Update 1/20/2019: Updated with latest figures
Update 12/18/2018: Not long after we published this post, edX announced that it would make all previously free courses freemium. We’ve updated parts of this post to reflect this change.
As of late 2018, the vast majority of MOOCs and online courses fall under three payment models: freemium, paid, and subscription. We’ll take a look at each, discuss when you might prefer one over the others, and break down their costs.
Table of Contents
- Freemium balances MOOC viability and access
- Paid courses require payment upfront
- Subscriptions, the all you can eat buffet of online courses
- Freemium vs. Paid vs. Subscription: Key differences
- Why subscription courses rock
- Why freemium courses rock
- Collections take a long time to complete, but offer discounts
- The costs: buying individual courses vs. paying for a subscription
- The takeaway: which is better for your wallet?
Freemium balances MOOC viability and access
Freemium mashes up “free” with “premium.” In context of online courses, freemium courses make some of their content available for free while locking up others behind a paywall. How much of a course’s contents are freely available and restricted varies.
Most freemium courses place graded tasks like homework assignments, projects, and exams behind a paywall. Others are more restrictive, locking away segments and even entire lectures, accessible only to those who pay.
The main reason you would want to pay for a course is to earn a certificate. By limiting access to graded assignments and lecture segments, course providers encourage serious learners to pay a fee to learn. This fee helps fund the course. In exchange, you receive a certificate that recognizes your learning.
Read our article about certificates to see why they’re useful and how you can use them.
Paid courses require payment upfront
The paid model is simplest to explain. You can think of them as shrink-wrapped books off a shelf of a bookstore. Before you can rip off the packaging to reach its contents, you’ll need to walk it through checkout first.
Of the course platforms we index, Udemy is the most popular for paid courses. They offer tens of thousands of courses running a gamut of courses that cost between $10 and $50. (Because there are so many, we at OpenCourser manually select just a few hundred to index so as not to overwhelm our catalog).
Traditional MOOC platforms like Coursera and edX also offer some paid courses. These are less common in part because many previously free courses tend to convert to freemium courses and not to paid ones. The few that are paid are usually adaptations of existing in-person professional training courses. Because these courses lead to professional certifications, they’re often more costly, sometimes running as high as $500 or more.
Subscriptions, the all you can eat buffet of online courses
Subscriptions differ from freemium or paid courses in that they grant you access to an entire library of courses. By paying a monthly recurring fee, you gain access to thousands of courses that you can access on demand.
Unlike with freemium courses, once you pay for a subscription, you have unlimited access to all courses available from the library. Many courses will also issue certificates indicating that you’ve completed a course.
Platforms that offer these kinds of subscriptions include LinkedIn Learning (formerly Lynda), Pluralsight, and Treehouse. Monthly costs start between $25 and $35 and you can sign up for a free trial to preview these services through OpenCourser.
Freemium vs. Paid vs. Subscription: Key differences
Aside from payment, the three kinds of courses we covered differ in 3 ways:
- The amount of flexibility they offer
- Their backers and instructors that produce them
- Their target audience
Most freemium courses have their roots in the rise of MOOCs, many of which themselves were started by universities and schools. As a result, freemium courses share many attributes with traditional classroom courses. For example, many have set start dates, weekly schedules, and deadlines that keep students on pace but don’t allow much flexibility.
Because of their academic origins, most freemium courses tend to appeal to learners seeking a mix of theoretical and practical knowledge.
Contrast this to the paid or subscription model where many courses abridge theory in favor of sharing practical knowledge. The goal of these courses is to help get learners started doing what they need to do in as short a time as possible. If courses were books, paid and subscription courses would resemble how-to and DIY guide books and university-funded courses, textbooks.
And unlike freemium courses, paid and subscription courses tend to dispense with fixed schedules. That, coupled with their easy-to-digest content, makes them especially appealing to busy working professionals and those who want to pick up new skills.
Why subscription courses rock
Subscription platforms stand out because they offer learners near unlimited latitude to explore. You’re free to jump around between courses, topics, and subjects. It’s a wonderful feature, especially if you’re uncertain yet of what to learn next.
The ability to jump around and move through courses at your own pace also means you have more control over how you supplement and enrich your existing courses.
To give an example, let’s say you’re taking a course on how best to give presentations. Halfway through, you realize your PowerPoint skills could use some work. No problem. You can just pause your existing course, find a few modules on PowerPoint to take, and resume your original course when you’re ready.
That same set of moves is harder to pull off with freemium courses. Because these are bound by start dates, deadlines, and set schedules, you can’t just put your original course on hold to start another one. And if you do find a suitable course, you’ll have to make sure you have enough time to take both concurrently.
Why freemium courses rock
If you’re looking to learn from the best instructors using online courses offered by the very best universities, freemium courses are the way to go. Many of the best academic institutions have embraced the freemium model as a natural progression from the free MOOCs that first sprung up earlier in the decade.
Aside from the quality of instruction they provide, there’s another reason why freemium courses are so popular: they’re (partly) free. You can often learn a lot from one without paying a single dime.
Even if you do decide to pay for one, the costs associated with buying a freemium course is relatively tiny. It’s tiny in comparison to what you would normally pay to attend an in-classroom equivalent of it. It’s tiny in comparison to the benefits you would yield from the knowledge you gain.
Another benefit of freemium courses is that once you pay for one, it’s yours to keep. You’ll have access to it indefinitely. Compare that to subscriptions, where access to most courses, even ones that you’ve completed, ends when your subscription ends.
Finally, in some instances, buying a freemium course is clearly less expensive than paying for a subscription. For example, if you’re looking to take a 12-week (3-month) course, you’ll probably pay less going with a standalone course than a subscription one. A subscription here would run you $75 and up whereas standalone courses average below $60.
Collections take a long time to complete, but offer discounts
More often now, course providers will release or curate individual courses as parts of series. Taken as a whole, these promise to give learners a more comprehensive understanding of a topic. These series are also marketed as more complete programs that can give learners the knowledge they need for a career pivot or transition.
Specializations, Learning Paths, Tracks, and Micromasters—each of these are “brands” referring to collections offered by Coursera, LinkedIn Learning, Treehouse, and edX, respectively.
We mention collections here because they can take a lot of time to complete. More extensive collections can take upwards of a year to finish. If you set out to complete one, be sure to consider how much time you’ll need, especially if you’re going with a subscription service.
Some subscription platforms offer discounts when you pay upfront for an annual subscription. If you’re considering finishing a series on a subscription platform, it’s worth it to consider this option. Freemium-based platforms like Coursera and edX also offer discounts via OpenCourser for series. When you purchase an entire series upfront, you may enjoy discounts between 10% and 25%.
The costs: buying individual courses vs. paying for a subscription
For this segment, we analyze nearly 16,000 courses that fall under freemium, paid, and subscription models on OpenCourser. Of these, over 5,500 belonged fell under freemium or paid models, which we’ll group together as “individual courses” for this analysis.
In looking into costs, we ended up slicing costs in two different ways:
- Average cost based on sticker prices
- Average cost per hour of coursework
We also made a few adjustments to help make sense of the figures. Here’s what we found.
On average, it costs about $67.46 to buy an individual course. This figure falls to $56.35 when you exclude 340 courses that are priced above $100.
Because subscription courses don’t have individual prices, we have to make some assumptions.
First, we assume that the average learner spends 8 hours each week on courses. This lets us assign a pro-rata cost based on the monthly subscription fee. For example, on a platform that charges $30 per month, a 16-hour course would have a cost of $15.
Based on this methodology, we came up with an average cost for a subscription course of just $1.88 per course.
That’s a near 30x differential. What gives?
If you look closely at subscription courses, you’ll find that many are actually quite short. Some of these courses more closely resemble an individual module or a single lecture within a course.
To adjust for this, we came up with another metric: average cost per hour of coursework. When we hold time constant, subscription courses end up costing less—a nice even $1.00 per course hour, to be exact. Individual courses, on the other hand, cost $2.60 per course hour.
The takeaway: which is better for your wallet?
On the surface, paying for a subscription seems more economical than buying a freemium or paid course.
Still, there are some other factors to consider that aren’t immediately obvious until you’ve looked at a lot of courses. And we’ve looked at thousands of courses to quality check the data we have on them.
The caveat here relates to how courses report the total length of a course.
The simplest way to measure length is to add up all of the lengths of videos found in a course. Subscription platforms tend to report length automatically this way. If you have five videos in a course that are each five minutes long, it’ll report itself as having a length of 25 minutes.
Instructors of freemium or paid courses, on the other hand, will estimate the time it takes to complete coursework in addition to lecture time. They may roll up the time it takes to complete readings, study, and pass graded tasks into into the reported length. So even though there are only 25 minutes of video in a course, you might end up with a total length multiples of that.
To adjust for this, we can make one last assumption. Many universities and colleges suggest that students spend 2-3 hours on coursework outside of lectures for each hour spent in the classroom. It’s not inconceivable that instructors also use this rule to come up with their own estimates for length.
If that’s the case, your effective cost per course hour for subscription courses winds up being about $2-3 per course hour. That puts them squarely in range of buying an individual course and vice versa.
The takeaway is that both subscriptions and individual courses both deliver roughly the same “value.”
When it comes to your learning though, cost is a rather shallow estimate of value. We present our cost analysis for the sake of presenting each facet of the freemium / paid vs. subscription debate.
In truth, getting the best “price per pound” is probably a lousy way to get the most out of online courses. It’s probably more meaningful instead to find a course that’s aligned to your goals. We’ve written an article here about how you can use course metadata—descriptions, syllabi, and other details—to find just the right course for you.