US Online Learning Earnings Remain High Despite Lack of Growth

    The corporate IT segment, itbusinessnet.com, has published an overview of a study by Ambient Insight, which examines the possibilities of the online learning market in 2015-2020.



    We already wrote about such reviews earlier, when we talked about the fact that the corporate online learning market in the USA reached $ 70 billion and that, according to some forecasts, it will grow faster than the global economy .

    A new study notes that the growth rate of the online learning market showed a negative percentage growth of -2.7%, i.e. the market stopped growing and showed a downward trend. It is noted that this is the first such case in the history of the American online education industry.

    Nevertheless, on a global scale, most of the revenue revolves on the American online education market. In second place for this indicator are China and South Korea. However, according to researchers, by 2020, the share of revenue in the US market will be four times higher than in China and ten times higher than in South Korea. From this we can conclude that the United States remains the most profitable market for providers of educational online services.

    Researchers believe that the online education market in the United States has entered that stage of the product life cycle, which is commonly called “value migration” (value migration [1]). This stage is characterized by commoditization, i.e. loss of significant consumer differences between products of any category, as well as substitution (substitution) of one product for another. In the commoditized market, demand is very high, large volumes of products are sold, but at the same time, prices fall due to the fact that suppliers compete only in price. Commoditization is also characterized by insufficient differentiation of products - consumers are looking for a better price and do not chase the brand, since they are basically the same thing.

    The substitution is that customers easily migrate towards new products. So, there is a clear tendency for consumers to opt for mobile learning instead of directly online learning, which, in turn, negatively affects income in this segment. Thus, the growth of profitability of online education in the consumer segment amounted to -4.4% - this is the lowest indicator in all segments. On the contrary, mobile training in the same segment shows an increase of 9.6%.

    Despite the negative growth rates, there is a demand for individual online educational products in certain segments. Thus, in the higher education segment, the demand rests on the outsourcing of educational products ( Managed Services), and in the corporate segment the demand for online content for teaching foreign languages ​​does not decrease.

    The study was conducted in two directions: analysis of supply and demand. In addition, a list of US online service providers is provided. Demand is divided into six segments: consumers, government agencies at the federal level, school education, state and municipal agencies, higher education institutions, and the corporate segment (corporations & businesses).

    The corporate segment is divided vertically, into industries, as well as into four groups of companies by size. Earnings for online learning in the US corporate sector are still mainly concentrated around industrial organizations and large companies (LORGs).

    An analysis of the proposal revealed three types of products for each of the customer segments: retail content, customized content services, as well as tools or platforms (tools / platforms). Consumers buy only educational content, for which the study identified ten main types. Also, the researchers gave a five-year forecast about the prospects for various types of content in the corporate sector.

    According to Sam S. Adkins, study leader, there are income opportunities even with negative market growth. The difficulty may be that online education providers may not always recognize them. In difficult market conditions, the main thing for them is to have clear data on their competitive environment. According to him, this is the most detailed study of the online education market in the United States, available at the moment.

    [1] Slywotzky, Adrian. Value Migration: How to Think Several Moves Ahead of the Competition. McGraw Hill, New York, 1996.


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