In March, we announced plans for a pilot of a curated subscription option for individual learners. You asked great questions, and we let you know we'd answer more of them as we got closer to launching this new offering.
With Personal Plan opening up to a limited audience in the next month, we've put together an overview to help you understand more about the goals and structure of the pilot. Read more in the Teaching Center, and we'll see you back here in the Community with your questions and feedback.
The Udemy Instructor Team
I still have some questions:
1) What's the subscription gonna cost per month?
2) Why is the revenue share only 25% for instructors? I understand that it's 25% on UFB, because it probably costs more money to acquire big enterprise customers. But why use the same share on the student subscription? Will it not simply run in parallel to the marketplace? Why, then, is the revenue share not 37% as well?
So we already got our share in the marketplace reduced to 37% (I know that it doesn't change revenue much for most instructors, but it's still a reduction). I'm truly worried that Udemy will switch to only subscriptions at some point in the future, leaving the marketplace and its 37% share behind, and that our cut will then remain at 25% forever. So what's your take on this?
I think Jonas' second question is very valid, and important, and I don't understand @ElianaC 's answer.
" To make this happen, we're investing significantly not just in acquiring new learners who may be interested in subscriptions, but in building a user experience that keeps people learning (and subscribing) for a long time."
So, what this tells me is that part of the reason the instructor's revenue share will be only 25% is that you are investing in the development of Udemy's platform, but that doesn't make much sense to me, because the fact that we use Udemy's platform is the original reason why our revenue share from organic sales was 50% (and now 37%) in the first place. If our revenue needed to be reduced every time Udemy implements new features, we would be toast (and most likely out of here).
This also tells me that when the development of the new experience is finished, the instructors' revenue share will be increased.
"In our previous tests with individual consumer subscriptions, we've seen this model produce higher revenue for both instructors and Udemy".
Without a clear understanding of how such "model" works, that sentence makes even less sense. The new 37% revenue share from marketplace sales already accounts for any kinds of promotions Udemy will make, even those off-line and by other non-measurable channels like TV and such. That is why organic revenue was reduced from 50%.
What additional investments will be made, to compensate for the lower revenue share?
As Jonas said, it is more understandable in UFB, but for personal subscriptions it doesn't make much sense with the info we have.
Will the new Personal Plan always require exclusivity to Udemy?
@ElianaC You probably think this is obvious, but your said "Our very first iteration of the pilot in the US will use a price point of $29.99. "
Per what? Per month? Per Year? Per course?
I also don't understand the revenue split. To me the presented arguments seem more like excuses for maximizing profit. UFB has sales teams doing a lot of work to get companies to join, and given how UFB has grown, that has been well worth it for both Udemy and instructors. Fair. The same won't be the case for the Personal Plan (correct me if I'm wrong), which is going to run alongside the usual transactional sales. Potential students who are driven to the website one way or another will just be presented with both options. Of course there are nuances for pushing one or another, but anyway... Over time, it's not hard to imagine which option Udemy is going to push the most.
I do understand that it is an investment to build and scale a subscription model. But how is that different from all the other platform investments Udemy has made? And if Udemy believes subscriptions is what is needed to increase revenue, won't that investment pay off even with 37% for instructors? Did Udemy just "automatically" go for 25% because that's what instructors are used to with UFB? Again, for sure there is lots and lots of work for Udemy in building out a subscription plan, but how is that work different from everything it took for the transactional marketplace to get to where it is today?
Based on the limited information available, I just don't see how it makes sense.
@ba0708 exactly that! I never understood the outrage on the topic of decreasing the split to 37% in the marketplace, because it just makes sense. The same when they reduced UFB from 50% to 25% some years ago. Again, that made sense, because of the big sales team and so on.
But on this topic? No one seems to care, but this one might become the real problem. As Udemy will push subscriptions more and more in the coming years, our revenue will eventually come closer and closer to 25%, not 37%. How is that justified? We used to share the revenue with Udemy 50-50, which looked more like a partnership. Now the outlook is that in a couple of years, Udemy will take 75%, if this revenue split isn't adjusted at some point. And again, without Udemy doing more work or more investing, unlike they do with UFB.
@Abbie I think it would be very helpful to everyone if you could elaborate a bit on the plans of revenue share in the subscription world in the years to come. Thanks!
The role out of the Personal Plan is an experiment for Udemy. It is also an experiment for us instructors. I think the concern about the 25/37/50% revenue split transition is a legitimate one for us instructors. We should be concerned, but we should also have a wait-and-see attitude. There are many questions that none of us can answer now. For example:
I am sure you can think of other questions as well. I suspect that even Greg cannot answer these questions at this time, which is why you experiment to see what works. What we do know is that this month is a pretty slow month for everyone and I suspect that is because Udemy is spending fewer ad dollars this month, saving for a marketing push as they role out the new plan. Just a guess.
I noticed that the last two weeks have been slow for sure. Maybe a side effect of trying to get ready for the May 1 change to new plan.
I cannot see how the Individual Subscription Plan can work. I am assuming that the 29.99$ Price point is per month. That translates to roughly 360$/year. If we assume on an average that course might cost 14$ during sale, that would translate to 26 courses per year. How many students would be interested in that ?
Having both Traditional Market Place and Individual Plan may not make much sense. What am I missing ?
@VirajShetty265 I am not sure you are missing anything. Buying behavior is sometimes unpredictable. How it is presented to the market will determine it/s success. One might ask, why am I paying Netflix, Hulu, etc. a subscription fee, rather than just paying for each separate movie I watch? The subscription model is obviously working for entertainment and it is working for business subscriptions (UFB), but will it work of individual education? We will find out.
Hi @LawrenceMMiller sorry for not being clear, the price point of $29.99 will be per month, for access to the full subscription.
@LawrenceMMiller - Definitely worth a try for sure. You make an excellent point - if more people are attracted to the site because of this, then it can have an effect of increasing the traditional marketplace sales. We are more likely to benefit indirectly 🙂
Hi all. Thanks for asking good questions and really seeking to understand goals and plans around the new subscription offering.
@Joshua George: You asked if courses in Personal Plan will require exclusivity. The short answer is yes. However, currently, the only content considered for inclusion in the Personal Plan is content that's already included in Udemy for Business. So effectively, there aren't any new requirements with respect to exclusivity
@JonAvis865: You asked about promotional announcements. For instructors, this will function similarly to Udemy for Business. Students who enroll in your course through Udemy for Business can view educational announcements you post to your course, but by default they won't receive email notifications for promotional or educational announcements. It will work the same in Personal Plan.
Then, to the question around revenue share ( @CarlosDeLeon @LawrenceMMiller, others). You're all correct that the reason we adjusted Udemy for Business revenue share from 50% to 25% a few years ago was to enable the investments that drove greater overall revenue for both Udemy and instructors. It's a similar idea for the individual subscription.
In order to make subscriptions successful -- where "success" is higher revenue overall for instructors and for Udemy -- we need to make significant investments that don't exist for a la carte purchases. This does include some short-term investments, such as building the required infrastructure, but it also includes some ongoing, additional marketing investments that are different from those required to drive a one-time sale.
Acquiring and retaining a subscription customer can be more complex and costly, but with returns that make the investment worth it. The value of a subscription offering is in retention: not just getting someone's attention and convincing them to make a one-time payment, but creating an experience that keeps them subscribing for months or even years.
We agree with Lawrence that the most important question is whether overall you make more revenue (assuming the work required of you is the same). Our work so far in individual subscriptions has strongly suggested that we can create higher returns for participating instructors by adding a subscription option than by continuing with only the direct purchase option.
Thanks for the response, @Abbie. It's true that if the revenue goes up (without adding more work), the revenue share doesn't matter much. I actually believe Udemy can do this; the numbers just looked odd to me. Anyway, I'm fairly optimistic since changes Udemy made have historically not impacted instructors negatively, so I hope this won't be an exception. 😉
@ElianaC , @Abbie I have real concerns about this model. Please hear me out:
Right now at the marketplace, students pay when they buy the course. With whatever revenue share.. I get paid that share when the student joins the course. And that price is not just based on the length of the course. It is based on many factors, so shorter but better courses with higher rating and engagement make us more money.
With the new subscription model, if I understand correctly, the student does not pay anything at enrollment, and the only way for me to make that money is for the student to watch all the lectures.
Now this may seem like a good idea: More engaging courses will get more money. But is Udemy's mission to engage or educate?
I have been praised by my students for making short and concise courses. Getting straight to the point and saving them time. I'm not lazy, I can make long courses, but this is not my philosophy, and this is not what my students want. They are busy working engineers, that have problems to solve.
In addition, I teach advanced topics so some students are happy to pay the full price just to watch a few of the lectures and that brings them enormous value and solves a problem for them.
With the subscription model, I am incentivized to do the opposite. Now I have the incentive to keep the information towards the end, and make long courses. All I need to do is engage, entertain and keep the students watching. That is YouTube, that is TikTok, this is not Udemy!
With this model, I will be making less money from my courses than my competitors who get fewer students but their courses are twice as long.
I am very happy to see Udemy exploring new models and I think it's a very positive move. So I'm not just being negative here.
What I'm saying is the value component is now getting lost in the model. The true value of the course, regardless of its length.
One idea can be making not every minute of any course in the subscription, equal. Meaning: A minute of course A which is highly rated is worth more than a minute of course B which is not as good. Or something of that nature.
For those expert and engaging instructors who create top quality content, this will undoubtedly be an excellent move.
At the same time, this move will naturally enable much of the junk teaching that the platform has attracted in recent years to sink to the bottom and die.
Naturally, those who aren’t expert in what they teach will feel intimidated by this move. Subscription models have my vote all the way!!
@ElianaC and @Abbie - for both the personal subscription and UFB, if a student does not watch any courses in a given month, I assume their payment still goes into the overall pot to be split among the instructors based on minutes watched by everyone else? Or does their payment for that month go 100% to Udemy?
Hi @Irishguitarist, we've already begun to make Personal Plan available to a small number of students in select geos. As we confirm the results look promising, we'll be expanding the pilot over the coming weeks and months.
Hi @MichaelPog, we definitely agree that the length of a course is not always a predictor of its value. What we've seen with Udemy for Business, which uses the same engagement-based payout model as Personal Plan, is that in a subscription context it's not only the longest courses that draw the most overall engagement.
When a learner has access to a full collection, they consider different things when choosing which course to take. Learners deciding on what course to purchase might ask "how much can I get for my money?" But when they already have access to the whole collection they may ask "how much can I get for my time?"
We can't guarantee that learners paying for their own subscriptions will behave the same way as learners who have a subscription provided by their employer -- that's one of the things we're aiming to learn from this pilot. But we do want to reassure you that from what we've seen from our existing subscription programs, there are many factors beyond course length that contribute to a course's engagement and success.
Hey @WilliamStewart, - Yes, if a student subscribes but doesn't consume, the money they paid for their subscription still goes into the overall instructor revenue pool for that payment period.
@Abbie thanks for the response. It makes perfect sense. And I like this attitude. I personally experienced this as a student, taking courses on Udemy that were so padded with none sense talking just to make them appear longer and more valuable... My time is more valuable to me than money.
One other concern is currently based on my courses length and my calculations I am making about $1-$2 per student who watches the entire course on UFB. It's not a big deal for me now when it's just a supplemental income to Udemy Marketplace. But if the market place is replaced and my income per student is going to be the same then it is a big deal. So how will Udemy ensure that doesn't happen is very vague at this moment for me.
If the math says that won't happen then that's great. But if the math is some instructors with 60 hour courses will make more but the rest of us will make less and the average will be the same as today then this is not great.
@Abbie, how does the Personal Plan work in regards to instructor promotions? I understand that this is a pilot so it might not be set in stone for the long term. But for now, I assume that Udemy will not promote the subscription model to traffic sent by instructors through referral links and coupon codes? For the long term, I'm curious how the model would work with promotions, if at all.
Also, the FAQ states the following:
"For first-time subscribers, there may be an option to trial the collection for a limited time before subscribing."
What happens if someone trials the subscription for a week and watches a lot of content, asks questions, etc., but ends up not paying? Are the watched minutes just not added to the pool, so the end result is similar to refunds (i.e. instructors won't earn anything)? Or are the minutes added but no dollars are added to the pool (i.e. the minutes are factored in, but the "pie" won't be larger)?
Hi, While I'm excited about the growth in Udemy in terms of Subscription and TV ads. I am a little concerned, Now I am a relatively new instructor with 2 courses , Neither of them are selected for Udemy for Business yet. So if a subscription model is rolled out and only UFB courses are made available there, would that mean , that a student who is using a subscription model , will never know about my course on the platform? Since they would only view the selected courses? Where would the new subscription model leave instructors like me who's content are not included in UFB or Subscription, as being selected is not exactly in our hands. One of my courses currently is a Best Seller but not selected in UFB. @Abbie I would be grateful for your advice on this. Thank you.
@JasmineBayer My understanding is that this is just to limit the scope of the pilot, so if Udemy proceeds with the Personal Plan after the pilot, it won't just be UFB courses that are available.
Once again, Udemy is taking more of our money. Every year it's a new little change that continues to add up. Now people like me who make 99% of our sales from Organic are now going to make a lot less than what we were making before.
It's such a trash change. Why do you guys do this and then lie about how it's with instructors in mind? Did you ever once ask me if I wanted to take a hit in my organic earnings? Of course not.
With moves like this, you're going to end up with lower and lower quality courses since less and less people will commit the time to make quality courses with such low commission rates. It's just not even worth it anymore and I say that as someone who makes 1,000+ sales. Why should I try putting in the work when you keep taking more and more of my sales?
Organic sales is something that should be given a high commission rate for the simple fact that it doesn't cost anything on Udemy's end to make the sale. Ads I understand the 25% rate. But like I said, 99% of my sales are from Organic. So stop punishing me.
Sorry, but isn't this getting a bit repetitive?
To be fair, nobody is forcing you to read his comments. They wouldn’t be tiresome if you didn’t read them. If you aren’t interested in what he posts, why not just skip over it?
I wasn’t aware that this forum was only for “big players”.
@MichaelPog I share the same concern, even though I'm a new instructor.
I have been doing very well during these first two months on Udemy, and I noticed that a good share of students buy the course but simply never engage (completion stays at 0%).
In that case, I still get paid, Udemy gets paid. While with the Personal Plan I would get nothing from a sale like this.
@Abbie - How would an Instructor come to know that a Student enrolled is through Corporate UFB or Personal Subscription model?
Do we have a new tag for students acquired through Individual subscription model?
@Abbie can you answer the question raised by @JasmineBayer above.
Specifically, when the subscription model finally goes live fully:
1. Will it offer Personal Plan subscription customers only courses that are included in UFB?
2. Or will all courses across the platform be included in the new Personal Plan subscription?
3. Or will Udemy curate courses for a second catalogue that is separate from the UFB catalogue?
@Human-Science They have answered those questions.
They have said that the plan is initially an experiment, limited in scope, but it will include only UFB courses. That is the only plan for now.
@ElianaC @KatieBent Do you have any input about the concern some of us, instructors, have been sharing?
"I have been doing very well during these first months on Udemy, and I noticed that a good share of students buy the course but simply never engage (completion stays at 0%).
In that case, I still get paid, Udemy gets paid. While with the Personal Plan I would get nothing from a sale like this."
I understand you want to encourage student to keep learning, "building a user experience that keeps people learning (and subscribing) for a long time" as you said.
But aren't we both losing in the case I described above? Or do you expect this change to have an overall positive impact on the instructor revenue, but with disparities among instructors? (some benefiting from the Personal Plan and some others losing revenue, like the ones with lower student engagement)
The student will still pay Udemy whether he/she watches any content or not.
My profits in May 2021, have gone down a lot already and I am very very disappointed. Courses will be shorter and have lower quality and that is really a pity.
Why do think that:
1. Courses will have lower quality
2. Courses will be shorter
I would have hoped that courses will need to have higher quality, in order to hold student attention, otherwise they will get bored and consume other courses without paying any extra. Instructors will get paid not because a student bought their course, but because they are genuinely consuming them, minute by minute.
Also, regarding length. If you make an hour long course, the maximum you can get paid is for 60 minutes consumption. But the longer your course, the more minutes to consume, and therefore the more you get paid.
Have I misunderstood something in your rationale?
I have a question!
Are there any special requirements for these courses?
@TigerVerse At this point the program is for those courses that are currated in the Udemy for Business catalog.
@Abbie, has the program already started? I have courses on UFB but I don't see any students from the "personal plan subscription"
Hi @MichaelPog, the Personal Plan subscription model It’s still an experiment, meaning that only a limited number of users are seeing the option. The pilot has started in April, and as it goes forward over the coming months, we’ll make sure to keep you up to date on our progress and our plans.
Udemy Community Team
@Bella you mean there are just too few students that's why I don't see any?
That makes sense.
This is regarding "Try it for 7 days" option we have in the personal plan.
If a student didn't continue to a paid plan after 7 days, will those minutes still be counted in the total minutes' pool?
And if a student continues with the paid plan after 7 days, will the minutes consumed in the first free 7 days will be counted in the total minutes pool?
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