When the massive shift to remote learning came about in spring 2020, the evidence for higher education to offer quality online programs became undeniable even to those remaining outliers who had shied away from it in the past. However, there was a time in higher education’s history when many institutions were skeptics of online education; an idea largely stigmatized among students, faculty and administrations alike. As schools started to dip their toes into the proverbial waters of online education, they needed someone to help with the risk and investment of programs.
Enter the Online Program Managers, known as OPMs, and the revenue-share model.
The Birth of the OPM
The OPM’s revenue-share model made a lot of sense initially. This attractive model for schools that needed a partner to front the investment cost also provided expertise and resources where institutions were lacking.
To stand up an online program meant creating content, marketing and media while also managing enrollment, student support, technology and more. Given the OPMs’ growing experience in the space, they could provide the manpower to devote to this effort without a school needing to make big up-front investments or adding additional burdens to their teams.
But supplying the resources for online programs wasn’t the only challenge. Given the stigma of online education back then, the entire concept needed a refreshed brand, which would require significant marketing and enrollment efforts to change the market’s perception.
Seeing the increased demand for online programs, you had institutions that wanted to explore the online education space. And you had OPMs who had the expertise and resources to manage the programs so institutions didn’t need to hire additional staff, build teams or allocate budget. This proposition seemed like a straightforward and easy sell, especially for those institutions fighting difficult internal and political battles over whether they should be investing in online at all. Taking the cost component off the table simplified the process for institutions.
But that was then.
The Shift in Online Learning
The revenue-share model came before more than 16% of all postsecondary students were enrolled exclusively in online programs. It came before 85% of students were considered non-traditional. In the last five years alone, an additional 1.5 million students have chosen to study exclusively online, and that is all before the pandemic upended all that we considered normal around working and learning.
Today’s learner is not only the 18-22-year-old living on campus. She’s the working mom, the 30-something pursuing leadership in her career, the 50-something shifting careers entirely or reentering the workforce after an extended hiatus. They are first-generation college students, full-time employees, low-income students, or otherwise diverse learners who don’t fit into the typical mold of 20th century higher education.
Now, we live in a world where online education is seen as a sound investment for both institutions and students. In a time when overall enrollment in higher education is dropping, institutions see the opportunity to expand their reach to new audiences with online programs.
It’s no longer an internal debate about if they should invest in online programs but how.
With a proof of concept, institutions now see online programs as an opportunity—not a risk. So why are schools still allowing significant portions of their tuition revenue to go to third-party vendors?
The Death of the OPM?
Not only is the rev-share model solving for an outdated problem, but its ethics are also being called into question. We’ve seen the headlines range from calling OPMs “sketchy” to “wolves in sheep’s clothing” while others investigate the “creeping capitalist takeover of higher education.”
“The most problematic aspects of public university–private OPM contracts are tuition-sharing schemes; the lack of transparency afforded students and the public; and the exchange of student and prospective student information and data,” said a report from the Century Foundation on the dark side of partnerships between public universities and private OPMs.
The benefits the OPM once boasted no longer match the challenges a school is trying to solve. As the idea of taking huge hits to revenue without ownership of programs becomes less and less palpable to institutions, they’re rethinking their approach to developing and delivering online programs.
Now that new and alternative models are emerging, perhaps the OPM rev-share model is dead. We’ve entered the age of the Online Program Experience, or OPX, where the learners and educators lie at the center, and institutions keep 100% tuition revenue. Instead of operating on a revenue-share model, OPX employs a fee-for-service model that allows for more transparency and flexibility so institutions can leverage their own expertise where they choose and outsource the services they need. Unlike traditional OPM revenue-share models, OPX lets you build—and own—customized online programs that optimize the student experience and increase your revenue and long-term profitability. While it requires more up-front investment, the fee-for-service approach ultimately provides the foundation for greater long-term growth and ROI.
For institutions ready to think strategically about the long term and see real return on investment for their online programs, a fee-for-service model makes sense. Many institutions are now on-board with building in-house services to support online learning—whether it’s additional support, an internal marketing team, or instructional designers. And even if institutions still want to outsource most or all services, the flexible, short-term, fee-for-service contract where they get to keep tuition revenue and program ownership is more desirable than the alternative.
Own Your Online Story With OPX
In today’s world, the OPM revenue-share model seems outdated and inferior to more flexible and customizable alternatives where students and educators are the primary focus. With OPX, the flexible and transparent fee-for-service approach shifts the central focus from the success of the OPM’s bottom line to the success of institutions and their learners.
Blackboard OPX solutions are fully tech agnostic and offer support in various areas to enable institutions to make ongoing strategic decisions—all with flexible financing options and short contract terms. From course development to performance marketing to retention services and everything in between, our OPX solutions can help institutions optimize their online efforts and achieve maximum ROI.