Building for the future: upcoming changes to instructor business terms
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I still don't understand....Now I am receiving income via affiliate/ads and get 25%. Will I later still participate in these sales (and then receive 37%) or would I have to pay for ads/affiliate ads to participate in these sales in the first place??
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I am still trying to understand the new model but I don't think this favours instructors, but I could be wrong.
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@DiogoAlvesd487
- For the pilot, the plan is to test offering the existing Udemy for Business English collection to individual learners. We have a lot to test and learn here, so it's possible that this would change. But the collections should match, to start.Great question on how users would benefit. What we've seen from our current data is that subscription models help students build learning habits -- they consume more content and spend more unique days learning than in a transactional model. For people who are also learning a little bit in a lot of areas, a subscription offering may also be the difference between choosing Udemy and a different platform that gives them that broader access.
We'll be sharing more about the structure and goals of the pilot when it goes live in early April, so stay tuned.
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@ThomasBlees450
- You don't have to pay to be eligible for sales from Udemy ads and affiliates. There is no change there. The update in May will just mean that instead of receiving 25% of the net amount for ads/affiliate sales and 50% of the net amount for "organic" sales, you'll receive 37% of the net amount for all these sales.@RobinLouw
- Is there a specific question about the new model we could help address? Happy to help if I can.0 -
It’s time to leave the udemy platform.
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Very strategic, smart move team Udemy!!!
Having just run the figures, and what the difference in income would have been had you implemented this back in July last year - I see what you are doing! A great move to incentivise performing instructors who deliver well-received content. VERY smart indeed!!!!
Just to be clear, there are no other splits being made - only organic and ad revenue is being blended? Affiliate splits and UFB remain the same???
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Affiliate splits go to 37%. Also, don’t ignore the planned change to advertising. If you currently benefit from lots of paid ads to a course of yours, you can expect to lose that when they start ramping up ads to categories, instead of direct to individual courses.
if your course ranks in the first couple listed in your category, then maybe the new paid ad strategy helps you, even if they stop promoting your course specifically. The point is, don't ignore those changes.
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@Kain_Ramsay
- The affected channels are "organic" (all sales currently attributed at the 50% rate) and paid (ads/affiliates/external partners, all sales currently attributed at 25%).You're correct that Udemy for Business revenue share will not be affected.
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Let me sum it up for you all:
Sales from the Ad and Affiliate programs were occasionally being counted as organic sales (due to cookies expiring, or students from tv advertisements) thus costing Udemy that 25% they would have gotten otherwise.
So now they are planning on increasing their marketing affords on channels that will bring in organic sales (i.e. TV ads) even though these are paid channels, so now they want that extra revenue that they would have lost otherwise.
In other words, if this change to the instructors revenue share was not made and Udemy continued their new marketing efforts, you would have seen a lot more organic sales. But now since both the organic, ad and affiliate revenue shares are bundled up together you will see no change in your revenue, thus giving Udemy the difference.
Udemy screwing us little by little one again.
Don't be fooled.
This only benefits them.
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@Julian
Udemy is not screwing us! It does not ONLY benefit them. If they are correct that this will enable them to expand the business, it benefits us. I don't think you have been around long to have experienced the other series of changes that Udemy has made. Someone always screams "They're screwing us!" without understanding that they are growing the business and investing in the business.This change does not reduce our revenue. Those of us who have been here for a few years have watched their decision making, watched the business grow, and watched our own revenue grow. As I mentioned earlier, my UFB revenue is up 400% since they reduce our cut from 50 to 25% so they could afford to invest in the expansion of the business. They have proven competent.
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So on the one hand, logically speaking, they wouldn't be making this change if it had no impact at all. So clearly there is a future growth potential that they are going after that they can't currently go after.
And they're trying to be as fair as possible to everyone based on "today's revenue share". To the best of their ability, this is revenue neutral today.
People opting out of ads/affiliates are affected the most, sure. That was a bit of a loophole in the revenue terms, and now the loophole is closed.
I'm excited for the next 10 years on Udemy. Grow the platform! Capture market share! Be front and center in the world of online learning. And take me with you!
Either adapt or be left behind.
I want Udemy to innovate faster. I want them to develop their learning platform for instructors and students faster. It's been way too long stuck in the old video/quiz model. Faster, faster.
And if they need to tweak the revenue settings to get there, let's go.
Faster Udemy! Leave the laggards behind.
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Hello, @LawrenceMMiller
I have seen you around this forum, and even though i do not know you, I have come to respect your opinion.
However i will politely disagree with you on this because there is nothing stopping Udemy from growing and investing in the business with the current revenue model as it is (i mean, the revenue share is already ridiculously low).
At this point they are just greedy.
You are right, this wont decrease our revenue, but that is not the issue. The issue is that we will not see an increase in our revenue from the new marketing efforts.
But Udemy will.
That doesn't sit right with me.
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There are literally hundreds of thousands of courses on Udemy, and not all will be promoted through ads even though they're all eligible in theory.
Udemy justifies this 13% additional retention with ad investment, but this investment was not asked for, because it will not benefit all instructors. One thing is eligibility, other is actual investment. So you have a 13% decrease in organic revenue that affects all instructors, and 12% increase through ad revenue that affects only some instructors.
How can someone say that this is fairer?
This is not "more or less the same", it's just even more control over the way you explore your platform, directing ads at courses that already have traction. To put it simply, those who already sell, will maintain the trend, those who do not, even if they sell, will receive less organic revenue for it.
50% was already a heavy blow, 63% is a, certain, heavier blow to all of us. To some of us a balance will potentially be reached by the (ever more fragile) ad marketing. To a lot of us, no balance will be reached.
I find it morally dubious even to charge everyone more than 50% upfront, justifying with a faible investment that will not even occur to everyone.
That's a pity.
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I ran the numbers. I will be making more $. Some people drown in a shallow pool instead of just standing up... the rest of us celebrate being on vacation in a pool.
Udemy next time announce on a Friday so I do not get drawn to the drama on a Tuesday. I've got work to do.
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Debra... I ran the numbers as well. All things being equal, I would see a slight bump; however....
Do not discount the fact that not everything will be equal. More specifically, if you are currently benefiting from Udemy’s paid ads sending traffic (and sales) directly to any of your courses, that’s likely going to fall off dramatically when they stop promoting your specific courses, and instead, begin running those paid ads to category pages.
Your mileage may vary, but just keep in mind that there are gonna be significant changes to the paid ads that they run. This may, or may not, affect your revenue.
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Not too worried about this, for me it will increase my earnings by 1-2%, it will also allow Udemy to market where they can't track it more.
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Many courses are not very good, Udemy base their marketing on how a course performs on its own.
They may run a few ads to see how it performs, if it does not convert why would they keep throwing money at a bad product?
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@Thor1
the current policy doesn't require them to throw money at any product, good or bad. They automatically profit from the product's existence on the platform.0 -
@Anonymous
Significant is a strong word. I have no worry.It is still a better cut than what I spend on my own Google Ads monthly to drive traffic to my personal sites.
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@debra1111
that debate of 'us' smart ones against 'other's dumb ones is not very noble. Not everyone complaining is sleeping. But hey, enjoy the pool while it's refreshing
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@debra1111
... well, I would consider a strategy change that results in courses no longer being promoted individually to be pretty significant - at least to anyone who is currently benefiting from such advertising - which was my point.like I said, YMMV.
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I do not think I explained it too well on my pervious comment so I will give it another go:
Here is the deal:
1) Sales from the Ad and Affiliate programs are occasionally being counted as organic sales (due to cookies expiring, etc...)
2) Udemy is planning on increasing their marketing efforts on channels that can only bring in organic sales (i.e. TV ads) and cannot be tracked/counted as Ad/affiliate sales.
Now, if you calculate the revenue percentage from all your sales (organic, ad and affiliate) you will see that it equals 37%.
Do you see where i am going with this?
With the new marketing efforts, the percentage of organic sales will increase. Meaning that if you were to calculate that percentage (37%) when these marketing efforts start, you would find out that it is much higher (depending on how effective those marketing efforts are) , because organic sales account for a higher percentage (50%).
So this could have been lets say a hypothetical 45%.
But Udemy will only be giving you 37% instead of the hypothetical 45% that they would have given you with the current revenue share.
By changing the revenue share now, Udemy, eventually gets to pocket that difference (45 - 37 = 8% hypothetically).
Moral of the story:
This only benefits them and they are trying to make it seem like it doesn't.
If you want my recommendation, start working on your own website/business so that you are not bound to the decisions of anybody.
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So if I would like to make decent money I must promote my own courses, which also means that your platform... What a business opportunity for you.
You state that you'll spend more on an advertisement. Yes, so you'll generate more traffic to the top 5% while you're taking 13% from the rest of the instructors.
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Fair point @debra1111
! You are in a great niche and so the revenue will certainly be on the higher side.. And numbers don't lie... I ran them too... So far historical numbers suggest an increase of 2%-4% with this new change (like @Thor
mentioned).. Positively looking forward for this change... Wooohoooo!
@Anonymous
is predicting a future that may never be true... but he did say that his numbers were also positive2 -
@Rahul Iyer
... It's not a prediction. The actual announcement indicates as much. I feel like there are many folks who didn't actually read the announcements (or maybe don't understand them). There is a ton of focus on the instructor share, but very little attention is being paid to the very significant plan to change how paid ads are run....
Right from the announcement:
"The old model disproportionately encouraged investment in short-term, conversion-driven marketing. We want to invest in promising new channels that drive long-term value but don’t necessarily result in immediate sales, such as TV advertising or category-level promotions."3 -
@NunoFonseca
Please do not write things I did not say. I do not think anybody here is dumb or sleeping. It is an American phrase of stressing out.1 -
@SandorSzekeres
I don't think so, I have never spent any money on promoting my Udemy courses, I have spent time on building my own tribe on Facebook/Discord.
Now mostly my students do my advertising by recommending me and I use my promos twice a month.1 -
Observation: How people react to this change is almost a psychological test: high trust versus low trust. Looking at the same facts, some assume Udemy is working in our interest and some assume Udemy is trying to screw us.
Part of this is cultural and part of it is simply our experience in business, and in particular the business of creating and selling intellectual property. Some people think that Udemy taking 50% and now 37% is ripping us off.
In all intellectual property business there are essentially two sides: the creative side and the marketing/distribution side. Some think, if I sold and marketed it myself I could make 100% of the revenue (not really because there are always costs). This is about like saying if I write a book and print it myself, I can stand on the corner and sell it and make 100%. True. But, 100% of what? Book publishing is a volume game. High volume you make money, low volume you lose money.When you sign a contract with a publisher, as an author, do you know what percent of the sales you are agreeing to: (footnote - I have published eleven books) the answer is 15-20% of the proceeds to the publisher, which is 40% off the selling price (the store gets the 40%) so the author ends up with closer to 10-15%. Of course, both the publisher and store are going to promote books that are most likely to sell and that means authors who have previous success, a following, and on topics that are popular. This means that the majority of authors will make no money on their book, even though it may be brilliant and they may have worked on it for years. If you look at the music business or the art world, you will find very similar dynamics.
So, my perspective when I view this change is to think about the affect on volume. I am happy to take a reduction in % if it results in an equal or greater increase in volume. That is what happened with the UFB reduction a few years ago. Let's hope it happens again.
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@Thor
I didn't mean spending money on ads. I meant YT channel, blog posts, promotional emails, community. But I guess you also get a decent amount from Udemy discovery, search and some from Affiliate.Here are the enrollments by channel for eg.: Cybersecurity:
So if I understand the upcoming changes correctly the money from Udemy discovery and search and some of the outside sources will decrease by 13%. BUT income from ads and affiliates will increase by 13%.
So instructors in Cybersecurity will make 13% more on 3.7% and 13% less on around 95% of their income.
Correct me if I'm wrong.
You know it's funny because we can't really do anything. You can play by the rules defined by Udemy or you can leave the platform.
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Is the affiliate system going away or is it changing? @KatieBent
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