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The Economies of Sale 
The Emerging Market for OER 
MACS 2014 Fall Meeting 
Charles Key 
Open Doors Group 
October 13, 2014 
www.opendoorsgroup.org
Except where otherwise noted, this work is licensed under: 
http://creativecommons.org/licenses/by/4.0/ 
http://creativecommons.org/
Charles Key 
Open Doors Group 
Director of Adoptions, College Open Textbooks, and Grants 
charles.key@opendoorsgroup.org 
http://www.opendoorsgroup.org 
http://www.collegeopentextbooks.org
Open Doors Group (ODG) is a not-for-profit organization that seeks to 
Increase access to education by lowering barriers for all learners. We 
are active in a wide range of activities, including our major projects: 
• College Open Textbooks 
• Communities 
• MOOCs 
• ODG Consulting 
College Open Textbooks (COT) 
• Online ‘referatory’ of over 750 open and affordable textbooks, 
primarily for two-year college level courses 
• Active online community of over 1500 members 
• Twenty Communities of Practice organized around specific academic 
disciplines or interests. 
We advocate for the adoption of OER as well as Affordable CARR
The Point Is… 
• Higher ed is in a “cost crisis” 
• Digital technology has changed the equation 
for creating, storing, and communicating 
information 
• OER are an increasingly important part of the 
solution 
• Campus stores can thrive in this environment
The Rising Cost of Everything 
Source: US Bureau of Labor Statistics
OMG! 
Source: US Bureau of Labor Statistics
Student Loan Debt Soaring
Textbook Cost as a % of Tuition 
Average annual cost of books and supplies 
• Public college: ~$1200 
http://money.cnn.com/2011/10/26/pf/college/college_tuition_cost 
• Public two-year college (in state): ~$3000 
• Public four-year college (in state): ~$8500 
http://www.studentpirgs.org/campaigns/sp/make-textbooks-affordable 
Average annual cost of tuition and fees 
https://bigfuture.collegeboard.org/pay-for-college/college-costs/college-costs-faqs 
https://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064
The Cost Disparity at 2-Year Colleges: Take 2 
Community college in-state tuition: $46/unit 
Cost of two 4-unit courses: $368 
Organic Chemistry by Janice Smith: $195 
Study Guide & Solutions Manual: $126 
Students tell College Open Textbooks: 
It’s not uncommon for the cost of 
textbooks to double the cost of tuition 
at the 2-year college level. 
Calsidyrose by Curiosities CC BY 
http://www.flickr.com/photos/calsidyrose/4686098399/in/photostream/
The Effect 
 
 
 
 
 
 
60%+ do not purchase textbooks at some 
point due to cost 
35% take fewer courses due to textbook 
cost 
31% choose not to register for a course 
due to textbook cost 
23% regularly go without textbooks due 
to cost 
14% have dropped a course due to 
textbook cost 
10% have withdrawn from a course due to 
textbook cost Source: 2012 student survey by Florida Virtual 
Campus 
www.projectkaleidoscope.org
There are no winners
The Response 
Entrepreneurs view market inefficiencies as 
opportunities. The convergence of the cost crisis, 
the digital revolution and new technologies is 
causing a fundamental shift in the way we view 
and provide education.
OER 
MOOCs 
Governmental 
Policy 
Ed Space 
Startups 
Open Data 
State-Wide 
Repositories
Entrepreneurship is Exploding
What are Open Educational Resources? 
“OER are teaching, learning, and research resources that 
reside in the public domain or have been released under 
an intellectual property license that permits their free 
use and re-purposing by others. 
Open educational resources include full courses, course 
materials, modules, textbooks, streaming videos, tests, 
software, and any other tools, materials, or techniques 
used to support access to knowledge." 
The William and Flora Hewlett Foundation
The 5-R’s Framework 
David Wiley/Lumen Learning 
Nicole Allen/SPARC 
http://opencontent.org/definition/
There is an inherent cost to produce and maintain content. 
This is independent of whether the producer charges the 
consumer for its use.
5 Reasons Why OER Aren’t Going Away 
1.Savings 
2.Improving Quality 
3.Technology 
4.Governmental Policy 
5.Licensing Infrastructure
How Much Can Be Saved? 
Higher Ed Savings Estimates 
$116.60 (Tacoma Community College 2013) 
$107.34 (Student PIRGs 2010) 
$101.69 (Student PIRGs 2011) 
$95.95 (Student PIRGs 2013) 
$90.61 (Project Kaleidoscope 2013) 
Average Savings: $100/student/class 
https://docs.google.com/document/d/1YikQJFigkv_AMmOw0C_E6i53UQ8UbAuDxnsZrIzfiFU/edit 
http://www.studentpirgs.org/reports/cover-cover-solution 
http://www.studentpirgs.org/resources/cost-analysis-open-course-library 
http://www.studentpirgs.org/resources/updated-cost-analysis-open-course-library to be published
How Much Has Been Saved in Higher Ed? 
Total students served: 771,263 
Total potential savings: $75M+ 
http://www.slideshare.net/txtbks/billion-dollar-keynote 
Students Served
The Quality Issue 
People intuitively feel that the more you pay for something, the 
higher its quality (“You get what you pay for”) 
There’s a growing body of evidence that learning outcomes are 
as good or better when using OER than when using traditional 
commercial materials.
Studies Suggest… 
CMU Open Learning Initiative 
A 2011 independent study of an OLI statistics course showed that OLI students 
performed as well or better than students in traditional instructor-led classes. 
South Florida College 
Students using OpenStax physics textbook saw scores on concept inventory tests rise 
30% over scores from the previous five years. 
Houston Community College 
In 2011, 690 psychology students using a free, online textbook had improved learning 
outcomes in three areas. 
Scottsdale Community College 
A 2012 study found that math students in classes using OER had comparable overall 
grades and completion rates to students from previous, non-OER classes. 
http://oli.cmu.edu/get-to-know-oli/see-our-proven-results/ 
http://chaos.open.ac.uk/evidence/impact-of-openstax-textbook-on-physics-students-south-florida-college/ 
http://www.tandfonline.com/doi/abs/10.1080/02680513.2012.716657#.UxQEqONdVuI 
http://www.irrodl.org/index.php/irrodl/article/view/1523/2652
Curated Repositories 
Washington State Open Course Library 
Florida Orange Grove 
University of Minnesota Open Textbook Library 
BCcampus Collection 
OpenStax College 
California Digital Open Source Library
Technology 
Digital Storage 
Wideband Access and Delivery Channels 
Devices 
• E-readers 
• Tablets 
• Cell Phones 
Authoring Tools 
• OERCommons OpenAuthor 
• Connexions Authoring Platform 
• AcademicPub Textbook Creation Platform
How Technology Influences Cost 
For One 250 Page Book 
Cost to Copy 
• By hand: $1,000 
• By print-on-demand: $4.90 
• By computer: $0.00084 
• 
Cost to Distribute 
• By mail: $5.20 
• By print-on-demand: $0 
• By internet: $0.00072 
CC BY: David Wiley, BYU
Production of Quality Content is Within Anyone’s Reach 
Music 
Video 
Social Media 
Websites 
Magazines 
Books
Governmental Policy 
Summary of Current and Proposed Policy Initiatives 
Related to Open Education and Resources 
Source: Creative Commons OER Policy Registry 
48 Total Initiatives 
http://wiki.creativecommons.org/OER_Policy_Registry
Licensing of Open Content 
GNU General Public License 
A free, copyleft license for software and other 
kinds of works. 
Creative Commons Licenses 
A set of six licenses for creative works. 
Lots of Others 
http://creativecommons.org/licenses/ 
https://www.gnu.org/copyleft/gpl.html
Creative Commons Licenses 
http://www.slideshare.net/cgreen/keynote-ace-upcea-san-diego-sols14
Internationally Recognized 
http://www.slideshare.net/cgreen/keynote-ace-upcea-san-diego-sols14
The Epitome of Open Content 
The English version contains nearly 4.5M articles 
“Wikipedia comes close to Britannica in terms of the 
accuracy of its science entries, a Nature investigation 
finds. ” 
Jimmy Wales, founder of Wikipedia, on Open Content: 
“…we’ve chosen the free licensing model because that 
empowers anybody to take our content and do 
anything they like with it…” 
http://www.nature.com/nature/journal/v438/n7070/full/438900a.html 
http://www.ted.com/talks/jimmy_wales_on_the_birth_of_wikipedia.html 
http://en.wikipedia.org/wiki/File:Size_of_English_Wikipedia_in_August_2010_(L).svg
Business Models for OER 
The early model: No-cost content, pay for services and upgrades 
• Special formats 
• Printed matter 
Sustainability has been hard to come by 
• Flat World Knowledge, an early leader in professional-grade 
open textbooks, has retreated and is now Affordable CARR 
• Boundless offers some no-cost content, but most is low-cost 
The Wikipedia model hasn’t yet worked for OER
Business Models 
Prominent Models 
• Government/System Supported 
• For-Profit Publishers 
• College/Department 
• Individual Authors 
• Student Fees 
New work by new digital-only providers with low 
overhead 
• NACS reports that 77 cents of the textbook 
dollar goes to publisher overhead. 
The software industry has shown that consumers 
are willing to pay for packaging and convenience
There’s Money to be Made Selling Free Content 
The content is free, the packaging and support is not. 
http://files.shareholder.com/downloads/RHAT/2991989334x0x657207/97DF4F83-606D-4AC5-9153-0B7B49C558CC/SEC-RHAT-1193125-13-173724.pdf
Opportunities For Stores 
Expertise 
Partnerships 
Print-On-Demand
So Many Options…
…So Little Information 
Surveys consistently show that educators who want to 
explore OER don’t know where to go 
• Wide range of sources, from individual authors to 
curated repositories 
• No easy way to locate them 
• OER producers lack the marketing budgets to get the 
information to consumers 
Many interested educators don’t understand licensing issues 
No database of adoptions data so that educators can find out 
what peers are using
Partnerships Will Be Key 
Authors/Publishers 
Libraries Faculty 
Information Providers 
Printers 
Students 
Administration 
Stores
Print-On-Demand 
75-80% of students still want a printed copy, even when 
digital media is available 
Offers a tangible way to participate when OER is used 
Solves a persistent problem for retailers: inventory control 
Bonus: Interest in self-publishing is booming
One POD Option 
http://ondemandbooks.com/
Learn More About OER 
• Follow the links in this presentation 
• www.collegeopentextbooks.org 
• Monthly webinars at CCCOER 
http://oerconsortium.org/
College Open Textbooks Can Help 
• COT Referatory 
• Over 750 Open and Affordable CARR titles 
• The COT Community 
• http://collegeopentextbooks.ning.com/ 
• Adoption Resources & Information 
• Consulting 
• Adoption Strategies 
• Business Models
Contact 
Charles Key 
Open Doors Group 
Director of Adoptions, College Open Textbooks, and Grants 
charles.key@opendoorsgroup.org 
http://www.opendoorsgroup.org 
http://www.collegeopentextbooks.org

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OER and The Economies of Sale - MACS 2014

  • 1. The Economies of Sale The Emerging Market for OER MACS 2014 Fall Meeting Charles Key Open Doors Group October 13, 2014 www.opendoorsgroup.org
  • 2. Except where otherwise noted, this work is licensed under: http://creativecommons.org/licenses/by/4.0/ http://creativecommons.org/
  • 3. Charles Key Open Doors Group Director of Adoptions, College Open Textbooks, and Grants [email protected] http://www.opendoorsgroup.org http://www.collegeopentextbooks.org
  • 4. Open Doors Group (ODG) is a not-for-profit organization that seeks to Increase access to education by lowering barriers for all learners. We are active in a wide range of activities, including our major projects: • College Open Textbooks • Communities • MOOCs • ODG Consulting College Open Textbooks (COT) • Online ‘referatory’ of over 750 open and affordable textbooks, primarily for two-year college level courses • Active online community of over 1500 members • Twenty Communities of Practice organized around specific academic disciplines or interests. We advocate for the adoption of OER as well as Affordable CARR
  • 5. The Point Is… • Higher ed is in a “cost crisis” • Digital technology has changed the equation for creating, storing, and communicating information • OER are an increasingly important part of the solution • Campus stores can thrive in this environment
  • 6. The Rising Cost of Everything Source: US Bureau of Labor Statistics
  • 7. OMG! Source: US Bureau of Labor Statistics
  • 9. Textbook Cost as a % of Tuition Average annual cost of books and supplies • Public college: ~$1200 http://money.cnn.com/2011/10/26/pf/college/college_tuition_cost • Public two-year college (in state): ~$3000 • Public four-year college (in state): ~$8500 http://www.studentpirgs.org/campaigns/sp/make-textbooks-affordable Average annual cost of tuition and fees https://bigfuture.collegeboard.org/pay-for-college/college-costs/college-costs-faqs https://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064
  • 10. The Cost Disparity at 2-Year Colleges: Take 2 Community college in-state tuition: $46/unit Cost of two 4-unit courses: $368 Organic Chemistry by Janice Smith: $195 Study Guide & Solutions Manual: $126 Students tell College Open Textbooks: It’s not uncommon for the cost of textbooks to double the cost of tuition at the 2-year college level. Calsidyrose by Curiosities CC BY http://www.flickr.com/photos/calsidyrose/4686098399/in/photostream/
  • 11. The Effect       60%+ do not purchase textbooks at some point due to cost 35% take fewer courses due to textbook cost 31% choose not to register for a course due to textbook cost 23% regularly go without textbooks due to cost 14% have dropped a course due to textbook cost 10% have withdrawn from a course due to textbook cost Source: 2012 student survey by Florida Virtual Campus www.projectkaleidoscope.org
  • 12. There are no winners
  • 13. The Response Entrepreneurs view market inefficiencies as opportunities. The convergence of the cost crisis, the digital revolution and new technologies is causing a fundamental shift in the way we view and provide education.
  • 14. OER MOOCs Governmental Policy Ed Space Startups Open Data State-Wide Repositories
  • 16. What are Open Educational Resources? “OER are teaching, learning, and research resources that reside in the public domain or have been released under an intellectual property license that permits their free use and re-purposing by others. Open educational resources include full courses, course materials, modules, textbooks, streaming videos, tests, software, and any other tools, materials, or techniques used to support access to knowledge." The William and Flora Hewlett Foundation
  • 17. The 5-R’s Framework David Wiley/Lumen Learning Nicole Allen/SPARC http://opencontent.org/definition/
  • 18. There is an inherent cost to produce and maintain content. This is independent of whether the producer charges the consumer for its use.
  • 19. 5 Reasons Why OER Aren’t Going Away 1.Savings 2.Improving Quality 3.Technology 4.Governmental Policy 5.Licensing Infrastructure
  • 20. How Much Can Be Saved? Higher Ed Savings Estimates $116.60 (Tacoma Community College 2013) $107.34 (Student PIRGs 2010) $101.69 (Student PIRGs 2011) $95.95 (Student PIRGs 2013) $90.61 (Project Kaleidoscope 2013) Average Savings: $100/student/class https://docs.google.com/document/d/1YikQJFigkv_AMmOw0C_E6i53UQ8UbAuDxnsZrIzfiFU/edit http://www.studentpirgs.org/reports/cover-cover-solution http://www.studentpirgs.org/resources/cost-analysis-open-course-library http://www.studentpirgs.org/resources/updated-cost-analysis-open-course-library to be published
  • 21. How Much Has Been Saved in Higher Ed? Total students served: 771,263 Total potential savings: $75M+ http://www.slideshare.net/txtbks/billion-dollar-keynote Students Served
  • 22. The Quality Issue People intuitively feel that the more you pay for something, the higher its quality (“You get what you pay for”) There’s a growing body of evidence that learning outcomes are as good or better when using OER than when using traditional commercial materials.
  • 23. Studies Suggest… CMU Open Learning Initiative A 2011 independent study of an OLI statistics course showed that OLI students performed as well or better than students in traditional instructor-led classes. South Florida College Students using OpenStax physics textbook saw scores on concept inventory tests rise 30% over scores from the previous five years. Houston Community College In 2011, 690 psychology students using a free, online textbook had improved learning outcomes in three areas. Scottsdale Community College A 2012 study found that math students in classes using OER had comparable overall grades and completion rates to students from previous, non-OER classes. http://oli.cmu.edu/get-to-know-oli/see-our-proven-results/ http://chaos.open.ac.uk/evidence/impact-of-openstax-textbook-on-physics-students-south-florida-college/ http://www.tandfonline.com/doi/abs/10.1080/02680513.2012.716657#.UxQEqONdVuI http://www.irrodl.org/index.php/irrodl/article/view/1523/2652
  • 24. Curated Repositories Washington State Open Course Library Florida Orange Grove University of Minnesota Open Textbook Library BCcampus Collection OpenStax College California Digital Open Source Library
  • 25. Technology Digital Storage Wideband Access and Delivery Channels Devices • E-readers • Tablets • Cell Phones Authoring Tools • OERCommons OpenAuthor • Connexions Authoring Platform • AcademicPub Textbook Creation Platform
  • 26. How Technology Influences Cost For One 250 Page Book Cost to Copy • By hand: $1,000 • By print-on-demand: $4.90 • By computer: $0.00084 • Cost to Distribute • By mail: $5.20 • By print-on-demand: $0 • By internet: $0.00072 CC BY: David Wiley, BYU
  • 27. Production of Quality Content is Within Anyone’s Reach Music Video Social Media Websites Magazines Books
  • 28. Governmental Policy Summary of Current and Proposed Policy Initiatives Related to Open Education and Resources Source: Creative Commons OER Policy Registry 48 Total Initiatives http://wiki.creativecommons.org/OER_Policy_Registry
  • 29. Licensing of Open Content GNU General Public License A free, copyleft license for software and other kinds of works. Creative Commons Licenses A set of six licenses for creative works. Lots of Others http://creativecommons.org/licenses/ https://www.gnu.org/copyleft/gpl.html
  • 30. Creative Commons Licenses http://www.slideshare.net/cgreen/keynote-ace-upcea-san-diego-sols14
  • 32. The Epitome of Open Content The English version contains nearly 4.5M articles “Wikipedia comes close to Britannica in terms of the accuracy of its science entries, a Nature investigation finds. ” Jimmy Wales, founder of Wikipedia, on Open Content: “…we’ve chosen the free licensing model because that empowers anybody to take our content and do anything they like with it…” http://www.nature.com/nature/journal/v438/n7070/full/438900a.html http://www.ted.com/talks/jimmy_wales_on_the_birth_of_wikipedia.html http://en.wikipedia.org/wiki/File:Size_of_English_Wikipedia_in_August_2010_(L).svg
  • 33. Business Models for OER The early model: No-cost content, pay for services and upgrades • Special formats • Printed matter Sustainability has been hard to come by • Flat World Knowledge, an early leader in professional-grade open textbooks, has retreated and is now Affordable CARR • Boundless offers some no-cost content, but most is low-cost The Wikipedia model hasn’t yet worked for OER
  • 34. Business Models Prominent Models • Government/System Supported • For-Profit Publishers • College/Department • Individual Authors • Student Fees New work by new digital-only providers with low overhead • NACS reports that 77 cents of the textbook dollar goes to publisher overhead. The software industry has shown that consumers are willing to pay for packaging and convenience
  • 35. There’s Money to be Made Selling Free Content The content is free, the packaging and support is not. http://files.shareholder.com/downloads/RHAT/2991989334x0x657207/97DF4F83-606D-4AC5-9153-0B7B49C558CC/SEC-RHAT-1193125-13-173724.pdf
  • 36. Opportunities For Stores Expertise Partnerships Print-On-Demand
  • 38. …So Little Information Surveys consistently show that educators who want to explore OER don’t know where to go • Wide range of sources, from individual authors to curated repositories • No easy way to locate them • OER producers lack the marketing budgets to get the information to consumers Many interested educators don’t understand licensing issues No database of adoptions data so that educators can find out what peers are using
  • 39. Partnerships Will Be Key Authors/Publishers Libraries Faculty Information Providers Printers Students Administration Stores
  • 40. Print-On-Demand 75-80% of students still want a printed copy, even when digital media is available Offers a tangible way to participate when OER is used Solves a persistent problem for retailers: inventory control Bonus: Interest in self-publishing is booming
  • 41. One POD Option http://ondemandbooks.com/
  • 42. Learn More About OER • Follow the links in this presentation • www.collegeopentextbooks.org • Monthly webinars at CCCOER http://oerconsortium.org/
  • 43. College Open Textbooks Can Help • COT Referatory • Over 750 Open and Affordable CARR titles • The COT Community • http://collegeopentextbooks.ning.com/ • Adoption Resources & Information • Consulting • Adoption Strategies • Business Models
  • 44. Contact Charles Key Open Doors Group Director of Adoptions, College Open Textbooks, and Grants [email protected] http://www.opendoorsgroup.org http://www.collegeopentextbooks.org