Why does Udemy keep the majority of your revenue?

I understand that Udemy has to make money somehow, but just for promoting your course they take a 63% revenue share per sale that comes through promotions? That's ridiculous. Udemy should be giving a majority of the course sales revenue to the people who made the courses.

Comments

  • AHardin
    AHardin Posts: 575 visionary rank

    You're not factoring in everything that Udemy does, and how much your net revenues would be if you ran your own school.

    Udemy does much more than just promoting an instructor's course. They provide the platform and marketplace with an astronomical amount of traffic, ads/sales/promotions, technical support, payment processing, taxes, etc. all which cost money.

    If you launch your own school on, let's say Teachable or Thinkific, then those are all things you have to handle yourself. Since the average price for a course on Udemy when they run a sale is around $10 USD, we can use that as a use case and factor in expenses on an instructor's own online school:

    • Credit Card Processing Fees: 6% or $0.60
    • Online School Platform Monthly Costs: 5 to 10% of Each Sale or $0.50 to $1
    • Google or Facebook Ads PPC: 10 - 40% of Each Sale or $1 to $4
    • Cost of Your Time for Tech Support & School Admin: Varies Per School (based on how you value your time), let's say 10% or $1 per sale
    • Net Revenue: $3.40 to $6.90, or 34 to 69% of course sales price. So if we split the difference, the average would be around 51.5% of each sale.

    So, if you ran your own school (and I didn't include all the minute costs), you wouldn't even keep a majority of the course sales revenue as they're eaten up by operating costs and expenses.

  • I understand totally AlexCollin149. I have one course at top price tier, $199. I received $1.93 revenue share for selling 1 course as part of promotions. The argument regarding Udemy's expenses is null and void. Udemy would not exist without the course content creators. The percentage is outrageous in instances like this. Also, there is not a way to participate in promotions with a specific course, and not participate with another course. If you opt-in all your courses become part of the promotion where you get pennies on the dollar. Course creators should be able to choose which of their courses participate and leave out the ones they do not want in the bargain promotions. Udemy publicly states how great it is for content creators here. I disagree. I believe they are disrespectful in handing back what I described above. I think they can do better, but unless they hear from the content creators it will remain the same.

  • PhillipBurton
    PhillipBurton Posts: 405 visionary rank

    Just a reminder that Udemy has not made a profit since they started going.

    If you want a platform that you can host on, they need to charge sufficiently to cover their costs.

    Their loss in 2022Q4 was $22.8 million - see https://investors.udemy.com/news-releases/news-release-details/udemy-reports-fourth-quarter-and-full-year-2022-results

    Phillip

  • Well, I have made courses before that are self hosted and I have used other self hosted services that don't do any promotion for you.

    The amount of time, work and energy I used to spend on advertising was crazy. Add to that managing students and sometimes follow up emails and such. It really does take away from the time I had to make tutorials.

    Right now I don't think about that. I think Udemy marketing and active student base makes them worth their cut.

  • This is a very good post especially pointing out what other creative people are being paid when they publish something. I had a discussion at some point with a friend who was a publisher and I asked him what I would get if he promoted my book and the answer was less than 10%. I was shocked but that's how it works.

  • Also, from my understanding Udemy protects instructor’s content by encoding videos, and has a team which manages a Piracy Detection Program. I see this protection as a great benefit and is well worth having

    https://support.udemy.com/hc/en-us/articles/229232227-Instructors-How-Does-Udemy-Protect-Your-Content

    https://support.udemy.com/hc/en-us/articles/229604108-What-Should-I-do-if-I-Find-a-Course-on-a-Pirate-Site