Nearly two years ago I wrote two blog posts giving a high-level view of the Online Program Management (OPM) market landscape. This is a growing but messy market, and the market changes since mid 2016 call for an updated view.
OPM providers are for-profit organizations that help non-profit schools develop online programs, most often for Master’s level programs. These companies provide various services for which traditional institutions historically have not had the experience or organizational capability to fully support, at least for fully-online programs and often for non-traditional student populations. Some examples of the services include marketing & recruitment, enrollment management, curriculum development, online course design, student retention support, technology infrastructure, and student & faculty call center support.
The OPM market has historically been known for a full-service, revenue-sharing model, based on the premise that most traditional institutions are not only operationally unprepared to offer online programs at scale but also are not set up to invest in online programs up front. There are extensive costs, particularly in marketing and recruitment as well as curriculum and course design, that cause most scalable online programs (that is, those designed with the intent and infrastructure to allow more than just a few dozen students) to require investment over the first several years, before tuition revenue catches up. Rather than requiring the institution to spend sizable up-front money without a guarantee of repayment, revenue-sharing OPM vendors provide this financing themselves – which is in itself an expensive proposition. It often takes three to five years for an OPM company to become profitable for any online program, which is why they often require 10-year or even longer contracts.