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- Hi everyone, welcome to today's WCET Webinar.

Navigating the OPM Marketplace:

Picking the Right Partners While Avoiding Market Chaos.

My name is Megan Raymond, I'm the director

of programs and sponsorship here at WCET.

As we go through the conversation today,

feel free to add your questions to the question box

and comments to the comment box.

I anticipate that we'll have a lot of questions today.

We hope to get to most of those.

If we don't, I'll pull those out and share them with Phil

and we'll do a follow up blog post.

We'll be sharing the link to the PowerPoint slides

so you can follow along with us.

We'll also follow up with any additional resources

that were shared and a link to the recording

which will include captions.

If you'd like to follow along,

we typically have a pretty active Twitter discussion

and the hashtag is WCETWebcast.

Today we'll go through brief introductions,

background and overview on the OPM marketplace

and services, the current landscape,

then we'll get to a moderated

Q&A as well as audience Q&A,

and conclusion.

Hopefully we'll wrap up within 60 minutes.

Again, if you have any questions,

enter them into the question box.

We typically hold all questions until

the end of the presentation,

but feel free to enter your questions

and then if I need to interject

and ask Phil, I certainly will.

So, keep those questions coming throughout.

Again, I'm Megan Raymond.

I'll also be your moderator today.

And our speaker today is Phil Hill

with Mindwires Consulting.

So, Phil is notorious for being an EdTech

speaker, blogger, and market analyst.

He's analyzed the growth of technology

enabled change for educational institutions

for many, many years

and his clients have included WGU,

California Community College System,

Iowa State University, and Pearson Education

among many others.

Phil, I'm gonna ask you to do a brief self introduction

but I wanna lead with a question

that may eliminate a little bit of your past.

But if you weren't the PhilOnEdTech,

what would your previous or other occupation be?

- Well, essentially, I'll call myself

the notorious Phil from now on.

Thank you for that. (laughter)

Well, what I was doing before EdTech,

is I was working in a field with -

It was engineering.

I have an engineering background.

I was dealing with real time image processing systems.

So, I don't know that I could have

stuck with that long term

because I'm just too drawn towards education.

So, if I weren't in this position

I'd be finding some place of chaos to be involved.

Leading some project,

or getting in trouble somewhere.

So, it's a hard question to answer.

- I really thought that your were gonna

answer with a rockstar.

But that's a great answer. - Yeah.

But I'm well aware of my limitations

on skills for myself.

- Well, do what you're good at.

I'll go ahead and pass it off to you, Phil.

- Sure, and just for additional context,

so that people sort of understand my point of view

and where I'm coming from.

Mindwires Consulting, we help organizations

that are dealing with technology

enabled change directly tied to teaching and learning.

So, please don't ask any ERP questions in the background.

We're not dealing with that.

And we try to be neutral market observers

and really trying to help organizations

make good decisions.

So, we try not to come across like we favor

this technology or -

We're vendor neutral is one way to look at it.

But we'll try to help explain things.

And it seems to me that what we've chosen

is we've said, "hey, we need to have a topic today

"that's less contentious than the congressional

"whistle blower testimony today.

"But only slightly less contentious."

In the field of online program management lately

has been incredibly contentious.

And there's a lot of noise that's happening.

So, there's a lot going on.

So, online program management,

I think it's important to try to say,

"can we understand the substance

"and see if we can cut through some of the noise."

Specifically so that schools

and organizations can make better decisions

about what they should be doing next.

Since it's a field that's not very well defined,

I do wanna call out what we mean by that

or you know, the way I'm describing it.

The set of services around a company that's

helping a school either create

or deliver an online program,

the way I've seen it categorized as the most

useful is you have marketing,

and recruiting, and market research efforts

that they're providing for a school.

But not the actual admissions.

That's typically handled by the school itself.

And unfortunately, the marketing

and recruitment market research has been

sort of at the core of this market.

And it's also been a source of some of the,

a lot of push back we've seen lately.

I'm hoping over time

and I believe we're seeing a shift more towards

course and curriculum design as being

a key element in OPM services.

How do you do effective, engaging designed courses

and curriculum?

There's also student support services,

call center, help desk, retention,

degree pathway, various support.

Now, that's student but it's also support for faculty.

And then finally technology infrastructure

and analytics.

This industry actually came out of a place

where the LMS provision was an acute part of

what it provided, hosting of a LMS.

These days, in most cases, you have an LMS agnostic view

and quite often using the university's LMS

but still the overall integration of systems

and using data and analytics to inform it.

So, these four broad categories are what we tend to see

as an OPM set of services.

So, I think it'd be good to -

We can't capture all the history

but just say what does the landscape look like today?

If you just kind of say where is the market today

and how do we understand it?

We have this next chart to try to

give a better view of that.

So, with this chart,

and I'm having to put on my glasses

to be able to see it as well,

we're trying to call out -

This is not meant to be comprehensive,

listing every vendor that does everything.

We're trying to give a landscape

so people can understand the high level

of what's happening.

And the traditional market has been known

by the top portion.

So, on the left you have a business model.

You know, tuition revenue share is the revenue model.

Down to fee for service on the bottom.

But also hybrid in between.

And we'll discuss that a little bit more depth.

If you look at what the outcome is,

you have that broadly grouped into degrees

both undergrad degrees and grad degrees.

And as you can see from the landscape,

the core of the market has been in the grad degrees,

particularly the master's level.

But there's also growing emphasis on

nondegree work, certificate work.

And it's even blending over into professional,

corporate training.

Or job entry type of skills.

So, this landscape tries to capture where we are.

The top rectangle,

these are the large customer base

full service OPMs.

It's what people tend to identify with the market.

You have Pearson which had acquired VANET

plus they had their own operation

and so Pearson has a large OPM business.

2U has long had their grad degree programs,

they've also acquired Trilogy

and GetSmarter to broaden out what they do.

And they have a partnership with Keypath as well.

Separate company but they have an investment in them

and they have a coordination.

Wiley, which had acquired Deltak

and has more recently acquired Learning House,

Academic Partnerships, and Bisk Education.

And these are sort of the biggest,

biggest, longest term OPM vendors

that people identify with the market.

They tend to be tuition revenue share,

they tend to be full service.

And clear other elements of the market,

cause the market's changing.

It's no longer just one thing.

So, as you sort of go down,

you do have smaller customer base

that still might be tuition revenue share

and full service.

We have several listed here.

You know, certainly HotChalk, Everspring, iLaw,

I've seen a lot of activity from them lately.

Helix, All Campus.

So, there's a series of OPMs

but they tend to be, they're categorized

a little bit lower just in terms of the size

of their customer base.

But then we have two new areas

that have really come on lately.

One is the MOOC providers, I'm skipping one.

The MOOC providers really got into this market with Udacity

and the Georgia Tech masters of computer science deal.

And they've scaled that up.

But more recently Coursera has gotten in

as a matter of fact, the main business

of several of the MOOC providers is

really as OPM providers.

Partnerships with schools, dealing with revenue share,

or developing online programs.

And this is a model that the promise of it is,

"hey, we can enable lower cost degrees

"because we have to do less recruiting

"cause we have the MOOC larger industry base."

That's the promise of the market.

And then finally, the most recent addition is

really what you would call,

you can call the poor profit conversions.

So, you could think of this as,

this is a little bit interesting.

Orbis was acquired by Grand Canyon as sort of an OPM arm.

And Grand Canyon spun off their university

into a non-profit.

But essentially a form of for profit

is now operating an OPM.

Same thing with Kaplan in terms of the Purdue Global

and other deals that they're doing.

So their are different flavors of OPM.

Down at the bottom you're getting into -

And this is where a lot of the growth is,

a lot of the change in the market

is coming for really are fee for service partners.

Noodle Partners can do full service

or they can do a la carte.

But they really have emphasized the fee for service.

iDesign, Extension, even the LMS providers

Blackboard and D2L do a lot of the OPM.

Again, this is the part where I do not

want to imply that it's a comprehensive listing.

But I wanted to give a sample to show you how much

the OPM market has actually been changing

and the different flavors that are coming on.

Because there's a lot of a narrative

that the market is moving from point A

to point B.

Where as we see it much more as it's expanding in options

and varieties, and models.

And it's getting hard to categorize.

I wanna jump into a little bit more detail

on some of these key points

to help understand that.

So, with the first one,

we'll go ahead and do the first one.

This is the first time I've actually tried

using the PowerPoint zoom feature.

So, we're gonna see how that goes.

If you look at the market origins,

I think it's important to understand

the OPM market

really began in the 1990s.

This is not a new phenomena.

It might have grown recently

and it certainly is in the news quite a bit more.

But the origins are in the 1990s.

Bisk Education, for example, with Regis University

and their online MBA from the mid 1990s.

Deltak which went on

and went through several changes

but got acquired by Wiley,

they were founded in 1997.

So, the origins of the market really

go all the way back to the 1990s.

And one way you could look at this

is this is at the same time that online education

on its own was growing.

And you had sort of different models were expanding.

You had the for profit sector,

the University of Phoenix, DeVry, you know,

the various for profit schools.

They were rapidly growing their online programs themselves

and designing the programs in their online

operations directly starting back in the 1990s.

But you also had a series of mostly nonprofit schools

that began their online operations

also back in the late '90s and early 2000s.

And so this would get into a lot of where people -

The Sloan Consortium schools or set of schools.

It was an important subset.

And so, when you had Penn State world campus,

You had UM, the University of Maryland University Campus,

so UMUC.

You had various nonprofit schools

who really began their online offerings back then

and they took a long time

but they've developed everything

they needed to do to run these online programs.

In parallel with these,

there was a market need that said,

"hey, what about schools who aren't for profit,

"they haven't been long term, you know,

"starting back in the '90s,

"they didn't perceive that they had the capabilities

"to do this on their own.

"How do they develop online programs?"

That's where the OPM market started.

Was saying, "how do these nonprofit schools

"who are not a long term schools,

"that have been investing in brand new operations.

"How does a traditional school develop an online program?"

And that's where a lot of this came about.

And you know, there were a lot of changes

that happened in the 2000s

and I threw up some of the examples such as Deltak

and Collegis and then they separated and got acquired.

So, it's a confusing world

but there was a lot of activities going on

in the '90s and particularly in the 2000s.

And then we had Embanet and Compass merge in 2010,

really created a much larger force.

And you started getting more

and more of this momentum building up at this time.

But the market really started much earlier

than people seem to imply.

Quite a lot of the news media makes you feel like,

"hey, this is a new phenomenon that started

"back in 2010 or 2012,

"and it's something brand new hitting education."

And there's really a lot more to it since then.

And I think it's important to understand that history.

To be able to understand what might happen

moving into the future.

All right, so if we zoom back out,

another area that's worth doing is

understanding a little bit more detail

because there are different models.

How do we actually define these?

So, let's look at the next zoom in.

There is not a commonly accepted definition

of these terms.

But certainly my suggestion

and the way I'm trying to use it within this webinar,

and a lot of the blog posts,

you have online program management.

And that tends to be the subset

but they're the primary partner to enable

a higher education institution to create

and/or deliver online.

The primary partner is really a key point.

We're not trying to say every vendor

that is helping a school as they go online.

We're really looking at it where a school says,

"we need help going online.

"Here's how we're doing it.

"We're working with these guys to make this happen."

So, OPM is a primary partner

and they tend to do full service.

So the full set of categories that I mentioned earlier,

of services all bundled together.

And typically has been tuition revenue sharing

as the business model.

That's historically been where it's at.

There's been a new category that I would describe,

and I've seen different ways that it's described,

an Online Program Enablement, OPE.

And this, again, I'm trying to define this as

primary partner still.

So, it's still the main company

who might be helping a school do this.

But it's broader in context than just OPM.

Because you're getting into,

for example in red highlighted some of the differences.

You're getting into well, maybe it's not just

an online program.

Maybe it's a hybrid program.

A mix of face to face and online and experiential programs.

And this is also important because as you start

getting into boot camp type of offerings.

The other difference is,

for OPE that I see more broadly,

that's typically a significant subset of

the services that I mentioned earlier.

But not necessarily a full service company.

It's somebody who says, "hey, we do -

"We are the primary partner but we don't do course design."

or, "we're the primary partner but we don't do recruitment.

"you know, but we help all the other ways."

So, OPE, the way I'm using this,

is just this broader case that we're getting into.

It's not just one thing that's tuition revenue sharing,

that's full service bundled,

and in working that way it's much broader

and it includes hybrid.

Now there are other categories

which I don't consider OPM or OPE.

I only mention them here to acknowledge

there's a lot of important companies

who are helping schools go online.

Learning Management System, Courseware,

other types of educational technology,

services company who do development and integration.

These are all important

but I'm not saying those are the same as OPM or OPE.

So, the definitions to at least try

to have a common language.

That's how I'm using it.

All right, if you zoom back out,

I do wanna highlight another point

because this is, you know, key to the definition.

So, if you look at this unbundled view,

it goes beyond just the four categories I listed.

There's an excellent report that was done

from the University of Cape Town that looked

at unbundled university

and University of Leeds, University of Cape Town

I have a link.

I highly recommend people get that full report

'cause there's some really valuable descriptions in there.

In this case they called out a lot

of the services in much more detail that might be out there.

And it's a great map.

It's a map that's useful for schools

who are trying to do vendor selection.

It's a good map to check and say,

"hey, what do we do,

"what do we want the company to provide?"

So I just find this to be a very useful map

and I do recommend this report as a good way to get this.

All right, so if we zoom back out,

and then the final one is,

let's get into start transitioning to

what becomes contentious.

This, by the way, also comes from the exact same report.

So, I will reiterate the strong recommendation

that it's a great resource for you.

All right, so this thing is a good description of,

you know, the various things.

You can have -

We'll start from the right.

Full service partnership, that's a lot of the

traditional definition of OPM.

A private company invests in university online

education in return for profit share.

That nuance is important.

We're not just talking the basis

of this revenue sharing model in the funding model

is not just, "we take a percentage."

There's an investment that's happening.

It might not be the same amount that it was

in past years,

but it can cost millions of dollars

for a company to invest

and start up an online program that's set up to scale.

And so a question first,

who is actually funding that investment

that happens before you get the tuition

that can back up the payments?

In the full service model,

it's the company, the OPM provider who's

doing that investment at their risk

and then in exchange for tuition revenue share

or profit share.

So, naturally, the model does focus on marketable

online courses and programs.

There's gotta be some potential payoff

for this model to make sense.

If you skip over to the left, in house provision.

We mention that there's quite a few schools

who have done this work themselves.

So, for example, the largest fastest growing school,

Southern New Hampshire University,

they have designed their operations

to be their own service provider.

They do this in house.

In house production and delivery,

they build up their own capability.

I mentioned Penn State World Campus,

you know, there are quite a few nonprofit

schools that have invested real money

in their infrastructure, their operations,

their capabilities to be able to do online programs

but particularly online programs that can scale

beyond just a few dozen students within a program.

Now in the middle,

we've always had individual Ed Tech companies.

But in the middle at the OPM or OPE level,

this is the newer category that's changing things.

These are people who are saying, "hey, we'll be

"you're partner to do this online program

"but we'll do it on a fee for service basis.

"You, the school, need to pay directly for marketing."

You know, and it's more of a standard contractual model.

And you pick and mix what services you want.

So, it tends to not be full service.

It's more of a, "which ones do I want,

"the ones that I'm providing in house as a school

"I obviously am not gonna pay for."

These are the common funding models

but as we're gonna get into a little bit later,

it's important to understand these are not

just three individual choices.

Fee for service and full service

are not binary choices.

There's a hybrid and a real mix in between.

And we'll get into that.

Okay, so let's zoom back out

but I did wanna take a chance in case

there are any questions, Megan,

that were worth addressing ahead of time

before we get into some of the more chaotic

aspects of the market.

- Yeah, you bet.

So, let me scroll over to the Q&A.

Calvin, our friend Calvin Bentley had a question.

Giving many schools use OPMs

and two use recent drop and stock prices,

is this the reflection the market is too crowded?

Competing for a limited amount of students?

- Two things, first of all, not surprised

Calvin has the first question.

Second thing is, yes, that's a great Segway

into the section we're going into.

It is a crowded market

in two different ways, not just among OPM vendors

but among schools.

So, absolutely it's a crowded market.

I do wanna treat that more as a Segway

into the next section.

So, I'll answer more fully as we get into the next section.

Okay, so it's a great set up,

thank you Calvin for prompting us to go this direction.

You certainly will read a lot about

that this is a growing market.

The OPM is growing and it is.

And there's companies who are making a lot

of money off of this.

And online education is growing.

And there's sort of a narrative that gets

thrown out there that, "hey, everything's growing

"and everything's easy."

But there are two key things to try to

understand with this market is first of all,

it's crowded as Calvin had pointed out.

It's not easy.

But it is also expensive.

So, go back to the comment about

companies who are investing millions

and are setting up a program in the expectation

that they're gonna make money three,

four, five years down the road.

It'll pay off later.

That makes it an expensive proposition.

And as online education has grown,

that's gotten even more difficult.

So, this is a very difficult and crowded market.

And it's an expensive market.

If you're a company that's playing in here,

you have to be careful to pick your right model

and your right niche.

Otherwise, you're gonna bite off more than you can chew

and there's a lot of things happening.

So, the picture I have, as you can see,

I almost view the market as a scene from Mad Max.

Yes it's growing but boy, it's really chaotic and dangerous.

And so, one way to look at this is everybody -

There's a lot of things going out there,

a lot of the business driver of the market

is the fuel truck of college online program revenue.

And you have a lot of barriers

and little disasters that've happened

throughout the process.

I mentioned one.

So, Eastern Michigan faculty had a big protest

about an OPM relationship at their school

And that changed what was happening.

There was a case where

a synergist was going to

be servicing a program at USC.

And that fell apart at the last minute.

Just last year,

or maybe I've lost a year,

Greenwood Hall basically imploded.

They shut down the call center,

they had just built a new call center,

and shut it down almost with no notice

right before Christmas.

You have DeVry, they had an OPM that they

were trying to spin up called IES.

They essentially left the market.

And then I mentioned the University of Florida Online.

That one started out as an OPM based deal

and it did not work.

And so, that's a case I need to -

You'll see that it hit some rocks

but then you see this new one that went passed the rocks

I didn't quite get the graphic right there.

UF Online has redefined itself to do this in house

but the core to that is they've changed

their expectations on student enrollments

and how they can fund it.

So, they had a huge wreck, if you will,

but the also, they very honestly understood

what was happening, changed their model,

changed their expectation,

and it's a very successful program now.

The OPM basis of it is what I'm representing

as a crash that happened.

2U which has really been the face of the market

for a long time they were positioned as

sort of the car that was way on the outside.

They had a niche market, and they stopped

and they avoided a lot of this chaos.

So, their business model because they went after

elite institutions that other companies

weren't going after.

And they had a model that worked there.

And they could work on their own.

They had a small bump with Semester Online

where they tried to do undergraduate

as a consortium approach,

that fell apart.

But they kept going on.

More recently, however,

and Calvin eluded to this,

they had a large change in the market

perception of them

with their announcements on July 30th.

And I have a blog post to help explain this.

But their stock price really crashed.

And a lot of that was based on,

as they explained it, the market has changed.

Not just the OPM market,

and competition between companies.

But more importantly, it's getting to be

a crowded space between institutions

who are trying to do online programs.

So, a lot of this competition is competition

for students between the schools.

That has changed the operating -

The model on the assumptions financially behind 2U

and it's part of the reason they've

really broadened out.

They're now, I mean, they've done the acquisitions

with Trilogy and GetSmarter.

But they're also now offering fee for service

as part of their new partnership program

for schools that are already using them

as a traditional OPM.

So, I don't wanna harp on it too much

other than the fact that, here's a company

that really has been the face of the OPM market.

And for a long time they've been

sort of outside the fray of all this chaotic

market dynamics.

But even they're getting caught up in it now.

And it's a reflection on how chaotic it is

but also how crowded it is.

And how much competition for students are out there.

So, long winded way, I do wanna point

one other point here, we'll get into some others

is it's a chaotic Mad Max type market.

And if you haven't seen the original Mad Max,

I also endorse watching that.

What I would like to say is California AB1345

and the pushback on the longterm revenue share contracts.

What that's getting called out is,

there is an active move with policy makers,

regulators, state law makers, particularly in California,

who are trying to rein in

or change how the OPM market works.

And in particular the revenue sharing aspect of it.

And so far, you know, it's causing some changes

but there's a lot of noise behind it.

And these are barriers.

These are things that people need to be aware of there.

We're gonna continue having a chaotic market

even moving forward.

So, we'll go into that in a little bit more detail

but this really is hopefully a set up

to talk about a growing market, a lot of opportunity,

important market for nontraditional students

in particular, but it's very chaotic.

So, let's jump in on a couple of these specific elements

that we're referring to here.

Go ahead with the first zoom in.

I love that feature now.

Okay, so continuing this talk about the

pushback against the OPMs,

It would be a mistake to look a lot at the things

that are happening such as the article

in the Huffington Post.

And it's in the top right about the creeping

capitalist takeover.

And then the Century Foundation report

that came out recently really talking about

for profit middlemen OPM driving up the cost

of online higher education.

And an unintended consequence of that

is because of a lot of the legislation

happening in California, in this area,

that's what led to this summer where people recall

there was a case where all of a sudden

California residents who were taking classes

at out of state, nonprofit schools,

nonprofit online schools were no longer

eligible for federal financial aids.

So there was a real kerfuffle that happened in July.

It got resolved but that's part of this whole

coordinated pushback.

So there's a lot of questions saying,

"hey, if you've got this market,

"are schools selling their future?

"to get these online programs?

"Are they giving away revenue

and preventing themselves from building up

internal capabilities moving forward?

And are corporate profits taking priority over students?"

That's sort of the question that's being addressed

and that has really led to a strong

and local pushback against that aspect of the market.

Now there's counter pushback,

and I have been part of that I'll be honest,

so in the bottom left I'm pointing out

that when the Century Foundation

came out with their report,

it was very much a position paper

but it was masquerading that it was a research study

where you actually research, see what happens,

and then make conclusions.

They had their conclusions ahead of time.

So it's leading, there's a lot of pushback going on

but there's also a lot of shotty analysis

and shotty media coverage based on it.

And certainly, our perspective is

it's not helping the matter for people to understand

what's really happening with OPM companies,

should they work with them,

what's the right model for them?

But there's a lot of noise and a lot of pushback.

It's probably the most common question that you get,

"hey, is this gonna -

"Is this new pushback does this mean tuition

"revenue share OPM model is dead?"

That's probably one of the most common questions

that I get.

From our perspective of what we see,

no, we don't see it as that model's going away.

We see new models coming on board

so schools have more options, there is more chaos

but so far, we have not seen any indications

that the revenue share whole service model will disappear.

But it's an open question.

I gotta acknowledge that there are some legitimate

parts that need to be addressed.

If you take individual deals, are they good deals?

And let's be honest, there are a lot

of awful contracts out there.

And some of what's awful is just, they're very shallow.

The market grew up where so much of the activity happened,

it wasn't coordinated.

There wasn't strong negotiation on the terms

and how you exit conditions if you need to change partners.

And so, there is a problem with some contracts

that really are unfair financially.

There are some contracts that are just ill defined

and problematic for a school.

And then there's also a very legitimate question

about the cost of education for students.

And how do you lower cost for students?

So, there are legitimate -

I don't wanna imply that there are no legitimate

questions, there absolutely are.

But there's also a lot of noise

that's coming from this pushback

that I believe is problematic.

But it's out there.

So, I wanna address that

and, you know, that's a major part of the chaos

we're seeing right now.

All right, so if we zoom back out,

I wanna make sure we leave ourselves time

for questions on that as well.

Let's go to the next one.

This gets to the false binary.

There's one of the biggest problems,

and even understanding however you stand,

if you agree that revenue sharing is not the way to go

or you think it is the way to go,

it's getting presented too much as opposed to,

you know, do you want clean air or clean water?

You can't have both.

Well, the reality of the matter is

there's a lot of hybrid options out there.

This does not need to be one or the other.

It's tuition revenue share versus a fee for service.

That's a false argument that's confusing matters.

Another case I would like to point out in the

Newman Seinfeld world,

I won't say who's who there's a lot of back

and forth that is harmful to the discussion

between two companies.

But Noodle Partners, they're the ones advocating

fee for service but they offer a form of revenue sharing.

Now, they will argue and say, "hey, this is short term.

"It's transparent, and then once you pay it back

"you move to fee for service."

So it's a different form but they offer revenue sharing.

There's a percentage of tuition that you can

get into a model with them.

Or that's how they're getting paid as part of the thing.

Likewise, 2U who's been the face of the OPM market,

they are no longer just based on tuition revenue sharing.

They are actually branching into fee for service.

So, the two poster children for fee for service

and revenue sharing they're offering hybrid models

and that is consistent.

There're quite a few companies who will offer

a mix of revenue sharing and fee for service.

So, what's important is not to view one versus the other.

View it as more of a spectrum or a set of options

that schools need to figure out what's the

appropriate model?

And quite often it's what's the appropriate

model for this online program?

You might have a different answer for

an online business degree than you would

with an online humanities degree.

And you do see a lot of schools who have

different OPM or non OPM programs within the same school.

But the key point here is that it's a false dynamic

to say it's one versus the other.

There's some important questions

but it's not an A versus B question that's going on.

All right, if you zoom back out,

we're part of where I think we're getting to

why this is becoming so contentious

is through the '90s and the 2000s,

you certainly heard a lot about the for profit sector.

Online education was a growing case

and a lot of people talked about it.

Then you certainly heard about the University

of Central Florida, Penn State, you know,

the ones that I've already mentioned several

examples of the longtime online programs.

But it was not yet well known

this other case of nonprofit schools

using OPM providers to actually do a program

and they were not managed centrally.

These relationships really

have been characterized as "Deans Gone Wild".

It was an era where individual deans

at academic institutions,

they made up their own decisions

and there was no real central coordinating,

coordination from the central school

or university on contracting or anything.

And so we had an era where you really had a lot

of that happening.

Well, now it's getting to online education

is becoming core to the mission of so many universities

and it's changed the dynamics.

So, if you go to the next zoom in,

the way I liken it is through the 2000s,

through 2010 or 2011,

nonprofit online education programs,

these were the kids playing in the corner.

Faculty groups in particular,

they might not have liked it

but they said, "okay, that's continuing education.

"or that's just the MBA program,

"that's very isolated, I don't know who

"those kids are but as long as they keep

"playing in the corner, they're not bothering us."

The whole market has changed

and the online is strategically important

to most schools now.

Doesn't mean they have to do it

but they need to know what they're doing or not.

So, these kids are no longer playing in the corner,

now they've moved throughout the whole house.

And they're causing a lot of chaos.

And so there's sort of a shock to the system

that's going on that now we do need to address

what does it mean for a nonprofit school

to do an online program that needs to be run

differently than how we've done face to face

for all these years?

We're targeting nontraditional students,

we need to do 24 by seven support.

Quite often there's team teaching instead

of just individual faculty designing courses.

There's just a lot of questions

that get raised by this.

And it's not easy to deal with.

And because it's becoming so pervasive,

you have another challenge for the next slide.

And that is traditionally you've had sort of

these ed tech enthusiasts, the innovators,

early adopters who are trying stuff

and they wanna go out and, "I'll figure something out,

"I'll put it together."

But then you have sort of technology adoption

curve points to mainstream.

People who are much more conservative.

"Okay, I'll do this but it better work.

"You know, I don't have too much time,

"don't make this too hard on me."

The challenge we have is that schools need

to support both types now.

You have these people who used to be

the kids playing in the corner

but now they're pushing other areas.

But you're getting involvement with more

mainstream of the school

and how do you deal with this?

The chasm is just pointing out they're very

different group dynamics.

And it's very difficult to deal with that.

So, this is part of the reason I think we have

so much media noise and so much chaos going on.

Some of it's because it's a crowded market,

some of it's because it's an expensive, difficult market.

But some of it's because we're dealing

with very important questions about the

academic mission, the role of the faculty,

the cost to students for education.

A whole bunch of issues are getting raised

and we need to deal with them or need to get them resolved.

So, that's part of the reason things are so chaotic now.

So, let me go to one more slide

and then we'll do it more of an open question

because I believe we have quite a few questions,

or I hope we do.

- Yes, we do.

- We would have an awkward silence going on.

- No, there's no awkward silence happening.

We have a lot of questions. - It might be awkward anyway.

So, one thing is we're moving away from a world

of "Deans Gone Wild" to a more coordinated

institutional approach.

I'm seeing more often where universities, for example,

are saying, "okay, we need to get control

"over these OPM contracts.

"We can't just leave it to individual colleges.

"We need to have common standards."

And I'm seeing that more and more.

So, the era of where the decisions are getting made

and how they're getting coordinated is really changing.

I go back to this point, the online market

itself is crowded.

Competition for students, even among schools

regardless of whether they use an OPM or not,

the nature of online, you don't just have

a handful of OPM.

I mean, online MBAs, you have you know, hundreds

of them out there.

You're getting into very localized competition areas.

What are the schools in a 150 mile radius

that also have an online program in this area?

That's my competition.

And it's a different view than it used to be

even several years ago.

Now, there is an increased focus on oversight

and transparency through regulation.

Now, that could be considered an oxymoron.

You don't always get that out of regulation.

But certainly there's a focus on we've gotta have oversight,

we need more transparency of who's making money

and how what's being provided,

what are the contractual terms?

So, we've gotta deal with these questions

that are getting raised both at state legislatures,

the federal government is debating some of these issues,

but it's also being debated in public policy circles.

And that's gonna continue.

But there's an increased focus on that.

And expect that moving forward.

And that will hit not just OPM companies but schools.

There is gonna be an increased focus on economics

and part of what that means is there certainly

seems to be a mega trend where no longer

are masters programs the sweet spot for online

simply cash cows for the rest of the school.

There's starting to be an increased focus on,

"hey, this program costs too much,

"what's the student debt for this master's online program?

"And how can you make it more affordable?"

And there's gonna be increased focus on the institution.

I'm seeing schools now are saying,

"okay, I'm very open to revenue share

"but how much am I spending for that investment

"money that I'm getting coming in?

"You know, am I effectively -

"You know, what am I paying in interest?"

Is one way they're starting to look at it.

So, this focus on economics both for student cost

but for also for the institution to have

a more mature understanding of the economics.

That's going to keep increasing in the future.

And then the final one, I see it happening

but I'm admitting this is somewhat aspirational.

This is a key one I hope happens.

Is we need to focus much more in this area

on engaging course design and support.

So, basically academic quality is becoming more

and more central to the potential success

of online programs and OPM relationship.

Not just can you recruit students

and get them in the door,

but what is the quality of the education being provided

and how do we improve it?

So, it's always been there but I see

and I hope that this area is really

gonna be ramping up in the future

and a key issue to address moving forward.

But with that in mind, I wanted to leave

some good time for some questions.

As many as we can handle within the hour.

So, I'll turn it to Megan, fire away.

- Okay, thanks Phil, so we have 22 questions

plus a few in the chat

and we certainly won't get to all of those

but I'm just gonna go through what I can

and hopefully we can wrap up at the top of the hour.

And like I mentioned at the beginning of the webinar,

if we can't get to everyone's question,

we'll certainly include these in a follow up blog

so stay tuned.

Arthur had a question that piggybacks

on Calvin's previous question.

What's your take on why grad programs over

undergrad programs, is it the electives

and our core requirements?

- That's part of it, I think one of the most

obvious ones is that once you're getting

into masters programs,

students by definition almost are more focused

on what they need to get

and why they need to get it.

You don't have the problem where, "hey, I'm

"going into an undergrad program."

What are you trying to get out of it?

"I'm not quite sure, I'm trying to find myself."

Or, "I just came out of high school."

Students in the masters level tend to

be much more career-oriented

"I need this masters in this field

"for a teaching credential or a social work credential."

So there's much more focus on why they're in school

and what they need out of it.

And they typically have more of

a time management perspective, you know,

"I've matured enough that I can control my time."

Because that's important for online education.

So, I think that's actually one of the biggest

reasons they're very different.

And one other I would call out,

is you don't have as many tuition strings

attached to nonprofit public colleges

and universities at the master's level

that you do with the undergrad.

There's a lot more leeway on charging more money

in the master's programs than you can do

for undergraduate.

So, if I listed, those would be three of them.

One that Arthur mentioned

and the two that I added to it.

- Great, thank you.

And this sort of reminds me of what I was

witnessing with the whistle blower

discussion earlier today

but Josh Kim has a question about

can you imagine a scenario where OPM critics

like Kevin Carey, analysts, other leaders,

and schools all come together for a collegial discussion?

- (laughter) I'd rather pay to see the opposite.

No, more seriously -

Today on Twitter, there is an interesting

conversation that was going on

that was triggered, as a matter of fact,

from a share from Josh Kim's article that I shared

and then the conversation went on.

But we had somebody from Noodle

and somebody from 2U who were debating

about the transparency initiative

where 2U is sort of proactively saying,

"here's how we're gonna be transparent.

"We're gonna release this data to sort of

"say what we're doing

and we call on other providers to do the same."

Noodle and other providers are skeptical, if you will.

And there's started to be a debate there about it

but there was a great comment about boy,

that would be -

I think Trace Urdan said, "that would be a great

"way to deescalate this conversation.

"Let's get these two people debating things

"in a productive way in public."

So, I think if certain critics

and certain competing views at certain levels

yes, I think we can have more productive conversations.

However, I think there's a deliberate,

just like the whistle blower issue today,

there are deliberate intentions from both sides

or different sides to not resolve these issues

in a very, you know, friendly manner.

So, I don't think that you're gonna get rid of the noise

but I think that it is possible to get very

productive conversations dealing with the issues

from different sides.

But that won't get rid of the big criticisms

and debates that are going on in public.

You have to tolerate both is the best case.

- Right. That's the nature of competition.

And here's a question from Laura Pasqueenie, hi Laura!

Do you see the expansion of OPMs/OPEs market

being driven by the lack of institutional support

and structures versus demand

and competition for online learning programs?

That's part one, then can universities find

the resources they need internally

or will this be the trend of the future

to rely on external providers?

- Oi, oi, well, one thing to be careful of,

it's a great question but it's not just

the amount of resources what's really important

to understand is a lot of this market has come into play

and it's still here not just because, well, how many

resources will the school throw at this if they

don't have enough,

it also gets into are you willing to operate differently?

When you're looking at online students,

tend to be nontraditional students,

you look at a marketing department for

a traditional school,

their methods,

their willingness to reach out to students

very quickly after they have a request coming in

is quite often limited.

It's not just a matter of resources.

It's an organizational design

and a willingness to do things differently.

That I think is the bigger reason why this happens,

is schools being willing or capable of

operating in a different way as well as

the amount of resources.

So, I'm not sure if I fully answered your question

but I think that's driving the market

and I think that will continue.

I don't think we're getting a broad based

all of nonprofit schools will operate differently.

I think we're always gonna have this challenge

and therefore you're always gonna have

somewhat of a need for this market.

I don't think that that need is going away,

is my gut feel.

I didn't really answer you but at least tried to.

- All right, here's a question from David Stone,

what have you seen in the way of intellectual

property ownership components as part of the OPM agreements?

Early on I heard a lot of concerns about the

ownership of content when partnerships were new.

Is the ownership of content IP still an issue

or a factor?

- It's less of an issue right now.

Particularly because we're moving away from,

you know, from what we've described as "Deans Gone Wild".

We see how poor contracts that really didn't

clarify who owned what,

and there were some big assumptions in place

about the vendor maybe owning it.

Today you see what I believe are much more

mature contracts that call that out

and typically it's pretty clear that the IP

belongs to the school.

I wouldn't say in every case

but I'd say in the majority in cases that we've seen,

the IP is much more clear.

So, I wouldn't say it's a nonissue,

but I would say that it's -

That's an area that I think has improved quite a bit.

Now, it raises this digital question

of wait, what is the content?

Is it the course materials?

What about the Q&A?

What about the analytics, looking at the engagement

in that material, whose is that?

So, it's opened up some fuzzy areas

but overall I think that's improved quite a bit.

But it's not fully resolved.

- Okay, well that just has me thinking about students,

and data, and ownership, and all sorts of other fun things.

- Well, yeah, that question is not just

applicable to the OPM world, right?

- Right. And another question from Josh.

And I'm just going in terms of up votes so,

it's not that I'm playing any preference here.

But Phil, what ideas might you have to bring OPM

providers and schools to the table to build

the infrastructure for independent,

data driven research on outcomes related to

nonprofit/for profit partnerships in online ed?

- That's a great question.

My gut feel is that you're gonna have to have

an ecumenical organization, hey, maybe a dummy CET.

You're gonna have to have an ecumenical

organization that can strongly facilitate

that work to make that happen.

It's not just gonna happen by a consortium of schools

or a couple of vendors finally get together

and you know, kumbaya and start working together.

I think for that to happen,

because I think where Josh is going,

and I've read your articles,

is you wanna get to not just how do you use a vendor

but how does the whole feel

and improve their knowledge base?

I think there's gonna have to be some

independent ecumenical organization

that gets the buy in

and will strongly facilitate those meetings

and discussions.

I'm not sure who that's gonna be

but I will add one other point,

when you mention data, let's remember

the data is really poor across educational technology.

We have lots of data

and lots of click streams but very few cases

where it's meaningful, usable data

to improve education.

So, part of what it'll take

to get to what Josh is asking about is

time.

So that we can figure out how to actually have usable

data to feed into this process in the first place.

Cause we're not there yet.

- Wow, well, I think we have time for

one maybe two questions.

Another question from -

Actually, I'm gonna skip down to Paul here.

Are there examples of in house provisions

that have fallen short of initial expectations?

Have you looked at Calbright Initiative

and expectations compared to other state driven

online initiatives?

That might be a little too early in its infancy

but if you could speak to the examples

of in house provisions.

- I will wisely choose not to talk about Calbright

right now.

Partially based on some consulting work that we're doing.

There are lots of examples

and maybe we'll pull this out in the blog post

afterwards but absolutely there's a lot of cases

where schools try to do in house provisions

and it just doesn't work.

It cannot meet expectations.

And quite often the current -

The reason I separated creating an online program

and delivering for what the market is about,

is we're seeing more often the case now

where a school might say, "hey, we've been running

"this internally but we recognize

"we're not doing a good job.

"Even though we've already started it,

"can we get somebody to come in

"and help and run it better?"

So, there are lots of cases

but what I'd like to do is be able to

address that in a blog post.

Also, so I can get permission if I give specific examples.

So, let me try to defer that question to the -

We'll come up with a blog post that'll

address additional questions

and I'll try to address that there

with more specificity.

- Perfect and there was a question about if,

and feel free to follow up in the blog,

but if there are examples of two years using OPM providers.

So, quickly I just wanted to -

- There are examples on that

but it's certainly not as common.

That's something we will address so good question.

- Great, thank you.

So, Phil has a great blog, I'll send the link out

in addition to the recording.

Hopefully Dick can get that back to you all today

and Phil will be at our annual meeting

and we're gonna have an open discussion

very much on the same topics

we'll be able to get to some of your questions.

And I really do wanna pursue developing

some model agreements for our community

so stay tuned for work on that.

But if you haven't registered yet,

be sure to register and join us in Denver.

And all of our webcasts are recorded

and posted on our webcast page

as well as our YouTube channels

so you can always go back

and look through previous recordings.

And I just wanna make a shout out to

first of all, Phil

and all of the wonderful participants

that were so engaged today

and asked wonderful questions.

And our work here at WCET happens because

of our members and our sponsors.

So, our supporting members there Colorado State University,

Michigan state, and Mizzou Online.

And then we have wonderful sponsors here

that help underwrite much of our programs

and things so thank you to everybody

that helped our great work happen.

And stay involved.

We don't have any webcasts published yet

but we do several throughout the full year

so stay tuned.

Any final comments, Phil?

- Oh, no, other than I mean, I'm looking forward

to being able to capture -

Look at some of the chat and the Q&A,

and our follow up web post.

And for those of you who are in Denver,

definitely would like to talk more in person

about this question during the WCET conference

but thank you for great questions.

I wish more sessions had this type of interactivity

and great questions coming in.

So, thank you.

- Great, thank you. You all enjoy your day.

Bye Phil, thanks, good luck.

- Bye.

The Description of WCET Webcast: Navigating the OPM Marketplace: Picking the Right Partners While Avoiding Market Chaos