that have the designation of an HBCU. Of those, a little over 30 percent offer at least one online program. The institutions that comprise this mix includes Tugaloo College, a private institution with less than 1000 students, who offers one online program to North Carolina A&T, a 10,000 student public institution with thirteen certificate and degree programs. The two institutions offering the most programs online are Hampton University, a private institution and Tennessee State University, a public institution, which are offering 20 programs online. In the end, when you consider size and other factors, I believe HBCU’s are delivering a comparable number of online programs to other institutions.

With this being said, there is certainly tremendous room for further growth, not only among HBCU’s but in general. Regarding the HBCU community, there are likely many factors that contribute to what may be perceived as stunted growth that might be encapsulated under the moniker of “strategic decision.”

Q. Should technology play a bigger role at HBCU’s? 

Even as a technocrat, I do not personally see technology in and of itself as a game changer. This is illustrated by the fact that I can’t begin to come up with the amount of technology that has been acquired by institutions during my career and shelved prior to or after implementation due to a lack of audience for the product.

In my mind, it is the role of a university’s administration and faculty to set into motion the evolution or transformation of the academy, embrace this change and then to adopt the appropriate technologies required to facilitate this change. For some institution’s, HBCU’s or otherwise, this already exists and it frankly isn’t difficult to identify them when looking. For others, there may be a need to reexamine their reason for existence, determine whether they need to begin developing a culture of change and then adopt the technology that will facilitate their vision of the future.

Q. Competency-based education has taken off in the last year. How do you see CBE fitting into the larger higher ed landscape? 

For an educational model that is still in its online infancy, I find myself as a big proponent of CBE. Nationwide, over 30 million adults have taken some and 4 million of those have completed at least two years of college. For even a portion of these learners, the ability to reenter the academy and apply a portion of their life experiences towards their completion will not only enhance their growth potential moving forward, but likely contribute to the reduction in the shortage of college graduates the nation now faces. For traditional students, CBE has the potential to address a major dilemma we currently face in education. Specifically, our classes are filled with students of varying readiness for the class they are enrolled. As such, the instructor is left to determine which population to address in the course, which leaves lesser prepared students by the wayside or better prepared students bored and unfulfilled. By focusing in on the level of knowledge acquired we rip down the barriers of time and types of student to provide just in time education.

Q. What areas of instructional technology do you find most promising as of 2015? 

With proliferation of VC infused vendors across a broad range of niches, that’s a difficult one to answer. So here’s my sense at this moment – MOOCs, Adaptive Learning and Competency Based Learning.

With MOOCs, I may see their role somewhat differently than others. I believe they have started to be and will continue to be the incubator for new education technologies. With the sheer numbers of students enrolled, regardless of motive, MOOC outcomes provide the most significant environment for quantitatively assessing the role a technology plays in the outcome of a student.

Although the latter two have a few years behind them, I don’t sense that they’ve come anywhere close to reaching their apex in the market yet. With Adaptive Learning, we have a large number of resource and platform based solutions, which I suspect will take five years or so before the technology settles and the market corrects itself to a supportable number. With CBE, we have seen explosive growth in the institutions adopting it and consultancies supporting it, but we (or at least I) haven’t seen the same explosion in technologies, beyond that of AL and proprietary institutional software.


Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value. 

University Rankings & Instructional Quality in Online Higher Ed

The Psychology programme at Caltech was once identified as one of the top 25 programmes of its type by the National Research Council. Unfortunately, as Brewer et al point out, Caltech didn’t have a Psychology programme.

Lights on the RiverGreat moments like these in the history of university rankings underscore the importance of an institution’s overall reputation on everything it does, what Brewer et al refer to as the “halo effect”. But it also points to the emphasis placed on research productivity: high-ranking institutions are those with faculty who have won the most rewards and captured the greatest volume of external research funds.

“Institutions do not build prestige in the student market by being innovative or by identifying and meeting new types of student demands. Rather, they build prestige by essentially mimicking the institutions that already have prestige”. (link)

The most direct route for an institution that wants to move up in the rankings is to mimic the behaviour and structure of those institutions at the top of the ladder. This limited notion of what constitutes “the best” and the type of competition it leads to is, first of all, one of the factors leading to increased tuition levels, which can, in turn, reinforce the hypothesis that the best institutions are also the most expensive. (See this and this analysis of NYU, for example). But it also draws attention away from teaching and learning.

“Prestige is expensive to seek, and the rewards come only to the victor.”(link)

Online Education’s Role in Reconfiguring How We Evaluate Institutions

The growth of online higher education may prove to help reconfigure how institutions are evaluated — drawing more attention to instructional quality; here’s why:

~ By virtue of its relative unfamiliarity, online education generates a greater focus on instructional design. To move from the well-established and familiar classroom format to the online space requires the institution and faculty to rethink the process of creating and supporting learning. (Instructional designers are occasionally told by the faculty with whom they work that the process of creating an online course was the first time in their careers that they had had extended conversations with someone about instructional strategies.)

~ The quality of the student’s experience in online education is primarily determined by the quality of instruction; other aspects of the university experience, such as student affairs, parking availability, are less central.

~ Non-elite institutions are often the fastest growing and most ambitious institutions in online education. To a greater extent than elite institutions, these upstarts (e.g. SNHU, WGU) compete on the basis of instructional value.

~ Online education offers new opportunities to measure student learning that, once reported, provides the basis for identifying quality in teaching and learning.

These characteristics of online higher education won’t singlehandedly make instructional quality the means by which institutions rise to the top rungs of our current ranking systems. Many students will continue to try to enrol in the most prestigious institutions with highest admission standards. The more exclusive the institution, the greater its value in the labour market. Yet the rise of online education may work alongside other developments, such as the utilitarian approach to education taken by the growing number of adult learners, to reconfigure how institutions are ranked and the relative importance of instructional quality.


Keith Hampson, Ph.D. is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximising value. 

Sharing What Works in Online Higher Education (2 of 2)

This post is Part 2. Part 1 can be found here

The Growing Chasm in the Online Higher Education Market (2 of 2)

One of the key characteristics that distinguishes faster growing, more scalable, and increasingly high-quality online universities (described in “The Growing Chasm”) is the systematic use of knowledge about what works in online instruction and what doesn’t. This handful of US institutions tend to capture more data about student learning, learn from it, and act on it.chairAndnewspapers

As simple as this process sounds, it’s difficult to implement in our traditional colleges and universities, where course design and development is typically a very decentralized activity. Instruction is determined on a course-by-course basis and there’s rarely a systematic, robust process in place for identifying and sharing knowledge about what drives student-learning outcomes most effectively. I recall, as a new member of faculty, being surprised to learn that my colleagues had little to no knowledge of how their other colleagues in the department ran their courses, for example.

This needn’t be the case, though. The required technology now exists and if used creatively in conjunction with basic change management practices, it is possible to increase the volume and quality of information sharing, even within the most decentralized institutions.

Initiatives to drive instructional innovation are most likely to be led by central support units responsible supporting online courses and programs. It’s in these departments that the pressure to ensure quality and bring about change is felt greatest.

The core elements include:

  1. Get buy-in
  2. Define the current state of affairs
  3. Make new approaches clear and easy to adopt
  4. Distribute tools to measure student learning

A Few Details . . .

Pitch it. Put together a clear and compelling description of your plan. Use it to get feedback and solicit buy-in. (It won’t hurt if you get buy-in from people with influence, but passion goes a long way, too.)

Catalogue it. Take an inventory of the instructional practices currently being used. (Maintain full confidentiality of Instructors). Share this inventory, once organized for simple review, with all stakeholders. There will be some surprises. And many educators will benefit from this tactic, alone – given the current dearth of information. “What are others doing?”

Package it. Ask a team consisting of representatives to select 8-10 interesting instructional strategies that they believe would be of value to others within the institution. Showcase these examples, using events, a dedicated website, external conferences, and other means available. Be an insufferable promoter. Reconfigure these 8-10 instructional strategies so that they can be easily understood and copied. Vagueness, here, is your enemy. Be clear, simple and above all, concrete. As Dan and Chip Heath suggest: If you want people to eat a more healthy mix of foods, don’t tell them to “eat low fat foods”, tell them to “buy skim milk.”

Assess it. Implement learning analytics that each instructor can use to measure student learning. If the goal is to have students learn more and more quickly, then the analytics must actually measure student learning, not merely track their behaviour; I call this “engagement analytics”. The type information collected in engagement analytics often includes:

  • Number of page views (per page)
  • Contributions by students to discussion threads
  • Which students (and what percentage of the total cohort) have completed the assignments
  • Number of logins

Engagement analytics do not necessarily measure learning, per se. What’s measured is student activity, which may or may not signal actual learning. For example, engagement analytics is often used to track student page views. The student’s presence on that particular page within the course site tells us that the student has been exposed to that part of the curriculum. But it doesn’t tell us whether the student understands the curriculum. In fact, it may be that the student inadvertently left the browser window open while searching the Internet.

Learning analytics, on the other hand, measure the student’s actual learning state; what students know, what they don’t know, and why. It’s this kind of information that’s needed if individual educators are going to imagine new and better ways to stimulate learning. See figure A. Information that can be captured by learning analytics include:
  • What aspects of the course did the student master?
  • Which students are struggling, and with which concepts, topics and problems?
  • What misconceptions about the curriculum are leading to poor performance?
  • What topics require more attention or better presentation?

Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value. 

An image of a chasm

The Growing Chasm in the Online Higher Education Market

A chasm is beginning to appear between institutions of higher education that offer online programmes. The divide is the result of the different strategies taken for designing, sourcing and managing online education programmes.

A small number of institutions in the U.S. have adopted methods for producing and supporting online courses that have the potential, if not the likelihood, to improve learning outcomes, increase the speed with the institution improves the quality of teaching and learning, increase value (quality/cost). If present trends continue, these institutions could reconfigure the deeply embedded hierarchy that organises higher education.

A couple of scenarios

An acquaintance of mine, currently an Assistant Professor at a mid-size university, was asked in mid-July by her institution to create and deliver a new online course for the Fall (September) semester. In the time available, she had to define the new curriculum, determine the instructional tactics to be used, collect existing resources, and create new materials, including assessments.

Throughout the process, she worked alone. Although an instructional designer was on-hand, the staff member had little time and offered not much more than a checklist of best practices. The Instructor’s budget for the course development? Nil.

Her experience contrasts sharply with practices at a handful US universities. These institutions typically focus, sometimes exclusively, on online education, offer open-admissions, and have centralised management of teaching and learning. Consider this depiction; a composite of a few institutions I’ve had a chance to investigate:

An academic department – after conducting a thorough, regularly scheduled review of learning outcomes – determines that a full rework of a key programme is required. Starting what will be a twelve-month process, the department conducts a deeper analysis of the current programme, consulting with student support staff, faculty, academic leadership, and industry advisors – to define the overarching set of objectives and instructional strategies for the revamped programme.

A team is assigned to the project, including specialists in learning analytics, subject matter experts, managers of assessment systems, faculty, teaching assistants, student support staff, and technology managers.

The institution’s team identifies a number of things they want to offer their students that can be done more efficiently by forming partnerships other universities, consortia, and vendors, so as to complement internal strengths. The course development process ultimately involves more than a dozen people, three external organisations, and costs more than 100k per course, when including internal labour costs. Following the first year of the new programmes’ delivery, a review is conducted to identify where refinements are needed.

Not an inconsequential impact

There are a number of issues of note:

All things being equal, this handful of institutions will offer students higher quality education. By bringing the right mix of talent, resources, funds, and processes together, the institution has a much better chance of providing students with a well-conceived, thoughtfully-executed, and well-resourced learning experience.

These institutions have considerably greater ability to scale-up learning to meet demand. They can build new courses anprogrammesms more quickly, and with greater assurance that each will meet institutional standards for quality.

These institutions pay considerably more attention to the results of their instructional strategies. Internal reviews are common, and many are now turning to analytics to generate even more detailed and extensive insights into what’s working and what isn’t. This knowledge provides the basis for better decision-making, which in-turn can provide progressively better learning experiences for students.

This last quality needs to be underlined.

Knowledge about how to design and support learning in higher education held by individual faculty – whether online or not – is rarely systematically shared with the institution. Teaching is approached as individual pursuit. Indeed, faculty members can work in the same department as other academics for several years without ever seeing each other teach. Each Instructor operates individually. Strictly speaking, this isn’t by design: it’s a by-product of the traditional organizational structure of the institution and conventions of the academic occupation. But the effect of this characteristic is that it limits the flow of knowledge across the institution about effective teaching.  It fits nicely the centuries-old conventions of the occupation, it may ultimately limit the breadth and depth of the knowledge that is brought to bear on each course within the institution.

These upstart universities see knowledge about teaching and learning as the domain of the institution. The institution, not the individual educator, captures, interprets and applies knowledge about how best to serve students.  Knowledge is applied on an institutional level, not on a course-by-course, instructor-by-instructor level.

Of course, the downside of this approach is the potential to suppress the kinds of innovations that can arise from radical decentralization – letting a “hundred flowers bloom”, if you will.

But supporters of this more centralized approach contend that the benefits of a collective, institutional approach to knowledge building and sharing may be greater at this point in the evolution of online education. Higher quality learning, they argue, requires a more deliberate and disciplined approach. At times, I can appreciate this perspective: conference presentations about “how to teach online” offered in 2014 have striking resemblance to those we heard in 2001. We don’t seem to be making significant headway by placing the burden of course design and delivery primarily on the backs of under-resourced individual Instructors.


Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value. 

Image of instructional media

Moving Beyond “Instructionally Agnostic” Educational Software

Learning management systems have been the dominant technology in online higher ed since the late 1990s. These systems are, by design, as instructionally agnostic as possible. They’re designed so as to not impose specific instructional strategies on the educators that adopt them. This design fits with the prevailing division of responsibilities and occupational roles in traditional brick and mortar universities, in which course design is primarily a solo activity. (The LMS was quickly adopted by institutions precisely because it didn’t require changes to the traditional organizational model.)

Instructionally-agnostic software plays an important role. But now it’s time that we start to also use software to extend our capacity as educators. This means moving beyond the “correspondence” model of distance education – in which we use software solely as a cost-effective tool for distributing traditional education materials (typically those repurposed from print and classroom environments). It means using software that captures and embodies our best thinking about how students learn. Instructionally intelligent software extends our capacity as educators – it helps us do more with our limited time, money and skills.

For example, it’s obviously not feasible for most educators offering online courses to provide every student with hundreds of opportunities to apply their knowledge of the material and then to provide immediate, contextual feedback. Yet, educational software can be designed to fulfill this function. And by so doing, we are leveraging software to a far greater extent than with instructionally agnostic software.

Other applications can provide students with customized learning paths. Simulations can allow students to “learn by doing”. In each case, the software helps us provide students with more of the types of learning experiences we think are beneficial.


Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value. 

Coherent, Coordinated, and Consistent Design of Online Courses

It’s not uncommon for online courses in higher education to include instructional resources from a wide range of sources. Resources may include digital content from textbooks (e.g. flashcards), images used in campus-based courses, freely available content from the Internet, print or ebooks from publishers, activities pulled from open education resource repositories, and others.  Some of the material is placed within the course environment, some sits outside.

The “cut-n-paste” functionality of the Internet has made this “bricolage” approach to course design easy and, therefore, inevitable. However, the bricolage approach has also increased the prevalence of online courses with weak instructional coherence, coordination and consistency. By relying on materials from a wide range of sources – each built by different organizations, to serve different users, and to fit into different contexts – we, inevitably, decrease the degree to which each unit of instructional material aligns with the other materials. In the end, it’s learning outcomes that are compromised.

Symptoms of Incoherent Course Design

Instructional materials and activities drawn from a variety of sources can differ in a variety of ways that impact instructional quality. Differences include:

  • Level of difficulty. Instructional materials gathered from different sources are designed for students at very different levels of subject mastery and comprehension.
  • Terminology. Different sources often employ different terminology to describe similar information.  While these differences are often small, and may seem inconsequential to subject matter experts, they can easily confuse learners that are new to the curriculum.
  • Pace of instruction. Each instructional element implicitly assumes a certain pace of instruction through which the student will progress through the material.
  • Level of detail/depth. Instructional elements include different amounts of detail. Asking students to move between instructional materials that include different levels of detail may make it more difficult for them to identify what information is essential, and what is not.
  • Organizational principles. Every instructional element is designed to operate in a particular structure and design environments. Pulling items out of one context and dropping them in another adds unintended (and instructionally useless) complexity.
  • Design features. Visual design features, such as use of color and icons, can be used effectively to improve comprehension and ease of use, but they must be applied consistently.

Barriers to Coherent Course Design

In the classroom setting, the bulk of the instruction is created by and funneled through a single source: the instructor. As a result, instructional coherency tends to occur naturally. In online education a number of factors work against coherency:

  • The ease with which we can find related instructional content on the Internet;
  • Confusing regulations concerning use of copyrighted material on the Internet;
  • The inability of institution staff to produce a wide range of instructional materials at a low cost (due, largely, to the lack of economies of scale in the dominant business model of online education);
  • Insufficient incentives for faculty to dedicate additional time to course design and development, given prevailing compensation and incentive models.
  • The lack of professional development resources for instructors responsible for course design.

These inconsistencies make it more difficult for the educator to provide students with coherent and effective learning. The quality of learning can suffer and the need for student support – from the instructor, staff and others – is heightened. Students should be able to focus all of their limited energies on learning, not on trying to understand the different levels, styles, pace, and sequencing in a grab-bag of instructional element. This coherency, in turn, allows the instructor to focus her time on teaching and supporting students, rather than compensating for inconsistent and instructionally incoherent course design.

In a well-designed course, the instructional materials are fully integrated and coordinated, pitched at the appropriate level of difficulty, presented to the learner with the ideal amount of detail, and have consistent design features (color, navigation). Each element in a course should be built according to a single, overarching design – coherent, coordinated, and consistent.


Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value.