How much does it cost to create an online course?

How much does it cost to develop an online course?

The eLearning market is rapidly growing and is projected to reach a market value of USD 645 billion by 2030, with an estimated CAGR of 13%. This growth has led to an increasing interest in developing online courses. However, the cost of creating an online course can be a significant challenge. In this article, we will explore the various factors impacting the cost of developing an online course in 2023, and compare it to previous years, providing insight into industry changes. Without further ado, let’s get started.

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Member of the Board, Raccoon Gang

Sergiy has 18 years of experience in eLearning and management. Creating educational programs, career paths, online and offline courses he is making the educational world better as a co-founder of RG.

How much does it cost to develop an online course?

Online Course Development Price According to Researchers

Back in 2010, the Chapman Alliance conducted a comprehensive study that revealed that it could cost around $10,000 to produce one hour of educational content. You might wonder why the emphasis is on ‘around’. The logic is simple. The price tag escalates with the augmentation of features and the quest for increased dynamism and interactivity in the course. Despite these revelations, the time has flowed like a swift river, rendering these data points outdated. We are here to help illuminate the present situation through our meticulous study.

The analysis will be enhanced with some key information: The lion’s share of the cost of online course development is human effort and labor. This is trailed by the expense incurred on equipment and software necessary for the task. If you decide to take the reins and create the online course yourself, you’re essentially incurring minimal costs beyond the value of your time.

In our detailed analysis of how much does it cost to create an online course, we will provide you with the following information:

  • New information as of March 2023 will show the numbers of developing an online course from scratch.
  • A detailed analysis of all development elements and a breakdown into the roles of participants in the course creation.

All subsequent information was collected from open sources and is also the result of a compilation of our experience in tailoring custom online learning solutions.

Cost to Develop an Online Course — It’s all About the Chosen Model

ADDIE model example

To begin with, it is worth clarifying that the values of the final development price tag largely depend on which educational design model you choose. To avoid confusion, in our estimate, we will consider only one model named ADDIE. This model is the most common way how to develop an online course and is an abbreviation where:

  • “A” is for Analysis. At the analysis stage, you should carefully study the market that you will enter and your competitors. This will help you develop a unique solution that will stand out from the background and provide a personalized experience for each client.

  • “D” is for Design. The design phase deals with working out the appearance of your teaching material.

  • “D” is for Development. The primary and most crucial stage during which you develop educational material (write text, create assignments, presentations, and much more)

  • “I” is for Implementation. All the finished material is added to the LMS at this stage, structured into an online course. In addition, during this stage, the first tests of the online course are passed to eliminate bugs and mistakes in learning material.

  • “E” is for Evaluation. The final stage is when the analyst comes into play. You carefully monitor the success of the course and compare the indicators with the set objectives and goals.

Creating a course is almost impossible without a team of specialists who will take on specific tasks.

  • SME or Subject Matter Expert – A specialist in the field in which your course will provide training material. They are engaged in research, text writing, lecture notes, and much more.

  • The instructional design team– Graphic designers, cameramen, video editors, and others.

  • Project Manager – Course owner who oversees all aspects of course development and overall progress.

  • Technical staff specialists– A group of people responsible for the technical part of the course creation (QA engineers, DevOps specialists, content managers, and others).

Now for a final note. In this article, we will consider all the stages of the ADDIE model except the final Evaluation, since this stage depends on the type of course, the niche it occupies, the LMS system on which it is based, and much more. As a prime example, we created an hour-long abstract course that consists of the video material, text content, visual content (charts, graphs, and much more).

Let’s dive in!

Stage #1. Analysis and its Cost

How to develop an online course and make it right? Start with analysis. You hardly want your course to go unnoticed and hang like a dead weight. That is why it is essential to conduct an analysis stage that will help clarify the feasibility of creating a course from an economic and social perspective. The analysis stage includes the following aspects:

  • Target audience research

  • Analysis of competition in the selected niche

  • Analysis of available and preferred ways of promotion

Further, along with the text, we will mainly present all the information in tables since they allow us to display important information and the pricing policy of developing an online course as clearly as possible. Prices for the services of certain specialists will be taken from open recruitment sites such as Upwork, SalaryExpert.com, Indeed.com, and others. Now, let’s move on to the price of the analysis stage.

Team roles Involvement stages Time, hrs Hourly rate, $ Overall check, $
Course owner All Individual Individual Individual
Marketing specialists Analysis 30-40 35-85 1050-3400

Once the analysis stage is set and done, it’s time to proceed to the design sequence.

Stage #2. Design Cost

Phase name Specialists involved Time, hrs Upwork rates,$ Contractors’ rates,$ Experts’ rates,$ Overall check,$
Consultations with SME SME 10-15 Individual Individual Individual Individual
Psycholinguist 10-15 30-40 30-40 65+ 300-975
Lecturer 10-15 20-50 25-55 60+ 250-900
PM 10-15 30-60 30-75 75+ 300-1125
Instructional designer 10-15 30-60 15-80 85+ 150-1275
Designing visual content Lecturer 24-36 20-50 25-55 60+ 600-2160
Instructional designer 24-36 30-60 15-80 85+ 360-3060
Graphic designer 24-36 20-50 25-55 70+ 600-2520
Designing practical tasks Lecturer 6-8 20-50 25-55 60+ 150-480
Instructional designer 6-8 30-60 15-80 85+ 90-680

Note: How to develop an online course and save some resources? You must have a well-organized “face-to-face training content” rich in various media materials, visual content, and more. This content will help you quickly create a course storyboard for subsequent structuring, addition, alteration, and other integral operations of online course development.

Stage #3. Development Price

Phase name Specialists involved Time, hrs Upwork rates,$ Contractors’ rates,$ Experts’ rates,$ Overall check,$
Writing notes Lecturer 10-20 20-50 25-55 60+ 250-1200
Instructional designer 10-20 30-60 15-80 85+ 150-1700
Psycholinguist 10-20 30-40 30-40 65+ 300-1300
Video guideline design Graphic designer 15-20 20-50 25-55 70+ 375-1400
Video editor 15-20 23-50 25-60 60+ 375-1200
Shooting videos Lecturer 3-5 20-50 25-55 60+ 75-300
Video operator 3-5 21-50 30-60 80+ 90-400
Director 3-5 60-90 60-90 90+ 180-450
Intro design Graphic designer 20-30 20-50 25-55 70+ 500-2100
Video editor 20-30 23-50 25-60 60+ 500-1800
Editing videos Video editor 16-20 23-50 25-60 60+ 400-1200

Stage #4. Implementation Price

So, all the training material is ready, and now is the time to add it to your chosen LMS. However, this is not just a process of “pouring” content into the system. It is necessary to fully transform it into a ready-made course using the LMS tools. In addition, it is vital to ensure the maximum quality of the finished course, so proofreading and error checking is critical.

Phase name Specialists involved Time, hrs Upwork rates,$ Contractors’ rates,$ Experts’ rates,$ Overall check,$
Course upload Content manager 2-3 15-60 15-60 75+ 30-225
Content manager 30-40 15-60 15-60 75+ 450-3000
QA PM 30-40 30-60 30-75 75+ 900-3000
Course owner 30-40 Individual Individual Individual Individual
Course creation monitoring Course owner 2-3 (daily) Individual Individual Individual Individual
Project management PM 2-3 (daily) 30-60 30-75 75+ 60-225

Also, do not forget that the LMS setup is included in the final check.

Team member Hours Hourly rate, $ Overall check, $
DevOps Engineer 50-80 50-75 2500-6000
Quality Assurance Specialist 15-50 40-50 600-2500

Note: All of the above roles can be combined to one degree or another in one specialist, for example, a video operator and a video editor in one person. In addition, the development phases can also be combined. These two facts can reduce the cost of development stages by 30%.

Price on Open edX Platform

The Open edX platform is an open-source learning management system (LMS) that allows you to create online courses on a large scale. The platform itself is free to use, but there are other costs associated with setting up and running an online course on Open edX.

  1. Setup and Configuration: Although the Open edX platform is free, setting it up requires technical knowledge. You may need to hire a developer or a team to do the initial setup and configuration. This includes installing the platform, setting up the servers, and configuring the software to meet your specific needs. The cost can vary depending on the complexity of the setup and the hourly rates of the developers.
  2. Course Development: Just like with any other platform, you will need to create the course content. This includes writing the course materials, creating multimedia content, designing quizzes and assessments, and more. The cost can vary depending on the length and complexity of the course and the rates of the professionals involved in the creation process.
  3. Maintenance and Upgrades: The Open edX platform is regularly updated with new features and improvements. To keep your platform running smoothly and take advantage of these updates, you will need to maintain and upgrade your installation regularly. This may require the services of a developer or a team, which will add to the costs.
  4. Hosting: The Open edX platform needs to be hosted on a server. You can choose to host it on your own servers, or you can use a hosting service. The cost of hosting can vary depending on the size of your course, the number of students, and the hosting provider you choose. Remember, while the Open edX platform is a robust and flexible solution for online learning, it requires significant time and resources to set up and run effectively. It’s important to factor in all these costs when considering using Open edX for your online course.

If you’re exploring alternatives to managing the costs and complexities associated with setting up and running an online course on the Open edX platform, consider Tanuki – the SaaS LMS for Online Courses by Raccoon Gang. Tanuki offers a streamlined and innovative LMS subscription service, leveraging the robust Open edX® platform. With Tanuki, you gain a hassle-free solution for creating, managing, and delivering online courses. Explore the convenience of Tanuki as your comprehensive SaaS option for online course management.

Wrapping Up

Technology and trends in online course development force the eLearning industry to keep up with the times and stay up-to-date. Additionally, the most successful courses require constant revision and improvement to correspond to today’s realities.

To further illustrate the effectiveness and practicality of these strategies, let’s look at some case studies and success stories from previous courses that we’ve developed. These examples showcase our expertise in online course development and provide real-world insights into the process and outcomes, which can be invaluable for those considering creating their own online course. That is why you will face additional costs for various course improvements even after the final release. Now, let’s look at the final estimate of each development participant and the total cost of creating an online course.

Team roles Involvement stages Time, hrs Rate,$ Final paycheck,$
Course owner All Individual Individual Individual
SME Design Individual Individual Individual
PM All 40-55 30-75 1200-4125
Instructional designer Design, development 50-79 15-80 750-6320
Marketer Analysis 30-40 35-85 1050-3400
Lecturer Design, development 53-84 25-55 1325-4620
Psycholinguist Design, development 20-35 30-40 600-1400
Graphic designer Design, development 59-86 25-55 1475-4730
Director Development 3-5 60-90 180-450
Video operator Development 3-5 30-60 90-300
Video Editor Development 51-110 25-60 1275-6600
Content manager Implementation 32-43 15-60 480-2580
Overall cost,$ 8425-34525

In the table below, you can see how numbers evolved during 2019-2022.

Year 1 hour of eLearning content costs, $
2022 8,425 – 34,525 (21,475 on average)
2021 8,542 – 36,320 (22,431 on average)
2020 8,150 – 36,205 (22,178 on average)
2019 7,830 – 37,365 (22,598 on average)

Changes in online course creation rates: 2022/2021

Role Min rate increase/decrease Max rate increase/decrease
Marketer +16% +13%
PM 0% 0%
Content manager -57% +15%
Graphic designer +9% 0%
Instructional designer  0% -6%
Lecturer  0% 0%
Psycholinguist  0% 0%
Video Editor +25% 0%
Video operator +50% 0%
Director -14% 0%
SME Individual Individual

Note: Online course development is a multi-stage and complex process, and thoroughly knowing the price in advance is impossible. Too many variables in the final price tag equation affect pricing. To get a complete and accurate estimate, you should contact the experts in online course creation and book a demo to tell all the details about your upcoming project.

Summary

In summary, creating an online course is a multifaceted process that involves various stages, each requiring specific skills and resources. However, with the right approach and commitment, developing an engaging and effective online course that meets your learners’ needs and expectations is possible. Remember, the most successful courses require constant revision and improvement to correspond to today’s realities, and considering the trends in eLearning, it’s clear that online course development is a worthwhile investment. Whether you’re planning to create your first online course or looking to improve an existing one, we hope this article has provided you with valuable insights and guidance.

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