Death of Self-Pace eLearning
In a report published in August 2016 by Sam Adkins of Ambient Insight a declaration is made that self-paced eLearning is in a death spiral:
The worldwide five-year compound annual growth rate (CAGR) for self-paced eLearning is distinctly negative at -6.4%; global revenues for self-paced courseware are dropping fast. In 2016, global revenues for self-paced eLearning reached $46.6 billion, down slightly from the $46.9 billion in 2015. By 2021, worldwide revenues for eLearning will plummet to $33.4 billion. This report provides a status of the current self-paced eLearning industry and it doesn’t look healthy.
You can see the full report here. It is offered for free because they are no longer reporting on self-paced eLearning because of it’s dire condition–the self-paced eLearning downward spiral.
The company, Ambient Insight (Now Metaari) publishes quantitative syndicated reports that break out revenues by customer segment (demand-side) and by product category (supply-side) based on thier industry-leading learning technology taxonomy and our proprietary Evidence-based Research Methodology (ERM).
So let’s dig into the report because it’s not quite a death spiral and the need for good instructional design is bigger than ever. The report indicates that:
The global eLearning industry is now in the midst of a perfect storm of market conditions that are driving revenues down including weak demand for most self-paced products, commoditization, the late stage of eLearning’s product lifecycle, pronounced product substitution, and the so called leapfrog effect with buyers in developing countries completely bypassing eLearning for newer products.
The report points to a number of key factors, one of which is the declining use of eLearning in China. When I visited China two years ago, this same conclusion was glaringly apparent. In fact, in my blog post Games, Gamification & Learning in China I observed.
Several people told me that eLearning is “dead” in China. Instruction is delivered in one of three methods. Instructor-led, mobile-based or a hybrid of the two. The “traditional” eLearning courses are not taken on a computer or a laptop. Everything is mobile and when I say “mobile” I mean a phone NOT a tablet.
The Ambient report indicated that the most significant inhibitor in Asia is the negative growth rate for self-paced products in China. Ironically, the demand for digital English language learning is positive at 2.8% in China, yet 70% of the revenues are generating from the sales of mobile apps and Mobile Learning VAS subscriptions (Value-Added Subscription i.e. texting or a subscription to educational text-messages). So because China is such a large market, a negative trend in that market hurts the overall self-paced eLearning industry.
The report also indicates that in North American, the decline rate is negative at -6.2%. While this might not seem like much, the report points out that even with this modest decline, the result will be a loss of over $6.3 billion from the market between 2016 and 2021. This trend too is being played out in my consulting and observations. The demand for “traditional” eLearning is waning.
Is the Learning Industry Dead?
So does that mean eLearning developers need to take down their shingles and move on to other endeavors? Yes and no. First, while the industry is declining, it is still slated to be a $33 billion dollar industry in 2021. There will be survivors of the downward slide and always a need for self-paced eLearning.
The problem is as competition grows and the industry shrinks, we will see consolidation–as is typical in most technology industries. Plus, the big players will have all the leverage, marketshare and ability to push their products. Think of the huge self-paced learning purchase of Lynda.com by LinkedIn for $1.5 billion and the subsequent purchase of LinkedIn by Microsoft for $26.2 billion (but obviously for more than just the self-paced eLearning of Lynda.com). Competing with those companies and those types of resources would be difficult. The large size of these players will also put downward pressure on both development costs and on the retail price of the off-the-shelf, self-paced eLearning courses.
So while the self-paced, eLearning industry is declining, there is a shift occurring into other technologies. I have witnessed the shift of focus in my consulting where companies are seeking alternatives to eLearning such as mobile learning, virtual reality, gamification and other learning interventions outside of a computer or laptop delivered self-paced course.
In fact, the report indicates that “innovations like mobile learning, game-based learning and virtual reality are quickly moving to fill the void in eLearning.” The report calls the concept of the newer technologies replacing the older technology as “Product Substitution.” So for example, the report indicates that “product substitution is the major inhibitor in the Middle East with consumers opting for Mobile Learning products over self-paced courseware.”
This seems to indicate that if eLearning companies (and individuals in the field) are going to weather this sustained and continuing downturn, they are going to need to pivot from a pure self-paced eLearning offering to additional offerings including mobile, virtual reality and more cognitive learning products. Cognitive Learning products include: cognitive assessments, intelligent tutors, mobile brain training edugames, brain fitness games and applications. Part of this growth is due to the convergence of the technology and science of learning. Many of the gamified products use spaced practice and spaced retrieval which have both been shown to have positive impacts on learning. So the industry is shifting to different technologies and not disappearing.
Instructional Design Skills Still Needed
If you work for an eLearning company as an instructional designer, will you still be needed in this extended downturn of self-paced eLearning? My answer is a resounding “yes”! In fact, I think as the industry pivots to different technologies for the delivery of learning interventions, we’re going to need instructional designers. Designers and developers who understand the new technologies and the application of sound instructional approaches. I see instructional design skills in high demand as the industry pivots away from eLearning to these other delivery methods.
For example as the industry moves toward virtual reality, skills required for designing instruction in this environment are going to be required. So instructional designers are going to need know Principles for Creating a Successful Virtual Reality Learning Experience as well as Instructional Design Strategies For Virtual Reality Learning
Because of the need for good instructional design with these new technologies, the outlook for jobs for instructional designers is actually good in spite of the market for self-paced, eLearning dropping to a market of only $33 billion dollars.
In fact, according to Monster.com the job outlook for instructional designers is good, with an expected 3.5 percent increase in job openings through 2020. And other sources indicate that their is a challenge finding instructional designers because their is an inadequate supply and increasing competition for talent. Just three years ago, LinkedIn posted fewer than 5,000 instructional designer job openings. Today, the number has tripled. And CNN estimates that the instructional design profession will grow 28.3 percent over the next 10 years. (June 2016 article.)
Recruiter.com indicates that the overall job outlook for Instructional Designer or Technologist careers has been positive since 2004. Vacancies for this career have increased by 20.82 percent nationwide in that time, with an average growth of 3.47 percent per year.
Employment of training and development specialists is projected to grow 7 percent from 2014 to 2024, about as fast as the average for all occupations. Job prospects should be best for those with a bachelor’s degree and previous work experience in training and development and online and mobile training programs.
The shift away from self-paced eLearning means individual instructional designers need to skill up and eLearning companies need to start adopting new technologies and approaches such as gamification, cognitive assessments and edugames and apps and virtual reality sooner rather than later. The death of eLearning may be “greatly exaggerated” (to steal from Mark Twain) but the truth is that self-paced eLearning is on the decline. The smart money and smart designers will move toward the newer technologies and approaches.
If you want to learn more about gamification or virtual reality, check out these resources.
Here is a link to a video I did as part of a course on Gamification for Lynda.com now LinkedIn Learning.
Here is a video to help you understand Gamification.
- Articles of Interest:
Here is an article about game design.
Here are a couple of books on the subject of gamification.
Visit www.karlkapp.com for more information on gamification, new learning technologies and virtual reality.