The numbers don't look promising for me. Let's assume 100% of the revenue is coming from Signature Track. Coursera has 3.2 million registered users (according to their website today). That's 4,400 paid certificates. Assuming 1 certificate per user, that's just 0.1% of registered users who paid for certificates over 3 months. Although not all courses have the certificate option, I don't think this changes the outcome dramatically.
It looks better when considering active registered users, though I'll caveat that I'm making a lot more assumptions. According to Compete data (YMMV), Coursera's getting approximately 200K monthly unique visitors. If we assume paid certificates are spread evenly over months, that's 1,467 certificates per month or 0.7% of monthly unique visitors. If we assume 50% of visitors are registered users, that translates to 1.4% of active registered users who paid for certificates in a given month (note this also implies that 97% of Coursera's registered users are not active in any given month). This is believable considering that typical MOOC completion rates (certificate or no) are reportedly between 5-10%. Coursera also said yesterday that the completion rate is 70-80% for users who paid for certificates, and that as a company they are committed to keeping the courses free.
Wrap-up
The Inside Higher Ed article mentions that Coursera is suggesting users put Signature Track courses on their resumes. I think this is a weak carrot and will take a LONG time to happen - since when did employers make hiring decisions based on specific coursework?
If my analysis above is ballpark correct, a few interesting things might happen over the next year:
- Bundling Signature Track courses together into a year of transferable college credit (similar to community college model). Coursera could charge a lot more for this.
- Offering other 'premium' services to try building other revenue streams, such as personalized tutoring and grading
- MOOC-only, on-demand professors. MOOCs are costing up to $50K and 100 hours to produce (note: the university bears some or all of these costs). Not to mention the hosting and streaming costs for the 95% of students who won't finish the course and the 98% who aren't paying for Signature Track. It would lower costs dramatically to break from the university schedule, as well as re-use the materials.
- Lead gen for students likely to pay for services
- Converting into a non-profit (unlikely, but the mission of keeping their core content free will be challenging)
I love what Coursera is doing and I hope they figure out the revenue & cost model. They've raised $22MM so should have some runway, even with close to 40 employees.
