University Business October 2019 - 12

Beyond the News
DISTANCE LEARNING

Changes ahead for the online learning market
Decreased higher ed market share signals shift in online program management
cation Services, iDesignEDU, Pearson
and Six Red Marbles. OPM services may
include market research, course design,
student recruitment and retention programs, and platform management.
With more than 60 competing vendors, market turmoil is to be expected.
Another frustration for providers: More
universities want to add online courses,
but not at the cost or scale provided by
most OPMs, so they are developing their
own limited-scope platforms.

GETTYIMAGES.COM: IRINA_STRELNIKOVA

As more colleges and universities add
online courses to their catalogs, the market share for online program managers
(OPM) has begun feeling the effect.
At the end of July, 2U, an OPM,
issued its latest report on earnings,
which were well below expectations.
The announcement led to an almost
immediate 25% drop in the company's
stock price, although it soon rebounded.
It was enough for CEO and co-founder
Christopher "Chip" Paucek to announce
a change of course, recognizing that the
online education market is in transition.
As part of 2U's strategy, he noted plans
to reduce new graduate program starts
by at least half over the next few years
and lower enrollment expectations. He
said the change was the result of seeing
what was ahead and that other OPM
vendors would face similar challenges.

OPM market players
About 1,460 higher ed institutions serve
some students taking only online classes,
and 525 of those schools partner with
OPMs to provide them, according to
Tyton Partners, an investment banking
and strategy consultancy. In addition to
2U, major OPMs include Blackboard,
Online Education Services, Wiley Edu-

4 paths forward
Industry analysts identified four
emerging trends that will change the
OPM market's direction in the next
decade:
1. The OPM sector matures, develops
as an industry standard and
spawns professional bodies.
A few giants dominate the
market, consolidating a long tail
of smaller subscale operators.
Global publishers and technology
companies acquire OPMs, offering
a deeper and broader suite of
services to universities.
2. University networks form to
develop centralized public
alternatives to OPM services.
12 | October 2019

Drawing on existing university
or disciplinary alliances and
networks, universities team up
to build their own specialist
"network-insource" services.
3. The OPM market remains highly
competitive, with many providers
delivering mostly fee-for-service
and increasingly commoditized
offerings.
4. Universities develop their own inhouse OPM services and hire staff
from OPM providers. OPM market
growth slows as skills transfer
happens across the sector.
Source: HolonIQ, holoniq.com

What the change means
As online learning continues to grow,
the $3 billion-plus global OPM market
is expected to surpass $7 billion by
2025. But to achieve that, and increase
the number of higher ed clients, analysts
predict that more vendors will switch to
offering unbundled, fee-for-service models. As the OPM market matures, providers will expand beyond higher ed and
serve corporate training and coaching
programs and offer corporate recruitment, retention and career services.
Call for transparency
Meanwhile, at press time, 2U announced
a new "Framework for Transparency,"
calling on other OPM providers to follow. As a response to critics who claim
that OPMs affect access to higher ed, the
framework will offer students, colleges
and policymakers data on outcomes,
quality, institutional independence
and more. Analysts say the move is an
attempt to avert proposed federal regulatory changes by showing that the OPM
industry can regulate itself. -Tim Goral
More coverage on online learning:
UBmag.me/online
UniversityBusiness.com


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University Business October 2019

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