Open business models, part 5: development costs

In the first post of this series, I mentioned that most OER publishers rely on philanthropy to fund initial product development and that I had questions about how sustainable this model is. First, if more K-12 OER doesn’t achieve higher adoption and use rates, I wonder how long funders will continue to fund it. More importantly, as a movement, it’s not wise to be reliant on handouts. In addition, the categorization of development costs as a one-time cost is outmoded.

So what are the options?

One might be to tap into a broader pool of funding that might include government grants, social impact bonds, or partner participation as described in previous posts.

Another is to think about this as a traditional business. Generate revenue streams as discussed earlier that fund not only sales and implementation costs, but also product development.

Now this sounds a lot like a traditional publishing stuff. Sales, costs, maybe even reinvestable proceeds (“profits”). And while the price under this scenario would be higher than under a model under which development is funded through philanthropy, I think it would still be less than commercial products.

Another important distinction is that in this case the primary goal is social impact not profits.

There are a number of other benefits as well.

1. The affordances of an open license not only make “free” product available, but also lead to other unanticipated benefits.
2. Teachers professionalism and student learning can increase.
3. There is a loop for continual product (and process) improvement.
4. Open collaboration across states and districts using common materials leads to more collaboration and richer learning for everyone.
5. (and perhaps) OER moves the system toward more openness.

Ultimately, learners benefit.

To me, these things are the foundation of what makes OER appealing.

(This is a part of a series on business models for OER K-12 core curriculum.)