Udemy Business Model: How Does It Work?

You might be looking to buy Udemy courses or you may be an instructor who wants to put an online course on Udemy.

This article will help you to understand the business model of Udemy. It will also tell you what is Udemy all about and how does it work. Specifically, you find information about Udemy’s pricing structure including how much does cost for Individuals, membership pricing for businesses and revenue share for instructors.

After reading this article, you will be able to determine if this is the right eLearning platform for your needs or not.

Udemy is a course aggregator. It provides instructors with course creation tools to publish their courses. Instructors can host their courses without paying any fees. They get a revenue share when someone buys their course.

Students can buy any Udemy course that is hosted on its website. Individuals can buy single courses but businesses can buy their membership.

Let me tell you in detail how the Udemy works.

Udemy Business Model

What Does Udemy Do?

Udemy was founded on the thought that there are endless possibilities for an individual when learning is within his reach. Keeping this belief in mind, Eren Bali in 2010, founded Udemy to ease the process of teaching and learning online.

Udemy aims to be the hub for high-quality course materials that are available to the learners at their fingertips. The platform uses content from diverse teachers and online content creators and gives them a chance to earn. The content is available for individuals who would like to learn and gain new skills. The website enables its students to find diverse opportunities to learn.

Udemy has come a long way from its start it is one of the leading global marketplaces for teaching and learning. Udemy has been able to connect millions of students. They have also been successful in imparting students with skills they need to succeed in the prevailing job market. The outreach of the platform is summed up in the statistics below:

You can refer to my article on Udemy review to understand its complete proposition.

Udemy Pricing Structure

Udemy works on a single course pricing model for individuals. It also offers subscription plans to businesses.

The price of Udemy courses ranges between $20 and $200 for the individuals but on most days you can buy its courses at a huge discount. You can easily buy a course for as little as $10. You get lifetime access to Udemy’s courses.

You can read my article on Udemy Pricing to understand its pricing structure in greater detail.

Udemy Business Membership and Subscription Pricing

Udemy has a completely different business model for organizations. It offers membership or subscription plans for organizations teams having at least five people. Organizations have to pay a monthly fee per person to get access to a small subset of courses. Udemy offers only 4000+ courses to business users till the time subscription is active.

How does Udemy Work?

Udemy is based on three important pillars. These include the course authors, Udemy as a platform, and students.

1. Course Instructors or Authors

Course authors play a pivotal role in the functioning of the Udemy platform. They are the designer and developers for the courses. Instructors at Udemy uploads their video files directly to the platform. They are fully responsible for providing the knowledge support that is required by the students. The instructors can further make use of additional teaching tools to create a rich learning experience for students. These include quizzes, assignments, and coding exercises among others.

Udemy does not charge instructors with a transaction or monthly fees for hosting content. The toolkit to design content is also available for free on Udemy. The platform only shares the revenue from instructors. This revenue sharing between the instructor and Udemy is based on how the course reaches its intended audience. (Explained in the next section).

The first 90 days are crucial after a course is listed. During this period, the instructors can play a more active role to market their courses. They can reach out to their students and build a loyal student base, establish credibility through reviews, and make the best use of the Udemy marketplace. They can also use other marketing efforts including referrals and coupons.

2. Udemy Platform

The platform of Udemy acts as the main channel for providing the content from instructors to the students. Understanding the role of Udemy includes regular maintenance of the platform. This provides ease of use for both students and instructors.

In addition to hosting the courses, the Udemy platform provides technical and marketing support to the instructor. The technical team always reviews the courses to ensure that the students are provided with quality learning. Accounting is also done by Udemy staff. They keep a tab of the income and revenue sharing between the instructors and Udemy.

The Udemy platform also provides technical and accounting support to the students. Udemy is responsible for payment processing including collection and refunds.

3. Students

The third pillar on which the working of Udemy is based is Students. The students can learn new subjects by using the Udemy’s self-paced courses. The platform allows freedom of choice to students regarding when and what they want to study. The platform constantly recommends good courses for students to supplement their learning resources.

How Udemy Makes Money?

Udemy has adopted a ‘marketplace business model.’ Its working is like that of Amazon. This means that Udemy only acts as a bridge between the students and instructors. Udemy does not have its own content. It only provides a platform for organizing courses from different sellers or instructors. Here is some essential information about the business model of Udemy.

1. Entities

Udemy has a multi-sided business model. There are two different and interdependent segments. These include instructors and students. Instructors create online courses on diverse topics of their expertise and they are paid for their courses. The students buy online courses to enhance their skills.

The revenue from students is shared between Udemy and the Instructors.

2. Value Proposition

Udemy offers a lot of value to both Instructors and students. One of these is accessibility. The website offers consumers the freedom to select courses from their wide range of offerings. Also, these courses are available in 65+ languages intending to increase their accessibility.

The next value proposition is that of convenience. Udemy provides convenience to the consumer by enabling them to use the platform across various devices. Be it a laptop, smartphone, desktop, or tablet. Students also get a choice of viewing the content offline or online at their convenience. You can read my article on How to Download Udemy Videos to know instructions for offline viewing of the Udemy courses. The instructors also find the website convenient to handle. This includes the processes of customer service complaints and payment process. Udemy allows instructors to personalize their lessons based on their convenience.

The website offers state-of-the-art design tools for instructors to enhance their course content. They are also allowed to experiment with these tools. Also, Udemy has carved for itself a strong brand presence. With more than 57,000 instructors and 33 million minutes of video course material, the platform offers a niche.

Furthermore, Udemy also offers an array of business-relevant courses. These come under the websites “Udemy for Business” collection. Many Fortune 100 companies use these courses for the skill development of their employees. There is also, the price based value proposition it offers to students. The courses are available for as little as $10 when offered on deep discounts.

3. Channels

 Udemy’s main channels are its website and mobile app. They act as a platform for instructors as well as students. The firm also uses advertisements and social media pages to enhance its reach-ability.

4. Key Resources:

The prominent resource that is available to Udemy is its workforce. This includes the instructors and people of technical backgrounds. The technical staff work towards creating various design tools. Also, there are support staves to provide 24/7 help to users.

5. Revenue Streams

The revenue stream for Udemy originates from the revenue share model. The website attains revenue from instructors who use the platform to host their courses. The common revenue share scenario based on how a student is attracted to the course.

5.1. Instructor Promotion

Students make use of the course referral link or instructor’s coupon to make a purchase. In such a case 97% of revenue share is given to the instructors. Whereas, Udemy only takes 3% for administrative processing fee (4% in the territory of Japan).

5.2. Udemy Organic

When no Instructor Coupon is used and the user enrolls in the course directly after taking Udemy’s discount coupon marketplace, there is a 50-50 sharing ratio between the instructor and the company. This is also applicable when a student makes a purchase using Udemy promotion.

5.3. Paid User Acquisition Channel Sales

Udemy has many partners and affiliates throughout the world. If an affiliate sells a course through Udemy’s website, the instructors’ share reduces to 25% while affiliates are given a 15% commission. Udemy keeps the remaining money.

Conclusion

The Udemy business model is a marketplace based that focuses on the transfer of knowledge from instructors to students. The business model works in favor of the content creators in cases when they are able to attract students based on their own promotional value. They can generate more income if they can sell more courses.

On the other hand, the students also benefit. The students get a plethora of courses at affordable rates. Udemy acts as a convenient method for students to attain skills and unlock huge potential for themselves. Students can potentially get job benefits from buying Udemy courses.

You can go to Udemy homepage to checkout its current deals and discounts.