Building for the future: upcoming changes to instructor business terms

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Comments

  • 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??

  • RobinLouw
    RobinLouw Posts: 11 traveler rank

    I am still trying to understand the new model but I don't think this favours instructors, but I could be wrong.

  • KatieBent
    KatieBent Posts: 137 mentor rank

    @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.

  • KatieBent
    KatieBent Posts: 137 mentor rank

    @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.

  • It’s time to leave the udemy platform.

  • 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???

  • 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.

  • KatieBent
    KatieBent Posts: 137 mentor rank

    @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.

  • Julian
    Julian Posts: 5 researcher rank

    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.

  • Julian
    Julian Posts: 5 researcher rank

    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.

  • 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.

  • Thor
    Thor Posts: 2,299 rolemodel rank

    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.

  • Thor
    Thor Posts: 2,299 rolemodel rank

    @NunoFonseca

    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?

  • @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.

  • debra1111
    debra1111 Posts: 229 specialist rank

    @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.

    Screen Shot 2021-03-16 at 12.31.36 PM.png

  • @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 :)

  • @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.

  • Julian
    Julian Posts: 5 researcher rank

    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.

  • 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.

  • Rahul Iyer
    Rahul Iyer Posts: 393 visionary rank

    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 positive :)

  • @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."

  • debra1111
    debra1111 Posts: 229 specialist rank

    @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.

  • Thor
    Thor Posts: 2,299 rolemodel rank

    @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.


  • 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.

  • @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:

    2021-03-16 22_09_00-Online Courses - Anytime, Anywhere _ Udemy — Mozilla Firefox.png

    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.

  • JohnBura
    JohnBura Posts: 411 mentor rank

    Is the affiliate system going away or is it changing? @KatieBent