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How much does it cost to create an online course?

eLearning market is on the rise, more and more people join the distance learning industry and the question they quite often ask is how much it costs to develop an online course. We have prepared new updates that might be used to help course authors understand how much course creation costs in 2018 compared to 2017. What are the main changes and how to avoid paying extra, read below in our post

26811 19/01/2018

How much does it cost to create an online course?

study by Karl Kapp and Robyn Defelice (Kapp is the author of bestselling “The Gamification of eLearning and Instruction”) demonstrates the timeframes for producing one hour of distance learning materials and shows that it takes 90-240 hours on average. Another research by Chapman Alliance conducted back in 2010 states that an hour of eLearning costs ~$10,000 to produce. (This goes for basic course interactivity and media richness level; more features — more time and money).

However, there are 2 points to consider:

  1. The results of these researchers are outdated a bit
  2. These numbers are covering overall costs but sometimes it’s crucial to understand more detailed structure of estimates of producing a distance learning

Here’s what we are going to share with you:

  1. Updated data (as of January 2018) on the timeframes and costs of online course design and development from scratch to deployment
  2. Dissected data for each stage of the process: roles, timeframes, costs

The information is based on research of open data sources like Wikipedia, existing research results, and our experience.

eLearning costs estimates: it all depends on the model

The online course design and development costs depend heavily on the instructional design model chosen. In this article we depict one of the most widespread and efficient instructional design and development approaches — the ADDIE model:

  1. Analysis —  market (is there a granted demand for the course or should it be marketed as any other commodity), competition (what other courses are available on the subject and how are they promoted) and content analysis (is there a content ready to use, and if not — how much will it cost to produce it)
  2. Design —  designing the distance learning materials following the instructional design best practices
  3. Development — writing lecture notes, practical tasks, and quizzes, creating graphs, diagrams, video materials, etc.
  4. Implementation — uploading the online course content into an LMS of your choice; organizing it into an online course; QA of the ready product, including the pilot run; deploying the LMS if need be
  5. Evaluation — monitoring the course performance, feedback, and comments of learners; adjusting the content to reach maximum ROI

Online course creation by this model requires the involvement of such roles:

  1. SME’s — subject matter expert(s) (expertise owner, course text writer, lecturer)
  2. Instructional design (ID) team — content creation team (instructional designer, psycholinguist, graphic designer, video operator, director, video editor)
  3. PM — project management team (course owner, project manager)
  4. TSS — technical staff specialists (content manager, QA specialist, DevOps)

We will describe a process of designing an online course, covering the A, D, D, and I points of ADDIE model. In this example we picture the course consisting of 1 hour of video content filled with texts, diagrams, graphs, quizzes, etc. To calculate the costs of creating an online course using the ADDIE model and the abovementioned team, we’ve researched and evaluated such stages:

  1. Research and analytical expenses
  2. Time and money invested in online course design
  3. Time and money invested in content development and implementation 

We do not cover the costs of evaluation stage of the course design, as these vary depending on the course niche, LMS chosen and several other factors. 

This illustration shows the core processes and roles in online course design and development:

Online course development team roles

Let’s take a closer look at the online course design and development process.

“A” stage: Research and Analytical Expenses

The course should be feasible, either from an economic or social-economic perspective (brand awareness growth, corporate culture improvement, employee onboarding training, non-profit initiatives, etc.). Therefore, before producing a course one should undertake such researches:

  1. Target audience research 
  2. Research of current competition in the niche
  3. Exploration of preferred promotion channels 

Broad estimates of analysis stage are shown in the table below:

Online course development costs: Analysis stage expenses

We will describe the remaining stages in tables mostly, in order to be as brief and informative as possible. Hourly rates vary depending upon the team selection — composing the team on Upwork, hiring a contractor’s team to produce the content or working with individual experts. Average hourly rates are taken from Upwork, SalaryExpert.com, Indeed.com, and existing research results.

Here is the clarification of all tables’ contents:

  1. The rows highlighted in yellow are the fixed time and money investments that do not depend on the course length
  2. During the video production stage, we calculated only the video operator’s wage, equipment, and studio rental were excluded
  3. Video editing phase length depends heavily on the content richness - how many charts and diagrams, quizzes and questionnaires will be inserted.

“D stage”: Time and Money Invested in Online Course Design

Online course development costs: Design stage expenses

Important note: Having a well-organized “face-to-face learning content” — rich with media, graphs, diagrams, and other learning materials that can be easily composed into a storyboard, infused with quizzes and transformed into an online course — helps cut down the expenses by up to 30%. As we all know, SME's time costs a lot, so use it wisely.

“D” stage: Time and Money Invested in eLearning Content Development 

Online course development costs: Development stage expenses

"I" stage: Course Content Deployment

Once the design and development stages of distance learning materials production are over, the course owner/content manager should deploy the content into the LMS of their choice and compile them into a ready online learning course. After that the quality assurance process begins, involving launching a pilot run of the course, testing it by several people (usually the project management team and/or some beta-testers chosen amongst students), gathering feedback and applying changes if need be.

Online course development costs: Implementation stage expenses

If the course author wants to launch their own platform for the course, LMS setup costs are added to the check:

Online course development costs: LMS deployment costs

A couple more important aspects one needs to take into account:

  1. Some team roles can be combined (video operator, director, and video editor, for example), which leads to price decrease
  2. Some workflow phases can be combined (especially in the design stage), which leads to further time and price reduction 

Considering these ways of reducing costs, “D, D, I” stages can be up to 30% cheaper.

Conclusions

The eLearning market changes, new trends, and technologies rise and the course should remain relevant. As we all know, even the most popular distance learning courses might need to be adjusted over time, if new breakthroughs occur in the subject matter, new data should be added or some statistics should be updated.

In short, distance learning courses should be regularly evaluated and updated if need be.Thus said, even when the course is published some additional expenses occur over time, though they are excluded from the scope of this article.

Finally, let’s take a look at the team’s overall involvement timeframes and rates:

Online course design and development team's timeframes and rates

To sum it up, here is what we can say about online course design and development costs and timeframes, based on our experience and recent research:

  1. 1 hour of ready online learning content takes 100-160 hours to produce
  2. 1 hour of ready eLearning content costs $8,880-$28,640 ($18,760 on average) to produce (if the job is done by skilled contractors, the costs can be lowered by up to 30%)

Just for comparison: last June the cost of producing 1 hour of ready online course content was $7,140-35,550  ($21,345 on average) which means that creating an online course is now approximately 12% cheaper. The reason for such decrease is that Lecturers on Upwork lowered their hourly rates by $40. If you already sell online courses, consider updating your resources to optimize the costs. We should also mention that minimal course creation cost is increased by 24% due to the increase in hourly rates of Project Managers and Development Specialists.

We are going to systematically update this article to keep the data relevant. Feel free to use it to calculate your online course design and development costs!

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