Colleges Assess Cost of Free Online-Only Courses

The offer inspired Todd Watson, an I.B.M. executive in Austin, Tex., to update his knowledge of corporate finance. But who needs tuition? Instead, he signed up for a free finance class created by the prestigious University of Michigan and offered by a start-up called Coursera. The company promotes massive online open courses — known as MOOCs.

“Voilà, problem solved,” wrote Mr. Watson on his blog. He could now rekindle his finance “love” and study “at no cost to myself or to I.B.M.”

Mr. Watson solved his problem, but he represents a larger one for many colleges and universities: MOOCs threaten to poach paying students. But at the same time, emerging competition in higher and continuing education will most likely lower costs for students.

Often likened to a tsunami or an avalanche, the free online learning juggernaut gained momentum in the past year. Coursera, which counts Columbia and Princeton among its elite affiliates, has two main competitors.

A nonprofit venture founded by Harvard and the Massachusetts Institute of Technology, edX features 26 classes, including “Quantum Mechanics and Quantum Computation.“

Another competitor, Udacity, backed by venture capitalists, was begun by Sebastian Thrun, an acclaimed computer science professor, after more than 160,000 students took his online artificial-intelligence course at Stanford University. He thinks Udacity will ultimately increase enrollment at brick-and-mortar institutions by preparing more underserved high school students for college.

“There’s a distinction that people often don’t make,” said Professor Thrun, “which is whether these classes reach existing students and take away business, or whether they reach new students and add to the business?”

While that question is being answered, MOOC-phobia continues to spread. Last year, the University Professional and Continuing Education Association entitled its annual conference “Resilience.” This year’s event is called “Disruption 2.0.”

“Everybody should be afraid of MOOCs,” said Gary W. Matkin, dean of continuing education, distance learning and summer session at the University of California, Irvine, “although there are some that should be more afraid than others.”

He scoffs at the notion that MOOCs threaten top-tier residential universities, like his own. In fact, he headed his university’s alliance with Coursera.

For the universities that create free online courses, mainly major colleges with A-plus brands, relationships with Coursera, Udacity and edX could pay dividends. Mega classes, which can draw hundreds of thousands of students, may aid faculty retention, providing a perk for star professors. And all MOOC marketers promise to share revenues with partner universities, although the path to profitability is murky.

Professor Thrun, Udacity’s chief executive, concedes this. “The truth is for all these massive online courses that are being offered for free, there’s clearly a question of what our business model is, and I don’t think there is a good answer quite yet,” he said.

Still, Mr. Matkin forecasts tough times ahead for what he calls the “mediocre middle” — institutions that have not been invited into what amounts to a higher-education V.I.P. room.

The future is brighter for students, whether in continuing education or not. Mr. Matkin says he believes that as colleges start to give credits to students who complete MOOCs, market forces will pressure many other institutions to liberalize their credit-transfer policies, bringing educational costs down.

Last month, the American Council on Education’s College Credit Recommendation Service, which many institutions rely on to assess whether workplace and military training courses merit credit, included free online courses for the first time. Five Coursera courses passed the test, and four Udacity classes have a received a “preliminary thumbs up,” said Professor Thrun.

“If people are coming at you and they’ve got learning that they can demonstrate from other institutions, are you going to turn them away?” asked Mr. Matkin. “Or are you going to make them take that class over again? I don’t think so.”

Online-Only TV Shows Join Fight for Attention

When Amazon sizes up the television marketplace, it sees opportunity. Internet-delivered TV, which until recently was unready for prime time, is the new front in the war for Americans’ attention spans. Netflix is following up on the $100 million drama “House of Cards” with four more series this year. Microsoft is producing programming for the Xbox video game console with the help of a former CBS president. Other companies, from AOL to Sony to Twitter, are likely to follow.

The companies are, in effect, creating new networks for television through broadband pipes and also giving rise to new rivalries — among one another, as between Amazon and Netflix, and with the big but vulnerable broadcast networks as well.

“These are the very first lab tests in a very grand experiment,” said Jeff Berman, the president of BermanBraun, a media company that makes programming for NBC, HGTV, AOL and YouTube, among others.

As he suggested, the competition has only just begun. Amazon is making pilot episodes for at least six comedies and five children’s shows, with more to be announced soon. Sometime this spring it will put the episodes on its Amazon Prime Instant Video service and ask its customers which ones they like, then order full seasons of some of them.

Netflix has been ordering entire seasons of its shows without seeing pilots first. Reed Hastings, Netflix’s chief executive, said last week that “House of Cards,” the political thriller starring Kevin Spacey and Robin Wright, had been a “great success” for the company. Its next program, a horror series called “Hemlock Grove” from the film director Eli Roth, premieres in April.

Microsoft has said comparatively little about its plans. But all three companies are commissioning TV shows because they have millions of subscribers on monthly or yearly subscription plans. Though the shows may be loss leaders, executives say that having exclusive content — something that cannot be seen anywhere else — increases the likelihood that existing subscribers will keep paying and that new ones will sign up.

The proliferation of shows is generally seen as a good thing for viewers, who have more choices about what to watch and when, and for producers and actors, who have more places to be seen and heard. But the trend may inflame cable companies’ concerns about cord-cutting by subscribers who decide there’s enough to watch online. At the same time, the rise of Internet-only shows may make viewers more dependent on the broadband cord. In many cases, though, both cable and broadband are supplied by the same company.

Unlike the early stabs at Internet television, these shows look and feel like traditional TV. That is partly because more viewers are watching Internet content on big-screen TV sets, but it is mostly because the companies involved are throwing money at the screens: each of the Amazon comedy pilots cost the company upward of $1 million, according to people involved in their production, which is less than the $2 million invested in a broadcast comedy pilot, but more than is typically invested in cable pilots.

Not only are the budgets comparable, so are the perks for actors and creators — like trailers and car-service pickups. The writers are guild members. The actors have what the people involved say are standard television contracts, with options for several seasons if shows succeed.

“There’s absolutely no difference” between TV and these new productions, said Jeffrey Tambor, who starred in HBO’s “Larry Sanders Show,” then Fox’s “Arrested Development.” Now, at 68, he is an online pioneer: earlier this year he reprised his character for Netflix’s new season of “Arrested,” which will make its premiere in May. While taping that show, he read the script for “The Onion Presents: The News,” an Amazon pilot. He signed up, and played the older rival to Cheyenne Jackson.

The “Onion” producers took over half of the newsroom of NY1, a New York news channel, in mid-February and reimagined it as the headquarters of an unscrupulous news corporation. (In the pilot episode, a reporter kidnaps a child to increase ratings.) NY1 had rented out its space to the producers of “Gossip Girl,” “Damages” and “The Good Wife” before — but never to a show being made for the Web. For most of the actors there, like Mr. Jackson, a Broadway star whose TV credits include “30 Rock” and “Glee,” the taping was their one pilot of the season — and thus represented a bet on Amazon over the broadcasters.

Mr. Jackson recalled that his manager called about “The Onion” with a note of apprehension in her voice. “It’s online,” she said. “We have to talk about this.” But when he read the script, he said, he felt confident — the tone of it reminded him of “30 Rock.”

“This is kind of a leap of faith,” he said between tapings. “We’re all taking a leap together.”

Analysts say they expect more TV investment to come, including from companies that do not have monthly subscribers to please. YouTube, for instance, the biggest video Web site of all, makes its money from ads, not from subscriptions. But it has paid dozens of outside producers to start channels so that it has original, professional content. And its owner, Google, can afford to pay many more.

Similar logic is spurring cable channels, which each receive a small piece of cable subscribers’ monthly payments, to come up with more dramas and sitcoms that they can call their own. This brings up a conundrum, of course: too much great TV to watch, and not enough time.

“Viewers find organizing and managing all of their beloved TV options to be a bit stressful,” said Christy Tanner, the chief executive of TVGuide.com, which conducted research that found respondents who said “it feels like work” and “I’m afraid of missing something.”

Nonetheless, the number of companies trying to elbow into the TV space is only going up — further proving the nearly 20-year-old adage that “content is king.” Witness DirecTV, the biggest satellite distributor in the country, which is planning to introduce its first homegrown show, a thriller called “Rogue,” next month. Christopher Long, who runs DirecTV’s original programming, said he wanted to buy several more shows: “Our opinion is, if we build good enough television, people will find it.”