EdX may be a nonprofit organization, but it still has to pay its bills. It’s too early to tell exactly how the massive open online course (MOOC) provider which started with a $30 million investment from Harvard and MIT, will actually make money, but The Chronicle of Higher Education reported on the platform's plans to create revenue moving forward.
The first approach, called the university self-service model, will allow schools to use the edX platform for free as long as edX is paid a portion of the revenue any course generates for the institution. EdX would collect an upfront fee and then would receive a 50% cut of any revenue above the threshold.
In the second plan, called the edX-supported model, the company serves as a consultant and design partner for any course developed. EdX gets more upfront cash in this model, but allows the university to earn 70% of revenue the course generates after that. Schools can also choose a payment method on a course-by-course basis, according to the agreement.
The edX agreement also provides the company with all net profits from any third-party contract, such as book sales and proctoring services. EdX already has a deal with Pearson Vue to proctor MOOC examinations. It is also considering charging students for certification from those proctored exams, charging publishers for referring students to related textbooks, and for referring students to employment services.