In today’s fast-paced digital world, e-learning platforms are an advantage for the extra set of skills to make up an interesting resume. But, most of the time, digital skills are not achieved because of strict timetables. However, Udemy has come up with a blessing to solve this issue for across 30 million students around the world. It has opened its massive Online platform for courses that are available either free or too expensive. Then how does Udemy manage to make money with its existing business model? Well, we can help you get in-depth knowledge about Udemy Business Model, how it works, and its over-year revenue.
Udemy has a wide range of courses on its platform which includes categories that relate to:
Source: udemy.com
- Photography
- IT & Software
- Designing
- Entrepreneurship & Business, and more
Being a massive open online platform, one can have access to unlimited course participation. It is a crucial asset for students who want to gain knowledge and learn with diverse skills at their own pace.
What is Udemy all about?
Udemy skyrockets by selling courses that root to You + Academy. In addition, it functions by making complex tasks easy to learn. It was first found by Eren Bali in the year 2010, and since then, this works as an online learning platform with unlimited access to learners. However, all courses of Udemy are taught by third-party instructors who take the initial step to create and upload videos based on education. Likewise, they can also earn money by uploading courses on a platform that has a wide range of 1,00,000+ available courses. Students can therefore purchase their courses and start learning them at their own time.
How does Udemy Make Money?
Udemy consists of over 1,00,000 courses, with 30 million students available for learning in 192+ countries today. Then, how can it earn revenue with 30 million students, 100,000+ courses, and 70,000 instructors today? Stop wondering! Because we have discussed Udemy’s business model and its revenue gained over the years, below.
Udemy Business Model
Udemy has a vast marketplace business Model by organizing products and services of instructors across the globe. It sells the courses on its own website by acting as a mediator that has no ownership of its products or services. The prices displayed under every course are determined by the seller itself. Udemy charges a commission for the huge services that it provides. Likewise, it also gives a platform that contains huge traffic in the form of audiences for purchasing the courses. For instance, Udemy is like any other online shopping platform such as eBay, Flipkart, or Amazon, which acts as a mediator between seller and purchaser.
Revenue Business Model: Is Udemy Profitable?
The annual revenue that the company incurs is $28 million by its process of selling and promoting courses uploaded by various instructors. It makes money through the combination of revenue models in its own company as they include the below business models:
- Software as a Service also known as SaaS
- Marketplace
- Business to Business also known as B2B
- Commission Based Model
- Massive Open Online Courses are also known as MOOCs
Now, have a look at the three ways by which Udemy Business Model buzzed up with its revenue in 2021:
- The Monthly Membership Plan: Udemy Pro
The Udemy Pro service was launched in 2019 to provide monthly subscription services mainly for those who are interested in IT certifications. The Monthly subscription fee entertained by unlimited access to the contents and IT certificates includes a cost of $19.99 per month.
Udemy Pro Charge: $ 19.99/Month
Source: udemy.com
2. Commission: Instructors Share of Revenue
The courses displayed on Udemy are created by the instructors that work as third parties. They create, upload, and earn revenue through this platform. These instructors get an income through the revenue split that is decided by whoever makes the sale. The 3 kinds of revenue split are paid using, organic, acquisitions, and instructor promotions.
How does the Revenue Split work: When a user purchases a course from the Udemy platform either organically or by promotions. The instructor, as well as Udemy, splits the revenue as per sale made. Hence, the total revenue earned through that course will be split by both, the Instructor and Udemy.
Share of Revenue as per Udemy Commissions
Organic sales
Udemy: 50%
Instructure: 50%
Promotions by instructor sale
Udemy: 3%
Instructure: 97%
Paid User Acquisition sale:
Udemy: 75%
Instructure: 25%
The organic sales are made directly on Udemy with no paid promotion. Whereas, the Instructor sale promotions are through coupons or any referral links of the Udemy course. Further, the paid user acquisitions are made as an affiliate partner, on behalf of the advertising instructor course in the Udemy Business Model.
Source: udemy.com
3. Business Users: Udemy for Business
With over 5000+ courses available and more than 1,500-course instructors in the business platform. Udemy walks along the path of a Business to Business Revenue Model, also known as B2B Udemy Business Model. It provides vast services to 7000+ business and enterprise clients with IT certificates and training tools. This provides a root to online learning with its big clients like Lyft, Booking.com, Adidas, and Volkswagen.
Udemy for Business Charge:
- For a Team of 5–20 users: $360 per user per year or ($1,800 — $7,200)
- For an enterprise of 21+ users: Custom pricing is available.
Final Thoughts
Although Udemy Business Model develops on selling free and the most expensive courses, they do have attractive revenue models. Moreover, this provides a catchy option for Instructors in Udemy to earn Business to Business revenues. Udemy makes money through its cohesive business model.
Go on, share with us what you think!
Let’s talk about how Udemy Business Model has given you an idea of starting your own business.
