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edX Raises Their Paywall

By Henry Kronk
December 27, 2018

On December 17, edX CEO Anant Agarwal announced that the non-profit MOOC provider—the second largest behind Coursera—would be further monetizing its online courses. According to Agarwal’s blog post, the changes were made in the name of sustainability.

“In order to continue to drive forward our mission of providing affordable access to high-quality education for everyone, everywhere, we need to have a business model that supports our platform, partners, and content,” he wrote.

Learners will still be able to audit courses for free, but they will need to pay to participate in graded assignments, access the course after its duration has ended, and receive a verified certificate upon completion.

edX’s Paywall Will Be Higher than Coursera’s

The cost of these courses vary, but Class-Central founder Dhawal Shah reports that “It may come as a surprise to some that edX’s paywall will now be higher than Coursera’s, especially since Coursera has borne the brunt of criticism about restricting access to MOOCs, which many attributed to pressure from Coursera’s venture capital (VC) investors.”

While the organization remains committed to providing courses at a low cost to learners around the world, the change left a bad taste in at least a few learners’ mouths.

It’s no secret that offering MOOCs and MOOC-based degree packages for a very low cost isn’t the most economically sound business model. 

Co-founder of Mindwires Consulting and writer for the e-Literate blog Phil Hill told Inside Higher Ed outright that edX “need[s] to acknowledge that MOOCs by themselves are not sustainable as a business model.”

edX can certainly back this point up. Since provider launched in 2012, it has consistently spent more than it has taken it. Net losses have typically come in around $3 million. But then again, edX does not operate like many businesses. 

edX Has Nearly Doubled Upper Management Since 2015

A quick scan of edX’s 990 tax return forms leaves one wondering how necessary these measures may be. Between 2016 and 2017, when the organization reported a net loss of $2,980,000 (in 2016), many officers and directors took on significantly more work and, in return, went from a volunteer position to making six figures. 

Co-Chair and Director Alan Garber worked an average of 1 hour per week in 2016 and received zero compensation. In 2017, he averaged 60 hours per week and received just under $670,000 for his troubles along with additional benefits. A similar story is true for five other edX directors who are named as individual trustees. Martin Schmidt, Katherine Lapp, Israel Ruiz, Sanjay Sarma, and Michael Smith went from 0 to 60 in terms of average hours worked and received salaries ranging from $500,000 to $700,000 after making nothing the previous year.

Compensation of current officers, directors, trustees, and key employees jumped from $3,954,147 in 2016 to $4,412,222 in 2017. That’s less significant than the jump from $3,093,784 in 2015 to the nearly $4 million in 2016. During these years, the ranks of upper management at edX swelled from 13 members earning 6 figures in 2015 to 24 in 2017. 

edX has also been spending more and more on their less-essential employees as well. Salaries and wages at edX grew from $13,816,051 in 2015 to $18,401,345. 

This likely attests to edX’s recent growth. Along with learners taking courses via the Open edX architecture, the organization counted 35 million total learners during the Open edX 2018 Conference this summer. At the same event, Agarwal put forward the goal of increasing that to 100 million in five years’ time. 

It appears the company has been building capacity. In all, total functional expenses stood at $36,382,888 in 2015. In 2017, it was $57,073,054. That marks an increase of over 63%. edX did not respond to requests for comment.

Featured Image: edX, Flickr.