Can a For-Profit, Venture-Backed Company Keep OER Free—and Be...

Digital Learning

Can a For-Profit, Venture-Backed Company Keep OER Free—and Be Financially Sustainable?

By Sydney Johnson     Apr 12, 2018

Can a For-Profit, Venture-Backed Company Keep OER Free—and Be Financially Sustainable?

From 2006 to 2016, the cost of textbooks increased by 88 percent, more than than nearly any other college student expense—including tuition and fees (63 percent) or on-campus housing (51 percent)—according to the Bureau of Labor Statistics.

New and traditional publishers are trying to offer alternatives such as open educational resources (OER), or freely downloadable and adaptable learning materials. But some providers of OER still ask for fees in return, and that has advocates concerned.

One company, Top Hat, is trying to shift away from that by opening up its marketplace of mostly OER materials to users for free.

“Many textbook publishers are guilty of ‘openwashing’—pretending to take on the positive community aspects of open educational resources while profiting from access to their platforms,” CEO Mike Silagadze wrote in a blog post today. By removing some existing fees, the company hopes to thread a tricky needle of making OER actually free—while still running a for-profit company.

Based in Toronto, Canada, Top Hat’s new freemium business plan—referred to as its Open Content Initiative—will replace the company’s former paid options. Previously, low-cost and even free materials on the Top Hat Marketplace were only available to students who purchased a subscription for the platform, which cost $26 for one term, $38 annually or $75 for lifetime access.

Now anyone who makes a free account can access to Top Hat Marketplace, a repository of more than 20,000 course materials—nearly 90 percent of which are free and openly licensed. In addition, Top Hat has also made its assessment and homework tools free, allowing instructors to create homework assignments based upon the resources they adopt in the marketplace

Letting go of a paid subscription plan also means potentially letting go of revenue. But company executives are confident enough that the new strategy will entice users to purchase some of Top Hat’s other features.

“We think this will drive a lot of users coming to our platform,” says Nina Angelo, VP of product at Top Hat. That, she thinks, will then drive “the opportunity for us to be able to allow them to supplement the OER with premium content and help them improve their in-class experience.”

Students will still be charged for the company’s premium products, which includes Test, which costs $10 per four-month term to build tests and quizzes, and Classroom, a platform where teachers can check attendance and engage with students in various lessons, assignments and activities. (Pricing for Classroom varies, with students paying either $26, $38 or $75 depending on the duration.)

In addition, commercial textbooks and other paid content—representing about 10 percent of course materials offered through the Top Hat Marketplace—will only be available for purchase.

The majority of content in the Top Hat Marketplace is sourced from third-party OER sources such as OpenStax, an open-source publishing nonprofit out of Rice University. And many others are created by faculty themselves, who can upload and sell materials on the platform. Textbook authors and Top Hat split the earnings approximately 45-45 percent, with the remaining 10 percent of proceeds going towards a student scholarship fund.

According to Angelo, Top Hat has a small team that vets material uploaded by instructors for plagiarism and appropriateness. The company is also banking on authors and adopters to check for quality themselves. “Ultimately we want users to be able to say what is good quality,” says Angelo. “We want a platform where the community does the work and thumbs up or down on certain content. That’s the vision for our platform.”

When creators make changes to their original texts, those updates get sent to users who adopted the text and they can then decide to accept the changes or leave as-is. Adopters can also provide feedback to the authoring team and share their own adaptations of the openly-licensed materials.

In its attempt to avoid some of the “openwashing” in the market today, Top Hat is turning to a set of recommendations called the CARE framework, released in March by a trio of education and edtech: Lisa Petrides, Douglas Levin and C. Edward Watson.

The framework calls on OER stewards to “address how we might sustainably scale the movement over time and across diverse contexts, while still staying true to the values of openness that attracted so many to OER in the first place.” And it draws on concerns around how commercial publishers are hopping on the popularity of OER—but still charging for some proprietary material.

In 2017, Top Hat nabbed $7.5 million to create its marketplace, and has raised a total of nearly $50 million overall. A spokesperson for the company claims Top Hat is profitable and that more than 2.8 million students at colleges and universities in North America have used the platform.

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