How Can App-Based Language Learning Providers Catch the Next Wave of Growth?

March 25, 2021 By Lance Huang In Business

In my previous article, I mentioned how Duolingo successfully monetized its online proctoring and language assessment services. I also noticed Busuu, another leading language learning app, offers online placement tests. Seeing the rapid growth of the online assessment business, I began to ponder if language learning apps can replicate this success by embedding Real-Time Engagement (RTE) in other aspects of their products and ecosystems. How will RTE fuel the next wave of business growth for app-based language learning providers?

Increasing Growth but Lagging Outcomes

Duolingo hit 42 million monthly active users (MAU) last year, but there is still room for improvement in learning experience and revenue growth.

Language training without language proficiency
Duolingo’s main app only offers self-paced, asynchronous learning content which means learners don’t have the option to practice speaking with others. Although Duolingo has effectively gamified the learning experience, users have limited access to systematic training on grammar and writing. This sometimes leads to learners just randomly picking words to see what fits, which is guessing instead of learning.
Low course completion rate
According to Duolingo Forum, the percentage of users who completed all the courses (i.e. Duolingo trees) for each language generally falls below 0.1%. Even though Duolingo offers bite-sized learning content and activities, few students complete all the available lessons.
Low paying–customer conversion rates
Duolingo leverages a freemium business model to establish a large user base which gives most of its users the opportunity to take a free ride. According to Reuters, 80% of Duolingo’s revenue came from just 4% of its users. If some customers are willing to pay more than the standard $6.99/month, Duolingo hasn’t capitalized on the demand of its paying users.

Reimagining Duolingo with Human Interaction and Real-Time Engagement

One way of tackling these challenges is to upgrade the user experience by embedding human interaction into existing Duolingo products. Leveraging RTE, Duolingo can dramatically enhance learning outcomes and unlock new commercial opportunities that fuel the next wave of revenue growth.

Provide a holistic learning experience
Duolingo can launch live-video, instructor-led lessons that complement the existing asynchronous learning content. Human tutors can browse the entire learning history of each student (preferably supported by AI) and provide personalized guidance to fill each student’s knowledge gaps. Language tutors can also tailor curriculum and systematically build knowledge through a series of live, in-app video training sessions that address questions students may have during the previous asynchronous lessons, thus taking the guesswork out of the learning process. This is especially important for users of Duolingo ABC—young kids who can improve their academic and behavioral skills with quality human teacher-child relationships. Adult learners can also benefit from understanding the similarities and differences of grammar patterns compared to their native language.
Supercharge student engagement
Duolingo can also build live audio or video chatrooms that offer an interactive way to practice speaking and listening skills in a supportive community. In a virtual chatroom, language learners can have an immersive learning experience by communicating with peers and native speakers in real-time. This learning activity offers an opportunity for students to leverage what they have learned on Duolingo, fostering a sense of competence while advancing their knowledge with exposure to real-life dialogue. A mixture of social and gamified learning activities like group competition, debate, and role playing can also boost student engagement, ignite their passion for language learning, and increase stickiness within Duolingo’s ecosystem.
Upsell product offerings that fully capture customer demand
Duolingo can offer real-time engagement as a premium service that increases average revenue per user (ARPU) while not compromising the freemium model that attracted a large user base. Live classes, and the interactive audio and video chatrooms mentioned above, are both higher-value features that can be priced higher than the current $6.99/month. From the perspective of value capture, Duolingo can capture more of the value being created today by further segmenting the 4% of their customer base who are paid subscribers. However, if they greatly increase the value they create, they will be able to further segment their customers and capture a portion of this new value.

Babbel, another leading language learning provider—and a major competitor of Duolingo—has already launched live classes that maximize speaking practice and provide a well-rounded language-learning experience including pronunciation, grammar, vocabulary, and cultural context. This premium language-learning experience is priced at $110-$290/month, depending on the number of classes students take—20 times the price of Babbel’s basic monthly subscription. Duolingo could consider adopting the same strategy to capture higher-end users and remain competitive in the space.

Collaborating with the Right Partner

While language learning companies must focus on providing the most engaging and impactful experience for their customers, it is important for them to partner with platform providers that have deep experience in real-time engagement and understand how to apply RTE to Education use cases.

Agora supports leading language-learning companies—including New Oriental, VIPKID, and Hallo—by providing a robust network that enables high-quality, low-latency, live interactive video/audio chat and livestreaming. We support use cases for 1:1 private sessions, small classrooms, lecture halls, online proctoring and more while enabling easy integration and rapid scalability.

At Agora, we strive to empower education providers with the tools and resources to build highly engaging online learning communities. Contact us to learn more about our online education solutions and student engagement tools.