Big Investments Being Made in Online Education

Investing in online education has become big business. Since the beginning of September, news reports have surfaced of $5.7 million in venture capital going to a Chicago-based education startup called eSpark Learning. At the same time, the Canadian firm Desire2Learn reversed its strategy of not using external funding and raised $80 million.

eSpark, described by its founder and CEO as the Pandora radio for education, targets students in grades K-8. Students are given a custom playlist of apps and then asked to rate how much they like the app or how much they are learning, similar to the way Pandora listeners rate songs played, according to an article in TechCrunch.

Desire2Learn, which develops cloud-based learning systems, changed its funding strategy, in part, to keep up with the rapid pace of change in the online learning market. Blended learning programs, personalized learning, and open online courses have all contributed to that growth. Desire2Learn has responded by hiring 200 new employees in the past year, according to a report in Reuters.

Finally, the online educational startup Straighterline recently announced it will begin allowing college professors to attract online students to their for-credit courses through Straighterline and even set their own price for the course.

The company landed $10 million in investment capital last April and plans to use the funds to expand its marketing to institutions across the country. It already offers online learning in nearly 40 courses for a fee of $99 a month and a $39-per-course registration fee. Its long-term goal is to create a platform where students can pick and choose courses created by professors for credit.

“The idea is the student has those choices,” Burck Smith, founder of Straighterline, told The Baltimore Sun. “It’s really an experiment in creating a market for professors and students to meet up.”

New Study Shows Readers' Format Preferences Vary

The percentage of consumers are buying titles in digital formats has fallen, but more people are also saying they have no preference when it comes to the format of a book, according to the latest Book Industry Study Group e-book reading survey.

Consumer Attitudes Toward E-Book Reading reports the portion of consumers who “exclusively or mostly” buy e-books fell from nearly 70% in August 2011 to 60% just nine months later. At the same time, the percentage of respondents who either had no preference between e-book or print formats, or who bought some of both, went up from 25% to 34%, signaling that consumers have become more comfortable with a variety of reading formats.

The study found that ownership of the Amazon Kindle Fire has increased from 7% to 20% of respondents from December 2011 to June 2011, and that the use of multifunctional tables as a primary reading device is growing at about the same pace that the preference for dedicated e-readers has dropped. Preference for the Kindle as a primary reading device fell from 48% in August 2011 to 35% in May 2012, while black-and-white and color versions of the Nook e-reader slipped from 17% to 13% over the same period.

The Apple iPad remained steady in the ownership survey at 17% from August 2011 to May 2012, but now trails the Kindle Fire in the ownership category. The number of respondents who use the iPad as an e-reader also dipped from 10% to 9%.

While the iPad may have moved into second place in the BISG consumer survey, Student Monitor found that 66% of respondents to its survey of 1,200 college students say that the iPad was the “in” device on campus, even though fewer than 12% actually own one. At the same time, the Student Monitor research showed that 88% of students own a laptop computer, 19% have desktops, and just 10% say they own a tablet.

The research also found students’ preference in course material formats may be shifting. Printed textbooks continue to dominate sales, but students saying they “prefer traditional textbooks” has declined from 50% two years ago to 39% in the most recent Student Monitor report.