Online Learning Industry Poised for $107 Billion In 2015
Online education is a huge cash crop for colleges and universities.
University of Massachusetts online program generates $78 million
in revenue alone. And still, thats just one small piece of the
entire online education industry, which is predicted to top out at $107
billion this year.
Online learning, also known as e-learning, is booming. Market research
firm Global Industry Analysts projects it will reach $107 Billion in
2015. More traditional methods of training or education are not going
away, not yet, but organizations of all types, from public schools to
corporations, are opting to train and inform via the web. Pluralsight,
an online training service for technology professionals, announced today
it has closed $135 million in Series B funding.
In 2013, Lynda.com, the online learning giant and arguably the 800-pound
gorilla in the e-learning space, took in $103 million in growth equity
from Accel Partners and Spectrum Equity. Subscription Content reported
that the site already had $100 million in revenues with two million
subscribers. The Lynda service has amassed more than 83,000 instructional
videos, mainly on software and web development, but a quick look now
shows a wider range of design to photography to 3D animation. Content
is still the winning card for this market and Lynda just announced the
acquisition of Phoenix-based Interface TILE -4.35% Technical Training;
adding more than 2,500 videos teaching business, technology and creative
skills to its own collection. They have an annual fee with unlimited
access to all its videos.
Disclosure: Last year, I paid for a one-month access at Lynda.com and
they later provided me with a short term media access account, which
due to work obligations I was not able to use except to scan the libraries
of available content.
Forbes staffer Alex Konrad cited some venture capitalists on the state
of e-learning (as well as other hot tech trends), in his post: Top VCs
Predict Where Theyll Invest Their Money In 2014. Heres a
quick look from two of his VC experts:
Scott Sandell, NEA: Educational technology will reach the mainstream
in 2014. Its a sector thats had a lot of lingering attention
but theres been question whether these are businesses. We see
12 startups in one way or another helping to reshape education. I think
they will be sizable businesses. It will take a couple of years before
the real winners are determined.
Mike Maples, Floodgate: I think e-learning is still very compelling
but very, very crowded. Companies involved with e-learning will struggle
unless they have a truly disruptive idea and a structural advantage.
As someone who is living and working in and from the cloud, and as a
father who has one child in an online homeschool environment, I am a
true believer in the power of online learning. One of the exciting things
about this market is how it allows individuals to create a business
out of their expertise. If you look at how Lynda operates Instructors
are paid for their courses on an ongoing basis. I met an individual
last week who is earning a healthy living from his Lynda.com earnings.
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In the early days of Skype, and even today, many tutors or coaches perform
their services almost entirely via web video calls. Just yesterday,
Business Insider profiled an expert SAT tutor who makes $1,000 an hour
prepping the children of the wealthy. The online learning space is crowded
in many ways, but for the entrepreneurial mind there is still plenty
of opportunity to build an education business with a niche focus.
Pluralsight is impressive in that it offers a free trial; Im signing
up for to give it a test drive. General Assembly is a hybrid of online
and traditional learning (as in in real life) that offers
local workshops (in select cities) and online courses. Ive seen
them most frequently with their programming courses, but they have a
whole range of business and technical topics. You sign up for free and
pay on a per-course basis.
HP announced this week their collaboration with the National Association
for Community College Entrepreneurship (NAACE) where they help instructors
from both rural and urban schools integrate HP LIFE e-Learning courses
into their classes. It is a free, online program for high-school and
community-college students to learn essential business and IT skills
by putting them into the shoes of an entrepreneur and giving them real-life
business issues to tackle.
Online learning is a growing way to keep your skills up to date or learn
entirely new skills. Sure, you can hunt around on YouTube for free tutorials
and there are some good ones, but I think the niche sites and well-organized,
curated platforms are going to change how we learn. Author Kio Stark
conducted over 100 interviews with independent learners for her book:
Dont Go Back To School and it chronicles how people are using
online methods to increase their knowledge base. It hints at why the
online learning industry is going to grow beyond $100 Billion. Well
continue to see investment in this space as startups target new niches
or build out deep content wells that bigger players will want to acquire.
Industry Poised for $107 Billion In 2015
TJ McCue ,
Passionate about tech: 3D to Cloud to Gadgets
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Opinions expressed by Forbes Contributors are their own.