The e-learning market is growing fast, but prices are falling, according to new research.

Open Source solutions like Moodle, competition and inexpensive hosted services are among the factors cited for falling prices in the report from Ambient Insight, which focuses on the US market.

Ambient Insight says the e-learning industry has begun to grow again after several years of stagnation and is now worth $10 billion.

The report, The US Market for Self-paced e-Learning Products and Services: 2006-2011 Forecast and Analysis, predicts that the market for e-learning will grow by 31% by 2011.

The revenues for outsourced services are said to be growing by 80%. There is a strong demand for content targeted to specific sectors, but revenues for installed technology are flat primarily due to factors such as price pressure, rather than lack of market demand.

Sam Adkins, Chief Research Officer at Ambient Insight commented, “It is a new industry and the old rules do not apply.”

He wrote: “Pricing pressures, competition, Open Source solutions like Moodle, server appliances with pre-installed content, and inexpensive hosted services are driving prices down very fast. This is great news for customers.”