Building for the future: upcoming changes to instructor business terms

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Building for the future: upcoming changes to instructor business terms

Abbie
Community Moderator
Community Moderator

Hi all,

 

As we look to continue to grow the Udemy platform in 2021 and beyond, we're making updates to the Instructor Terms and Promotions Policy. This includes an expansion of the terms of the Udemy for Business subscription program in April, and a simplified marketplace revenue share model in May.

 

It's important to note that we don't expect any of these changes to have a pronounced impact on instructors' business in the short term. In the long term, they'll enable Udemy to keep growing the potential audience for your content, and growing the potential of your businesses with it.

 

We encourage you to read the full update in the Teaching Center, or to peruse the upcoming Terms or Promotions Policy.

 

If you have questions about these updates or the strategy behind them, please feel free to ask them below.

156 Comments
Kiran
Level 3
Level 3

37% good. my lucky number 🙂

SeanFowler063
Level 3
Level 3

so blended 37% does that mean my organic sales go down to keeping 37% and my affiliate sales go up to 37%? and is it just affiliate or is it also ads, and how is it better. for us to be "blended" out of curiosity

Alfa-eLearning
Level 3
Level 3

Instructors who are not using affiliate and ads, for them its 37% instead of 50%. By that 13% is not small amount.

 

"We designed this change to be as seamless as possible for instructors. The new share is derived from the actual historical average share for all paid and organic sales."

 

Does it mean instructors are forced to opt in for affiliates and ads ?

AshishR
Level 3
Level 3

So instructors who had opted out of ad and affiliate program, would be at loss now because earlier they were getting 50% of every sale except promo?

 

Does that mean that we all will get 37% for all organic sales? so that's a loss of 26% of net earning for me.

 

Does it also mean that we will get 37% in UFB ?

Alfa-eLearning
Level 3
Level 3

@AshishR seems like its for marketplace only.

davisjones
Level 2
Level 2

"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."

 

Does this mean that Udemy is going to start offering paid ads from instructors to promote their courses on the platform?


KatieBent
Community Manager
Community Manager

Hi @SeanFowler063 , @Alfa-eLearning , @AshishR ,

 

The 37% will be the new universal rate for transactional sales, regardless of previous program participation. The Udemy for Business rate will not be affected.

 

For instructors who were previously opted out of the Marketing Boost program, this does mean that the minimum effective rate will be lower. However, it also means that your courses will become eligible for paid promotion. 

 

The "blended" rate helps Udemy continue the marketing investments that have grown the platform for many years. We want to continue to grow with instructors, which means continue to invest heavily in marketing. This isn't possible if paid marketing efforts are attributed as "Organic" sales, whether that's because of tracking challenges caused by cookie deprecation or new non-digital campaigns like TV or print advertising.

 

The blended rate should also make your revenue a little more predictable -- during big sales like Black Friday, when many instructors usually see their rate go down as ad and affiliate sales spike, you should see a more consistent benefit.

AshishR
Level 3
Level 3

Already the sale price was pretty low and on the top of that heavy taxes were introduced. Now our portion reduced.

Ultimately for a sale from India at 360 Rs i.e. 4.96 USD in marketplace will get 1.5 USD post 18% Tax and if this sale comes from Apple or Android then Instructor will get 1.053 USD.

 

It is not very good.  Udemy was always getting 50% in any case, now will get 63%.

Alfa-eLearning
Level 3
Level 3

@KatieBent I understand that all Udemy courses will get eligible for paid promotion. But instructors who opted out of affiliate and ads had some reason right ? That's why they opted out from promotions made by affiliate and Udemy ads.

KatieBent
Community Manager
Community Manager

@davisjones -- No, apologies if that language was unclear. 

 

Under the current terms, courses opted out of the Marketing Boost program are not directly promoted by Udemy ads or affiliates. Under the new terms, all course will be eligible to be promoted via these channels. Like today, a course will be more likely to be promoted by Udemy ads, affiliates, or partners if it's on a high-demand topic and has strong social proof.

Wolf2k21
Level 3
Level 3

@Abbie @KatieBent 

Just to clarify, ads will go to 37%, as will affiliate, correct?

AshishR
Level 3
Level 3

@KatieBent One more point, if a student clicks on your Ad and then purchases my course using my coupon, will that be 97% or 37%?

 

Since I had opted out of Ad, I was benefitted in my own promotion sales even if a student had previously clicked on Ad link within the cookie duration.

 

Cookie based system is gone?

Wolf2k21
Level 3
Level 3

Before you freak out, do the math.  I just ran my sales data from last month. Using the new calculations, and based on last month's data, I would actually see a "slight" increase in revenue.

KatieBent
Community Manager
Community Manager

@Wolf2k21 - Correct. All sales not driven by instructor promotions will go to 37%.

 

@AshishR - In the case you presented, you would still receive credit. You'd actually receive credit today too -- if a student uses an instructor coupon, or if a student has clicked on an instructor referral link within the last 24 hours, you will receive credit for driving that sale. That won't change with this update.

Wolf2k21
Level 3
Level 3

@Abbie @KatieBent 

Are all courses going to be included in the personal subscription? Or are we gonna tilt the field?

AshishR
Level 3
Level 3

Last month, I got 2000 dollars organic, so it will reduce to 1480$. Loss of 520 dollars. 

I am not sure if I will be benefitted with Udemy Ad or affiliate because not all courses are selected for marketing.

It will be no-loss to me if my courses get picked up for marketing boost in new system.

 

I have opted out of Ad and Affiliate, currently.

KatieBent
Community Manager
Community Manager

@Wolf2k21  - The pilot extends the current Udemy for Business English collection to individual learners, so only content currently in that collection will be included. As we test and learn more, it's possible we'll change what content is offered (and communicate accordingly).

AndreiNeagoie
Level 2
Level 2

To sum it all up:
- 97% if students buy course with your coupon/referral code.
- 37% if students don't buy the course through your code. 

The above increase Udemy's revenue and thus more money for marketing (by definition cumulative instructor revenue will go down). Correct me if I am wrong @KatieBent .


Wolf2k21
Level 3
Level 3

@KatieBent Ok, so current UfB courses WILL BE INCLUDED in the personal subscription? or WILL BE ELIGIBLE? I've learned to be very specific in my questions here.

From the announcement:

"So, if you’re opted into Udemy for Business when the pilot launches in April, your content will automatically be considered for inclusion."

KatieBent
Community Manager
Community Manager

@AshishR  - I hear you that it's hard to predict the impact if you haven't historically participated in the Marketing Boost program. While this is a small minority of current instructors, we know any change to the revenue share model can be nerve-wracking.

 

If it helps at all, every month many thousands of courses are promoted via Udemy ads and affiliates. If your course is already getting a strong response from Organic students, that's an encouraging sign that it might resonate with new students from paid channels as well. Also, continued investments in growing the platform do mean more "organic" students who will continue to discover your courses through the current routes. The goal truly is mutual, sustained growth.

KarolyNyisztor
Level 3
Level 3

13% less. That made my day!

AshishR
Level 3
Level 3

@KatieBent Rich people like me are always in "minority" lol. I hope new system brings more sales.

 

Also, new Udemy Subscription plan will cover all existing UFB courses for pilot? and %ge will 25%? and it will be shown as separate section like UFB?

Alfa-eLearning
Level 3
Level 3

On 6th May 2020, I opted out from Udemy ads and affiliates and it has increased total revenue and revenue per student. Earlier I was opted in from 2014.

 

Now on 3rd May 2021, I will automatically opted in for Udemy ads and affiliates.

 

Not all instructors' courses will get promoted that much so lets see how this 13% gap can be filled to have minimal impact on total revenue.

KatieBent
Community Manager
Community Manager

@AndreiNeagoie - Your summary of the new channel-based shares is correct. However, this piece isn't quite accurate: "The above increase Udemy's revenue and thus more money for marketing (by definition cumulative instructor revenue will go down)."

 

On the whole, we expect this change to result in the same division of revenue between Udemy and instructors in 2021 as the current system would. While this looks a little different for every individual instructor, for instructors as a whole (and for the strong majority of individual instructors) the change should be neutral.

 

@Wolf2k21 - Ah, I understand your question now, thanks. The plan is for current English Udemy for Business courses to be included in the pilot. If an instructor is opted in, but their content is not currently included, it will be considered for inclusion in both versions of the collection by the usual Udemy for Business criteria. Does that make sense? 

 

 

Alfa-eLearning
Level 3
Level 3

@KatieBent will subscription courses need to be exclusive like UFB ?

KatieBent
Community Manager
Community Manager

@Alfa-eLearning - Yes, the pilot is a part of the Udemy for Business program, which requires exclusivity upon inclusion. However, the pilot consists of courses in the English Udemy for Business collection, which are already subject to the exclusivity terms of that program.

Alfa-eLearning
Level 3
Level 3

Say if instructor is earning $1000 from organic sales and NOT opted in Udemy ads and affiliates. So total sales is $2000 (Udemy share + instructor share). Now with new revenue share model for the instructor to earn same i.e $1000, it will require total sales of $2700. Then only it will be 2700 * 0.37 = $999.

 

So this extra $700 is 35% of $2000 sales.

 

@KatieBent its interesting to see if we can have boost of 35% in total sales to earn the same revenue.

DiogoAlvesd487
Level 3
Level 3

@KatieBent to clarify regarding the Subscription collection. Will the UfB English course collection be different from the Subscription collection?

DiogoAlvesd487
Level 3
Level 3

Very exciting news regarding the Subscription-based business model. What do users stand to gain from it?

LawrenceMMiller
Community Champion Community Champion
Community Champion

I am sure that how each instructor will be affected will be slightly different. Some will lose a little and some will gain a little. However... I've been here a long time and seen a lot of changes so just a reflection on this latest change. It is primarily about growing the business. 

 

In the past, every time Udemy makes a change in pricing or payment to us, people freak out. It seems to be a pretty automatic reaction. But... when you look back twelve or 24 months later and you can see that it enabled them to grow the business and our net revenue has gone up.

 

The biggest freakout for me was when they dropped the UFB revenue share from 50 to 25%. That was in December 2017. They did this on the theory that this would enable them to invest in UFB growth. They did, big time! And my UFB revenue has gone up more than 400% as a result.

 

My understanding is that this new change will enable them to spend more on TV ads and other promotions that will increase net traffic and revenue. They have been right in the past, let's hope they are right again. At some point, as in all partnerships, you have to trust that your business partner is acting in your interest as well as their own. 

 

ThomasBlees450
Level 1
Level 1

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
Level 2
Level 2

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

KatieBent
Community Manager
Community Manager

@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
Community Manager
Community Manager

@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.

EngineerCivil
Level 2
Level 2

It’s time to leave the udemy platform. 

Kain_Ramsay
Level 3
Level 3

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???

Wolf2k21
Level 3
Level 3

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
Community Manager
Community Manager

@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
Level 1
Level 1

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.

 

LawrenceMMiller
Community Champion Community Champion
Community Champion

@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. 

 

ScottDuffy
Community Champion Community Champion
Community Champion

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.

 

Julian
Level 1
Level 1

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.

NunoFonseca
Level 1
Level 1

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.

 

debra1111
Level 3
Level 3

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.

Wolf2k21
Level 3
Level 3

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
Community Champion Community Champion
Community Champion

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
Community Champion Community Champion
Community Champion

@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?

 

NunoFonseca
Level 1
Level 1

@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
Level 3
Level 3

@Wolf2k21 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

NunoFonseca
Level 1
Level 1

@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 🙂