Coursera’s new monthly subscriptions could monetize procrastination

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Edtech giant Coursera has launched a monthly subscription payment option in the hope that learners on its platform can be enticed into ongoing educational activity, rather than a more piecemeal pay-per-course-bundle option.

The new payment model applies to users enrolling in any of the platform’s so-called Specializations: aka a bundle of six to eight courses that cover a particular topic. It has “hundreds” of such course bundles at this point. Examples include programming languages, data science and a finance-related course package covering investment and valuation.

It’s phasing in the launch, with subscriptions available worldwide in “select Specializations” beginning this week — with a focus on its more popular course bundles. Monthly and annual subscription options will be offered.

“We’ll be gradually increasing the number of subscription-based Specializations throughout the remainder of 2016,” said chief product officer Tom Willerer, writing about the launch on the Coursera blog.

Willerer, who was hired from Netflix, points to the appeal of his prior employer’s on-demand monthly subscription payment model as part of the inspiration for Coursera.

“I think because when you’re watching Netflix, you start watching a show and love it and watch the whole thing right away,” he told the FT. “We’re not introducing a new payment model so much as a new psychological model. The power is in their hands and they see the benefit of moving fast because it saves them money.”

Although it’s worth emphasizing that Coursera’s subscriptions do not give users unlimited access to all its Specializations for a single monthly fee. Instead, the pricing will vary, depending on the course bundle in question. Willerer says subscriptions will be “typically priced from $39 to $89 per month” per Specialization.

It’s also, arguably, pretty erroneous to compare the addictive quality of passive consumption of visual entertainment with the active effort required to learn a new discipline. But if the idea is for Coursera to make users feel like they can learn more then that may not matter — given they’ll already have signed up to the sticky psychology of the subscription.

Willerer claims the payment option has the potential to reduce costs for “many learners” — basing that reasoning on completion times the company “typically” sees for its most popular Specializations. It also offers users an alternative to paying up front for an entire course, he adds.

However where subscriptions are applied to Specializations they could replace a cheaper prior pay-as-you go option for a single course — so there’s likely to be some price inflation on some courses (given a user will be paying at least one month’s subscription vs previously being able to pay for just a single course).

On the flip side, ‘binge learners’ might be able to power through an entire Specialization in less time than they otherwise might and pay a reduced fee for the entire course bundle.

Although, in practice, a single Coursera course can have a syllabus that covers more than six weeks so how accelerated learning could realistically be for the vast majority of users is questionable — and paying for multiple months to complete a full Specialization seems inevitable. (Coursera has not released actual figures for the ‘typical’ completion times Willerer mentions.)

Accessing course materials for free is still an option on the platform (labelled with the rather cryptic name of an ‘audit’; and available for “most”, though not all, courses). Although it’s an increasingly well concealed one, as learners were already being pushed towards paid enrollment paths that include not just access to course materials but graded assignments and a final grade when/if they complete.

Now they are also being pushed towards recurring monthly subscriptions, as Coursera looks to keep its revenue engines firing. Willerer told the FT it has doubled revenue over the past two years, and is on pace to double revenue this year.

In tests of the subscription model he says the company found that learners who paid for a monthly subscription were about 2.5x more likely to complete a Specialization vs learners who paid the full price of each course or the entire Specialization up front.

“We believe that, by rewarding faster completion, the subscription model will give you a powerful incentive to achieve your goals,” he adds.

There does also look to be a bit of a risk for Coursera users who want to pay for just one course ending up getting stung for a recurring monthly subscription as its FAQ notes it is automatically enrolling people who subscribe to one course into the entire Specialization — meaning it will be up to the user to remember to cancel their subscription after they have finished whatever single course they were interested in (or else they’ll be billed a recurring monthly charge).

“If you are just interested in a single course, you should cancel your subscription after completing this course in order to stop the recurring monthly charge,” it notes.

But pushing students to expand their learning activity from a single course to a whole bundle is a clear thrust of the new payment model. As is, perhaps, monetizing procrastination — as those who do not complete a Specialization will keep on being billed until they remember to cancel or else pull their finger out and finish the entire program. And who wants to admit such self failure? Letting a subscription keep rolling as you tell yourself you’ll get round to finishing the course this month may, perhaps, end up being the more powerful psychological lever.

Once a subscription has ended users will also lose access to all the Specialization materials — potentially another incentive to let a subscription keep rolling. Although it’s possible to regain access to course materials gratis via Coursera’s audit enrollment option (where available).

While those students who subscribe to a Specialization and earn a certificate at the end of completing all the courses will (finally) have their subscription automatically discontinued at the end of that month’s billing period. Except for people who subscribe via the Apple App Store; they will need to manually cancel any subscriptions.

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