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.
I see this will largely benefit the already top instructors on the platform, the ones that are on all the Udemy emails and ads on Youtube and other media types.
My sales come mainly from Udemy organics average about 80% of my sales, my own promotions average about 15%, and the other 5% come from affiliates and ad programs. In my case, I'm having a 13% loss in 80% of my sales and a 50% gain in 5% of my sales, so in my case, I'll lose about 8% a month.
I believe that instructors that are always featured on the ads have these numbers very different, with more ad program sales (as they are on all the emails and youtube), so the revenue will logically go up.
This will only make it even harder for new instructors to join the platform too
Also, Udemy already makes it very hard for us to run our own promotion by limiting the amount of vouchers instructors can create to 3 a month and limiting the time it can be valid.
If I want to have a coupon for the whole month, the minimum amount I can do is $12.99. If I want to do a larger discount with only 3 coupons, I can only do it for 15 days as the larger discounted coupons expired in 5 days, which also means each campaign I create have to be updated every 5 days with new coupon codes, or I have to use a $12,99 voucher for the whole month and run just 2 specials for $9.99 or $11.99.
So now, on top of not been able to create my own revenue as freely as I would like, my organic revenue will be cut by 13% while my tiny revenue from ads, that was a side sale for sure as I'm never featured on the news as I said, will increase
It is actually quite funny because the last 10 emails I receive from Udemy has mostly the same courses (with a small variation here and there) that I already demonstrate no interest in buy, they don't even fit the profile of courses I buy (and I have a lot of courses from Udemy about 2k most with reviews, so Udemy should be able to have a good idea of my likes and dislikes) but I divert, what I'm trying to say is that with this new polices this instructors always featured on the emails and ads will largely increase the revenue. In contrast, instructors that depend only on their own hard work will decrease.
@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.
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?
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?
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.
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.
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?
@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.
@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.
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...
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?
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.
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
@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.
I just ran my numbers: 25% lower.
But... I already put a down payment on a Lambo...
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.
so cool but did you put some aspect
Funny to see all these pathetic attempts to guesstimate the revenue change. There's only one certain thing here: the timing couldn't have been ANY worse.
As a software engineer, the most important lesson you learn is that estimates are always wrong. We'll soon see how this change actually affects us.
@KarolyNyisztor Just out of curiosity, why "the timing couldn't have been worse." I don't understand.
>> Just out of curiosity, why "the timing couldn't have been worse." I don't understand.
COVID-19, financial crisis--just to name a few reasons for bad timing.
I am trying to see how anyone's revenue can go down by 25%. As per my calculations, the worst case scenario is -13%; that's when all your revenue come from Organic. Am I missing something ?
How about increasing our revenue share? What a weird idea, isn't it?
Actually, Apple did exactly that: they reduced their commission rate from 30% to 15% on paid apps and in-app purchases.
Developers enrolled in their App Store Small Business Program can "invest more resources into their business to continue building quality apps that customers love."
Your math is wrong. Let's assume someone is opted out of promos:
50% (current cut of organic) - 37% (new cut) = 13% reduction
13% reduction ÷ 50% (original cut) = 26% less income
Let me break it down for you.
This scenario implies an organic sale with no promotion or affiliate involved.
I am going to say something that is likely to make me very unpopular. All of the calculations being done are not very meaningful because they completely leave out the major factor, the cause, of the change. Of course you can calculate that with the change from 50 to 37% and 25 to 50% you may come out a little better or worse. That's the easy part. It is almost irrelevant because you are not calculating the cost side of the business, only the revenue share side of the business. You are leaving out half of the relevant facts, and that is largely because we do not know those facts.
Let me give an example.
Let's pretend you are a farmer and your product is bushels of corn. You are the creator. You sell to a chain of stores who place your corn in their store and sell it to customers. We will ignore the middle men, futures contracts and all that to make it simple. Let's imagine that you have costs to produce a bushel of corn. You have a bank loan on the land you use, you buy seed and fertilizer, you buy a tractor and other equipment to plant and harvest the corn, and of course, you have labor. Let us assume that if you add up all of your costs per bushel of corn, the costs come to $5. And, lets assume you have been selling your corn for $10 a bushel. So, you are getting 100% above your costs, or you have a gross margin of 50%.
Now, on the other side of the business is the sales and marketing of your corn. Let's assume that the store is able to sell your corn for $20 a bushel. So they are splitting the revenue with you at a 50% rate (like organic sales). But, the store also has costs in addition to the $10 they pay you. They have rent on property, marketing, insurance, transportation costs, and labor. So, from the $20 selling price they have to deduct your $10 plus another (just guessing) $9 for labor, rent, advertising, etc. In the real world retailers have a profit margin of around 2%.
To really analyze an adjustment in the percent that the farmer receives and the store receives you MUST know what their relative costs are.
Now lets relate this back to Udemy.
To produce a course on Udemy, what are our costs? Most importantly is the value of our time and expertise. This varies a lot across instructors given the different expertise and experience. What other costs - camera, lights, software... not much else. In fact our costs are very low and they don't change, with the exception of time responding to students questions.
Now, on the Udemy side: they pay for servers or server time; they have hundreds of employees, office rent, and they pay for marketing/advertising costs.
Most instructors are assuming a fair division of revenue is 50%, but without understanding the costs or the coming changes to costs. I am not increasing the costs associated with my courses. Udemy, on the other hand, when they increased their take from UFB sales from 50% to 75%, they proceeded to open new offices in Brazil and other countries, and hired hundreds of employees, and advertized the UFB service. Those increased costs were justified by the additional revenue and by the additional 25% share. You may say that I, as an instructor I gave up 25% to pay for the additional investments by UFB. Like all investments it was a gamble. Some instructors walked away claiming it was unfair. I stayed, assumed the risk, and my net revenue increased by 400%. The bottom line is, does your net revenue increase or decrease... but not from a fixed sum, but from the revenue after the investments are made.
The premise of the new change is not simply about the percent division of a fixed sum of revenue, which is what everyone has been calculating. That is a small factor in the business equation. The most important factor (and we don't have this information) is that Udemy is going to significantly expand their marketing to TV and other ads to increase total traffic to the site. Their costs, as with UFB, are going to increase. My costs are not going to increase one penny. That is what this is all about. It is about the changes Udemy is making on the cost side of their business. If you or I were going to make an equivalent increase in our costs we would have a different argument.
@LawrenceMMiller ... I think most people get that. Well, at least I do. People, including me, are doing calculations based on what info we have today. Sure, if traffic to my courses triples as a result of Udemy's moves, that's a win - but we don't have that info yet, so people perform calculations to get a baseline of where we are right now, with the information we have right now.
@Anonymous I agree. As with any change, there is associated risk. A year or two from now we may be able to assess that risk.
I'm going to preface this statement with the fact that I do appreciate being able to use Udemy to get started in this world. I've been fairly negative due to recent events (not just with this change, but some other issues I've had with Udemy), but the fact is I have made money and I'm happy about that. That being said, anyone defending this decisions as a way for Udemy to survive is GROSSLY disillusioned.
Udemy is a for profit company. They have a board. They have investors (that have invested $296.5 MILLION dollars). Their goal is pure and simple: it is to spend as little as possible to make as much as possible. PERIOD. End of story. The community champions who think Udemy is out there to make sure we make as much as we can may have some great experience as they've been on the platform for a long time, but newer instructors will have a different experience. Udemy has a lot of evergreen content that will continue to fund the old guard and they have no reason to spend more money on newer instructors.
If Udemy cared about the instructor's ability to make more money, you wouldn't have a literal competition with them regarding coupon codes. We would be able to set whatever coupon codes we wanted, we'd be able to share them however we wanted, etc.
Instead, they have an extremely smart system that involves us not being able to compete with their prices without cutting our own, driving down our margins and raising theirs by pure volume alone as we provide most of the support for these students.
On top of that, Udemy's instructor support is abysmal at best. We have:
1. No support system other than an email address and no way to follow up or see status.
2. No modifications to our metrics, which are paltry.
3. One type of quiz and no other features.
4. A review system that is absolutely horrible and allows for students to accidentally leave terrible ratings without review. And no process, other than chasing down the student on Linkedin, to rectify this. This literally affects sales, a single 1 star review can brick a new course for weeks. Not to mention the 48 hours before new ratings come in while waiting.
5. Shady practices such as not allowing students that are referred to gift your course without stripping the referral code from the purchase on the last step.
6. 48 hour+ delay to even see our reviews
7. 30 day no questions asked return policy where students constantly return courses and exchange for lower prices
8. No way to even modify notifications to strip out udemy for business enrollments from paid enrollments. This seems small, but it's so small that a company with a $296.5M cash infusion should be able to fix it.
9. Having to manually request 1080p for your videos recorded in 1080p. Literally setting you up for failure.
This is just a small sample of what I've seen in the forums. Now, THIS BEING SAID, I'm happy to be here making money. Is this a long term solution? Possibly not, especially given the new terms and Udemy's blatant disregard for Instructor satisfaction. I'm not saying the support people themselves are necessarily bad, they're just doing their jobs and their hands are tied. I'm also not saying that Udemy has no right to do these things, they absolutely do, but until we stop taking these things for granted because we made a little money last month, this trend will continue.
Now, if anyone asks me if I recommend Udemy? Absolutely. It's a way to cut your teeth and get into this world. But is it a permanent solution? Absolutely not. They're too volatile and the process just isn't always enjoyable.
So please, Udemy community leaders, consider what the new instructors are going through. You weren't faced with a massive percentage cut when you started. And many of you probably didn't start because you had just lost your living due to a global pandemic. And finally, please stop supporting a VC-funded company blindly just because they helped you make some money. They did it for themselves and their investors. You might have some pull if you've been around here forever, but we don't.
@derekm1215 I respect your view and your experience, which is obviously different than my own. You are right that I, and others, didn't start here because we lost our job due to the pandemic, and you are right it is undoubtedly more difficult to build up a student base if you are the tenth or twentieth instructor on a topic than if you were one of the first. That is all very true.
But, just a couple observations, and this is not to discount your opinion.
You only have one course published. I have said this many times in this forum, you can't succeed on Udemy with only one course. Everyone starts with one course, but those who are successful build up five, ten or twenty courses on related subjects. I was on Udemy for two years, from May '14 to September '16 before I made more than a couple hundred a month. Then, I published one course that really hit the mark and things began to increase.
I do want to correct the record. We have seen several changes in pricing and sharing over the years. And, I think we are probably more accepting of this change because we have seen that the previous changes were followed by increases in our revenue.
You said "Their goal is pure and simple: it is to spend as little as possible to make as much as possible. PERIOD. End of story." I guess you could say this about any and every business. I can say that about my own business. But, and for me this is a big "but" I do think businesses have a purpose beyond just making money. This is probably not the place to dive into it, but I think the democratization of knowledge, is a worthy/noble purpose. It is transformative on a global scale. I love the fact that someone in Yemen can take my course on management for a few dollars, the same knowledge that I used to share in corporate training for thousands of dollars a day, and it can be transformative in their life, is a really terrific thing. We all want to make money, but it isn't only about that.
As to all the other flaws in the Udemy system, I will only say that Udemy, like all businesses, is a work in progress.
@LawrenceMMiller I agree with many of those points. And I'm not complaining about my gross revenue right now.
I do have one course, and I know what I signed up for. I would just appreciate it if Udemy would stop "muddying" the waters with new percentage split policies when the ones they have aren't even ironed out.
This decision has been made because those that are not giving their extra 25% cut are reaping the benefits of those that are, I get that, but it's just very poor timing. And, again, you would typically hope for a little give with the take.
Udemy could fix any of the items on my list and I would be less bothered by this change. Their reporting is just not robust enough for us to feel comfortable with changes like this unless we can really drill down into the data, which we can't.
As someone who has built courses on other platforms and dealt with as many, or more, students, I can tell you that volume is not what we want. We want margin. By increasing our students and cutting our margin, sure, we might get as much or more money, but not enough to provide the support these students deserve. This eventually cheapens the learning process and leads to less effort being put into courses, etc. This isn't a theory, I've seen this play out. And it always starts after the first round of funding.
I hope this all works for us, but the numbers just don't add up, cutting revenue for more volume is not in the best interest of the instructors, especially when we already get $1.46 or less from some students after the cuts. In fact, if Udemy wants to do this in good faith, they can take part of the hit for the apple/android store or levy the taxes on the students instead of the instructors.
I think it's great that students can change their lives, and I do everything I can to help facilitate that as evidenced by my personal responses to every question I get on my course and the support I provide in other mediums outside of Udemy, but more processes need to be put in place before gearing up for another influx of students.
If all that is down will benefit instructors revenue then its very good step
This is just awful and is compounded by the usual Udemy obfuscation, using an undefined term such as "blended share".
For me, it means a a reduction in income of 26% (as I will now get 37% rather than 50% of sales, as don't do any independent promotion). If I wanted to spend my time on independent promotion, rather than course creation, I'd put the course on my own shop on Thinkific, rather than a "department store" such as Udemy.
I opted out of promotions long ago because I don't want my high value courses selling for around $10, which is what happens when one signs up to to promotions.
To be frank, it just looks ridiculous to see a course with $150 dollar price-tag selling at $10. It says, "the real price is $10 but I'm pretending it's $150, so you think you have a good deal"...transparent nonsense. So that's not for me.
This is a real kick in the teeth for high value providers who now have to seriously consider their options.
a) I am not sure why you think your courses are of higher value than many or most other instructors. They are not. Your longest course is four hours. Give me a break! And, no, you do not have more experience, have not written more books, etc. etc.
b) There is nothing "obfuscated" about blended share. It is perfectly well defined. You are blaming Udemy for your mistake of not opting in to promotions. So, opt in. Many of us are making between 10k and 100k a month on Udemy because we understand the concept of volume. If you spend three years writing a brilliant book, it doesn't sell for what you think it is worth, it sells for the market price. If it sells well, you can make a lot of money. But, you will only earn 15% of the revenue and that isn't much. Udemy is a mass marketing machine and they do it very well. You should have understood that.
c) You should also know that courses are not selling for $10 when on sale (in the U.S. or UK). That is out of date. Course prices are determined by statistical analysis based on demand, length, ratings and other factors that determine value to demand. The average revenue per sale has been going up as a result of this methodology. The exception to this is the selling price adjusted for economic conditions in less wealthy countries. This is a value-based policy. I have no objection to my 18 or 14 hour course selling to a young business student in Zambia for $1.50 if that helps lift them up.
d) at the same time you can sell your courses on your own platform. You will soon learn that attracting traffic to your site and selling for your desired price is not so easy.
@LawrenceMMiller Quite a lot of untested assumptions in that reply but thanks for your friendly input, always good to hear what the community champions have to say.
Hm... I'm not sure about this. I am putting the brakes on spending time on my new course while I see how this pans out. I suspect it will have a BIG impact on Instructor revenue...
Everybody wants to make more money, including Udemy, and it has to come from somewhere. Let's watch this space.
I can see we having a serious conversation here. I wish you, aren't “lost” on the life path you go along.
Actually i want to ask some question too. About most people suspicious the system of "Direct paid advertising". I quit my day job due to negative threatment from senior, only have some limit of bucks to spend in this investment.
Dear @KatieBent I would like to know...
Your reply is kindly appreciate.Thank you.
My sales have plummeted to about one third of normal since the beginning of April. Has anyone else had the same experience? And does anyone know what to do about it? Is it part of these promotional changes?
I do not believe that any the announced promotional changes have gone into effect yet.
But, I agree that it is a bit slow. I just don't think they are spending a lot on ads at the moment.
I am actually seeing about 30% higher for April 1-9 compared to March (if I average the revenue/day). Udemy is probably spending on Ads for different courses at different times. I doubt whether we can compare this way.
Please, I don't really get what's gonna happen on the update
It is explained at the beginning of this discussion.
Don't worry. Just develop good courses and you will be fine.
I have also observed the same: revenue from the share of revenue via Udemy Organic channel has decreased to 37%, but the share of revenue via Ads Program is still 25% (instead of the promised 37%).
@KatieBent @Abbie could you please explain this?
It does work correctly for me. Looking at my sales, the change happened just recently, so perhaps there was a brief transition period?
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