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Coursera, the largest provider of massive open online courses (MOOCs), has entered into a contract to license several of the courses it has built with its university partners to Antioch University, which would offer versions of the MOOCs for credit as part of a bachelor’s degree program.

The deal represents one of the first instances of a third-party institution buying permission to incorporate a MOOC into its curriculum -- and awarding credit for the MOOC -- in an effort to lower the full cost of a degree for students. It is also a first step for Coursera and its partners toward developing a revenue stream from licensing its courses.

“It’s a very different kind of arrangement than our university partnerships,” says Daphne Koller, a Coursera co-founder, who along with her co-founder Andrew Ng has signed deals to host MOOCs from 33 universities on Coursera’s platform.

Antioch will pay Coursera an undisclosed amount for permission to use several courses, including ones from Duke University and the University of Pennsylvania. The company will share that revenue with the universities, which own intellectual property rights for their courses as part of their contracts with Coursera.

According to a copy of a contract with one of its university partners, obtained by Inside Higher Ed via an open records request, the company plans to pay its university partners between 6 and 15 percent of gross revenue for courses offered through the platform. (Update, 10/30: Coursera's contract also stipulates that the company will pay its university partners an additional 20 percent of gross profits from "the aggregate set of courses provided by the university or instructors under this agreement.")

If Coursera does manage to make money through content licensing, it could create monetary incentives for professors at the company's partner universities who might be considering whether adapting their courses as MOOCs would be worth their while. “The faculty member would see a portion of the revenue,” says Lynne O'Brien, director of the center for innovative teaching at Duke. “When Coursera makes money, we’ll make money, and when we make money, the faculty member will make money."

Any revenue from the Antioch deal is hypothetical at the moment. Antioch this month began a pilot phase at its Los Angeles campus. There the university is giving students the opportunity to take two Penn MOOCs, "Modern and Contemporary American Poetry" and "Greek and Roman Mythology," for credit.

As part of the arrangement, the students are paired with an Antioch faculty member who will serve as a sort of independent study adviser, discussing the material regularly and assigning some supplemental work.

“The experience they would have together would ensure that the student would have a full learning experience and would not just have prepared for the test,” says Tex Boggs, the president of Antioch University Los Angeles.

The pilot is scheduled to last two quarters. Each student taking the Duke MOOCs as part of their Antioch curriculum will be assigned their own faculty adviser, although the university expects that ratio will eventually expand to roughly the size of a typical class at Antioch, with about 20 or so students per instructor.

The idea is to take advantage of the content and platform while not leaving students to fend entirely for themselves, says Boggs. Whether Antioch chooses to expand the pilot to all five of its campuses will depend on how the students — and the instructors, who for the pilot are taking on advising the MOOC students on top of their normal teaching loads — take to the format, he says.

So far Coursera has seen a relatively small proportion of the students who register for its courses actually complete them — although no one knows how much of that can be attributed to the hands-off role of the instructors and how much to the fact that registrants are not putting any money at risk.

At Antioch, students will be paying for the MOOC-driven courses — although Antioch says it plans to charge them less than the per-credit cost of its traditional courses, and, quite intentionally, less than that of California’s public university systems.

Antioch’s strategy is to make a compelling offer to cost-conscious students who want to finish their bachelor’s degrees after completing two years at a community college. While the university would require one full year of traditional coursework at Antioch (even under an expanded partnership that would open the door to more of Coursera’s course offerings), “what we’re offering is a third year at a cost that is somewhat similar to the cost you can get at a community college,” says Boggs. (Antioch's campuses specialize in serving adult students.)

Felice Nudelman, the chancellor of Antioch, says she hopes the Coursera deal will enable the university to further its mission of offering innovative education while possibly developing a new profit center — although she emphasized that the former was the most important factor. “The hope is that it is profitable, but we’re not doing this to think of it as a silver bullet,” says Nudelman. 

For Coursera, which is still building its MOOC empire with venture capital, the Antioch deal is a first step toward developing a product that it can sell to colleges: “self-contained” online course platforms, complete with built-in content and assessment infrastructure.

“It’s an LMS [learning management system] that’s wrapped around a very high-quality course,” says Koller, the co-founder. “It’s not just the box, it’s a course in a box.”

Such a product could be marketed to colleges that cannot afford to develop traditional versions of certain courses — and who might get some leverage from offering Duke- and Penn-branded versions of those courses, with local faculty members serving as guides.

“This is a way for institutions to provide a very high-quality course experience to their students at a very low cost,” says Koller. “Our hope is that institution will then pass those savings along to students.”

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