Building for the future: upcoming changes to instructor business terms

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  • janoschhrm
    janoschhrm Posts: 24 trailblazer rank

    Just out of interest: Is there the possibility that the subscription pilot, if ever rolled out in all markets, will be available for courses without the need for exclusivity?

    I think for Udemy & all of the instructors the idea of creating a subscription model to add to the normal direct sales model would be highly beneficial. I'd just like it to be open for courses that are published on other platforms as well.

    Many instructors rely not only on Udemy, but on other course platforms, so Udemy would see a lot more instructors opting into a subscription program that doesn't require exclusivity...

  • MarkTimberl006
    MarkTimberl006 Posts: 275 mentor rank

    So we agree then @LawrenceMMiller
    Udemy should maintain a level playing field for everyone to potentially succeed in and that success should be driven by the market...?

    Anyway, happy to discuss this on another thread if you want to argue that the above is not necessarily true, don't want to kidnap this thread with this subject.

  • NicolásBonj324
    NicolásBonj324 Posts: 9 researcher rank

    I just did the numbers and my income would increase 5% with this change.

    The argument seems very reasonable to me and I trust that this will not slow things down for the instructors.

    Until they show me otherwise, I will continue to trust.

    At the moment the effort-return relationship on the platform is very positive.

  • JohnBura
    JohnBura Posts: 411 mentor rank

    This is complete speculation but I do suspect that there are lots of heated discussions between investors and core members of the Udemy team/founders. The core team wants to make sure teachers can make money and continue producing while the investors just want as much money as possible. You can sort of seeing this with the policies and language they use.

    Either way, the biggest problem facing eLearning right now is the lack of scalability on the course side. Udemy should be more like the app store and steam. I can tell you from my experience, it's much easier to produce courses with a team. Also, my reviews show that I am doing a better job with this format than just me and that really makes sense because of the specialization of tasks.

    Udemy's competitors do this (have multiple people working on the content) and Udemy's answer is to crowdsource the teachers on the marketplace and then sell them to a subscription.

    The end goal will be individual subscriptions. Again, you can see this tug of war between the core Udemy team and investors. If the investors ran the show, we would already be in a subscription site like Skillshare. All roads lead to that conclusion.

  • Marcello Pattarin
    Marcello Pattarin Posts: 4 researcher rank

    Hello.

    37% is too little, I understand the marketing needs, but I have moved away from platforms that already gave 40% (I do not mention names)
    We will see how the situation evolves, but I predict that if the teachers' entry starts to drop, other platforms will rise to the horizon and you will lose your leadership.
    I would have expected 55% as there have been good sales this year ... a reward for your teachers.
    I am not involved in marketing ... but the programs I use to teach are expensive and original, I do not use either student licenses or cracked licenses ... I hope to be able to continue teaching in accordance with the rules of law.
    my best regards

    Marcello Pattarin.

  • KatieBent
    KatieBent Posts: 137 mentor rank

    HI all,

    Lots to dig into here! Going to respond first to two specific questions from above, then address some of the broader points after:

    @janoschhrm
    , you asked "Is there the possibility that the subscription pilot, if ever rolled out in all markets, will be available for courses without the need for exclusivity? "

    We're just starting this pilot and have a lot to learn, so I can't make definitive statements about the exact long-term policies. That said, we don't have plans to change exclusivity requirements for Udemy for Business, and for the individual learner pilot the goal is to maintain consistency between the collections (from the student perspective) and the policies (from the instructor perspective). So for now, no -- but we'll be evaluating policies as well as performance as we manage the pilot.

    @TaniaMagdal781
    and @MarkTimberl006
    , you both asked what we meant when we wrote "On May 3, the Marketing Boost Program will be retired, and we’ll open up the opportunity for direct paid advertising to all courses on Udemy."

    Under today's terms, Udemy can't run paid, off-platform marketing for courses whose creators are opted out of the Marketing Boost. So, there are courses that affiliates might like to promote, or for which our data suggests certain types of paid ads would perform well, but we're not doing those things. Moving forward, all courses will be eligible for these types of promotions (so, treated as courses opted in to the Marketing Boost program today, but with a 37% revenue share rather than 25%).

    Mark, I know you also had questions about how courses are selected for different types of promotions. This ties in to some of the broader questions others are raising about Udemy's marketing strategies, so I'll respond separately to that -- wanted to get this more straightforward answer out first.

  • ScottDuffy
    ScottDuffy Posts: 809 rolemodel rank

    @Marcello Pattarin
    most instructors are seeing almost no change to revenue when you do the math on your last few months' revenues. So do the math on your own numbers to see.

    So nothing is really changing today. In some months, when Udemy is running $1 Billion worth of ads and traffic explodes, maybe we would have earned more under the old model. I'm still expecting my revenue to be much higher in 6-12 months than it is today.

  • MarkTimberl006
    MarkTimberl006 Posts: 275 mentor rank

    Thank you @KatieBent
    , I wondered if Udemy were going to allow an advertising feature where instructors can promote their own course with ads, but this makes sense now.

  • Kain_Ramsay
    Kain_Ramsay Posts: 61 specialist rank

    @MarkTimberl006
    , @LawrenceMMiller
    ,

    I understand where you’re both coming from, and can see pros and cons to your second point Mark.

    Lawrence, “Marketing is not an equal opportunity business.” - this is brilliant!!

    We know that those who were fortunate enough to get established in Udemy in the early days undoubtedly have the history and track record (within established courses) to quality for ad spend - as some courses are already proven to be sellers.

    The way I see things, Udemy backing courses is kinda like punters placing bets on horses (and I’ve certainly enjoyed a flutter over the years).

    If I intent to back a horse, I’ll be looking at a number of statistics so to make a well informed decision about where to direct my gamble.

    In the same way, creating a level playing field where all courses attract the same level of ad spend is ‘kinda like’ placing odds of 50/50 onto every horse that ever races in any race, ever again.

    In any fair market, it’s great to see excellent products and services grow in popularity over time - and it’s also good to see garbage sink - this is why we have excellent and established brands in every aspect of modern market.

    Is it difficult for newcomers to ‘get ahead’ in today’s current marketplace?

    Yes, of course is it - but I’m not sure about you guys, I took me a few years (through blood, sweat and tears) to get established, not just on Udemy, but in business (and life) in general.

    I definitely believe in fair markets, I also believe in equality, while also believing in the notion that anything good in life is worth working hard and enduring for. Everyone who’s involved in eLearning today has the same opportunity - to adapt to and evolve with the times.

    Trust me when I say that I’m ALSO preaching to myself here 😉👍

    Hope you’re both in good health btw!

  • rasu84
    rasu84 Posts: 91 specialist rank

    I have run some sample scenario analysis and instructors who have subscribed to the promotions should benefit from the changes under most scenarios (unless your organic sales far outweigh Affiliate and Ad program. Refer below table

    Untitled.png

    In the above example, while the share of earning from organic sales is significantly more than the other channels combined, the overall impact in still positive. This problem can actually be solved using simple algebra and it turns out that if your organic earnings tend to be less than or equal to 1.85 times the earnings from Ad Program and Affiliate program, you will be fine.

    Please do let me know if the above analysis is wrong and that I have completely misinterpreted the changes.

  • LawrenceMMiller
    LawrenceMMiller Posts: 2,228 rolemodel rank

    @icarolavrador
    I think your analysis is a good one. For the record, neither I or my courses have ever been featured in an ad and my closest competitor in my category is always featured as recommended in the middle of the page when you search my topic. He also never participates in this community.

    Computing my numbers I will initially lose money. However... and trusting that the net effect will be an increase in volume that will exceed the immediate lose on a percentage basis. Hopefully, more traffic through the store will result in more sales for most of us.

  • Emanoel
    Emanoel Posts: 5 researcher rank

    .

  • JonAvis865
    JonAvis865 Posts: 39 storyteller rank

    Hi @Abbie
    @KatieBent

    Is there a way to differentiate between individual students using the subscription model and students enrolling through UfB?

    In the courses student list will they be labelled as UfB or is there a different label for individual subscription students?

    Is the revenue from these students included in the UfB revenue numbers? or they are separated?

    Thanks.

  • KateAlison017
    KateAlison017 Posts: 6 researcher rank

    The question to Udemy:

    If your courses are not included in the current business collection (even though I have opted for it), they will not be automatically included in person-based subscriptions, right? This is somewhat exclusive, could you indicate how could the courses be included in the subscription plans?

  • Paul-N
    Paul-N Posts: 140 specialist rank

    Hi @Abbie
    @KatieBent

    When you talk about promoting CATEGORY-LEVEL instead, do you mean Category Pages as they are currently shown and organised?

    I'm asking this because I noticed since a very long time that a lot of category pages don't make sense. There are always half of the courses on the first page having <3.5 rating, sometimes even less than 3.0. This is just one problem with category pages but I've seen others.</p>

    Is Udemy going to promote those categories with poorly rated courses on the first page? Or will the rating finally be taken into account and courses actually sorted by quality?

    Sorry if this has already been answered.

    Thank you

  • KatieBent
    KatieBent Posts: 137 mentor rank

    Hi @KateAlison017
    -- Only courses currently in the English Udemy for Business collection will be included in the initial pilot. However, if you're opted into the Udemy for Business program, your course will be considered for inclusion in the collection moving forward. So let's say that today, you're opted in, but you don't yet have a course that's been included. In the future, your course could be added to one or both collections. For now, the plan is to keep them consistent.

    In terms of what content is included, the curation team works to ensure the Udemy for Business collection includes Udemy's most engaging, well-received content in professional skills. To maximize the chances that your content is included, your course should be highly rated, recently and/or frequently updated, and focused on a topic relevant for professional learners. You can read more here.

    @Paul-N
    -- When the announcement mentions "category-level" promotions along with Brand and TV advertising, this could refer to any promotion where prospective students are directed to a group of courses rather than a single course landing page. It doesn't necessarily mean the category landing pages as they exist today. The idea is to be able to market more holistically, directing prospective students to the place that's right for them at that moment in time, whether that's an introduction to the way they can use Udemy to meet their goals, a group of courses to give them a taste of the breadth of content on the platform, or an individual course they can purchase on the spot. Does that make sense?

  • Pavel-N2
    Pavel-N2 Posts: 5 researcher rank

    @KatieBent
    Absolutely! Thank you

  • GuilhermeMP
    GuilhermeMP Posts: 390 mentor rank

    @KatieBent
    Udemy won't change to a 100% subscription system anytime soon, right? Or will it?

  • KatieBent
    KatieBent Posts: 137 mentor rank

    @JonAvis865
    , my apologies, I missed your question.

    We'll be providing more information about the individual learner pilot when it first becomes available to select students in April. But to answer the revenue question: when instructor revenue reporting for the subscription first begins, earnings from individual subscribers will not be lumped in with your Udemy for Business earnings. Since these will be discrete calculations -- monthly minutes consumed and subscription revenue in separate "pools" for business and individual learners -- they will appear separately.

  • KatieBent
    KatieBent Posts: 137 mentor rank

    @GuilhermeMP
    -- We believe that a subscription model will complement the transactional model. Based on previous testing and data, offering students multiple options (individual purchase or subscription to a collection) stands to create more value for instructors and the platform. We also believe we can better help some students meet their learning goals with this model.

    We'll approach this new initiative with careful testing and analysis, and we'll share more information as the pilot progresses.

  • Parker
    Parker Posts: 122 specialist rank

    Hi @KatieBent
    , Can you please explain why the lack of ads this month? No St. Patrick Day sale and only 5 days of sales in 19 days. That is a LOT lower than in the past. For example, this past January there seemed to be a new sale for 3-4 days every week. February was less and now, practically nothing. "Paid" has been plummeting for the past year for my best-selling course...Screen Shot 2021-03-19 at 2.55.39 PM.png

    Discovery and search are showing the same pattern. Sure, COVID may have played a role for April/May, but the rest of the year was on average with past years.

    Is the new marketing program already being tested, is this why? Are sales going to go back to normal soon? Or is this the new norm?

  • GuilhermeMP
    GuilhermeMP Posts: 390 mentor rank

    @KatieBent
    nice, thank you for the answer

  • derekm1215
    derekm1215 Posts: 18 trailblazer rank

    This doesn't seem to take into account the fact that supporting students costs money. By paying us even less, netting out to probably below a dollar for students from some countries, this doesn't make supporting them worth the money they net. I'd rather make more money per student and have less of a support burden then as many students as possible.

    With every student I gain, I lose more time and each student's value becomes less and less. This is great for Udemy, but not for instructors. There is literally no way you can slice this to make it seem worth it unless Udemy starts absorbing more of the store fees and raising the prices in certain countries.

    For already successful instructors who aren't trying to make a name for themselves and don't have bills piling up while trying to become successful, sure, it's great. But for those of us bootstrapping this career, I don't see it working well.

  • JulianJenki396
    JulianJenki396 Posts: 360 visionary rank

    I would like to personally thank Udemy and @Abbie
    @KatieBent
    for the work they do and the gift they give us to scale our teachings. I have now been here for 2 and a half years and there have been many changes and yes I haven't always agreed with them, but I trust them to make data driven business decisions that will have a long term beneficial effect on the business. For me a slight reduction in margin for a potential increase in volume makes sense. Good luck with it and I am sure that Udemy will grow again from strenght to strenght and I love the ability to play my part x

  • EveWilliams
    EveWilliams Posts: 154 specialist rank

    @Abbie
    Out of interest, does Udemy have a policy for maintaining good relationships with instructors? Udemy makes money based on our intellectual property and seems to be able to change the terms we signed up to with no ostensible consultation. Top instructors may earn more but with changes to advertising, it seems everyone else will lose out on money we use to pay our rent and feed our families. I feel that changes like this damage trust.

    Many are off doing complex calculations, but it's actually impossible to plan for the potential change in earnings (which most people need to do!) because it's impossible to predict how advertising will impact traffic. I have a best selling course in a popular niche which should be fine but I imagine some of my smaller courses will be hit badly.

  • JohnBura
    JohnBura Posts: 411 mentor rank

    I just ran my numbers: 25% lower.

    But... I already put a down payment on a Lambo...

  • KatieBent
    KatieBent Posts: 137 mentor rank

    Hi all,

    Thanks for the continued questions. I'll try to address several inquiries together here.

    @Parker
    : I believe you created a separate thread regarding the trends you're sharing, and you'll get a more detailed response there. In general, the trends you're describing aren't universal -- we've continued to see growth, and continued to see sales driven by paid channels rise with Udemy's increased investment in growth.

    @derekm1215
    : We definitely keep instructor costs in mind whenever we make changes to anything that would affect your return on investment. This includes pricing, promotions, revenue share, Q&A features, support changes, and more.

    Overall, we don't expect that this change will meaningfully alter the average share instructors take home in 2021. Based on historical data and trends, we expect that in 2021 this system will result in the same division of revenue between Udemy and most instructors, and between Udemy and instructors overall.

    To address a point both you and @EveWilliams
    made, it's not the case that all "big" instructors or courses will see an upside, while all "smaller" instructors or courses will see a reduction. Improvements to Udemy's marketing systems have resulted in a much greater number of courses getting sales from paid channels than would have been the case a few years ago. It's not just the top 1% or 10% of courses that get paid traffic, and all courses have the potential to benefit from the increased audience brought in by paid channels (today, many do). If we want to continue these investments (which we do! we want to keep growing for and with instructors), revenue share can't rest on real-time, 1:1 attribution.

    @EveWilliams
    , to your larger point about trust:

    We recognize that changes like this can be difficult to parse and to plan around. There are two ways we can earn trust when we make these kinds of changes: by communicating clearly, and by delivering results. Our goal with the new revenue share model is to continue to provide instructors with opportunities to monetize their expertise, which means continuing to invest in growth. We hope and expect that as time goes on, instructors will benefit from that continued investment.

    No change, whether it's a new policy, a new feature or a new growth strategy, will affect every instructor the same way. In a marketplace we can't ever guarantee that every instructor will see the same level of return. Our focus is on continuing to grow, continuing to adapt to changes in the world and in the online education space, and continuing to reward instructors who deliver the content and the results students are looking for.

  • professor Arain habib Allah prohibited h
    professor Arain habib Allah prohibited h Posts: 8 researcher rank

    so cool but did you put some aspect

  • flagonc
    flagonc Posts: 6 researcher rank

    I see the change as very negative. For any teacher with opt-out in paid promotions selected, it will mean a decrease in revenue of 25%.

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