The newest quarterly report from Validated Insights shows an ongoing drop in traditional revenue-share arrangements, while fee-for-service partnerships begin to dominate.

According to the newly released quarterly report from higher education marketing and research firm Validated Insights, the marketplace for online program managers (OPM) is in continued significant retraction and transition, as the fee-for-service model now represents more than half of new contracts.

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The marketplace for online program managers (OPM) is in continued significant retraction and transition, as the fee-for-service model now represents more than half of new contracts. The newest quarterly report from Validated Insights shows an ongoing drop in traditional revenue-share arrangements, while fee-for-service partnerships begin to dominate the OPM market. Find the report at ValidatedInsights.com. (Graphic: Business Wire)

In their October 2024 report on the OPM market, Validated Insights found that new partnership activity was down 56.1% from the first half of 2023 to the first half of 2024. This new February quarterly update shows that new OPM partnership activity continued that decline for the year, dropping 42.1% in 2024, to a level not seen since 2016/17.

The new report shows that, for all of 2024, just 81 new OPM partnerships were launched.

The biggest change in the market, according to the new report, is the type of arrangement that most colleges and OPM providers are enacting – the fee-for-service model, as opposed to the revenue-share approach. According to the report, “From 2014 to 2024, the share of new OPM partnerships established that were fee-for-service partnerships grew from 12% to 58%.”

“This is a drastic change in business relationship and revenue in what is a very important, multi-billion-dollar market,” said Brady Colby, Head of Market Research at Validated Insights and founder of Thirty Two Edu, which was acquired by Validated Insights in 2023. Brady Colby and Thirty Two Edu provided the data and analysis used in previous market reports from HolonIQ and others. “Fee-for-Service is now the norm in the OPM market,” he said.

The new report also outlines new regulatory guidance that is likely to impact the OPM sector. It also examines the types of academic programs that OPMs are creating with institutional partners, finding that, “the MBA was the most launched program by OPMs in 2024.”

“Continued expansion and creation of online MBA programs is worth watching because, as we noted in our very recent report on MBA programs specifically, the online MBA market is already pushing saturation and per-program enrollment levels are contracting, despite the online MBA market growing overall,” said Colby. The MBA report was released in January.

“What we’re watching in the OPM market is quite remarkable and it tells us a great deal about how schools are thinking about their online programs into the future, where they are investing and how they expect their programs to fare in a highly competitive environment,” said Yelena Shapiro, Founder & CEO at Validated Insights.

“The new dominance of the fee-for-service approach may signal that OPMs themselves are worried about high-end and long-term revenue growth in the programs they support. Or it could signal that schools are bargain shopping and less willing to ink long-term deals in an uncertain market,” she said. “Either way, even with total interest and enrollment in online programs growing steadily, the underlying business trends are signaling caution, that taking a program online is enough to bring flocks of students are gone,” Shapiro added.

Validated Insights will release report updates on the OPM market quarterly, along with other timely and relevant information about higher education and the higher education market. To receive future reports from Validated Insights, follow Higher Ed News by VI on LinkedIn.

About Validated Insights

Validated Insights is an agile marketing agency specializing in helping higher education institutions achieve and exceed their goals. With a comprehensive suite of services, including digital marketing, paid search, paid social, and web strategy, Validated Insights delivers data-driven strategies and measurable results. The agency's agile testing approach enables short- and long-term growth through better creative, strategy, media execution and continuous brand building. Validated Insights is the only agency in the higher education space to offer a performance guarantee in KPIs in the first 60 days - and continuous growth beyond that.

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“Fee-for-Service is now the norm in the OPM market”