The Economics of Teaching in an Online Learning Marketplace (+0.34pts)

If you’re a course creator, there are numerous factors you must weigh when deciding what online learning marketplace or platform is the best home for your course. 

- What learning platform aligns most with the audience I want to reach?

- How much marketing will I have to do on my own?

- Does this platform require exclusivity, or will I be able to offer my course at other online sites?

The answers to these kinds of questions will go a long way in helping you determine what course platform will work best for you. More than any other question I hear, though, is:

How will I be compensated?

Unfortunately, the answer to this question is a bit complicated. Each platform will possess their own business model that directly impacts how they pay instructors and creators.

The two most common models are:

1.) Learners may purchase each course individually, or

2.) Learners may subscribe to a monthly/annual membership for access to a library of courses.

Let’s examine some of the more popular marketplaces and how they’re set-up to compensate course creators and instructors:


Udemy

Niche: Udemy does not focus on a niche topic or area of specialty. You will find courses on nearly any subject in their marketplace.

Model: Courses are sold individually. Once a learner purchases a course, they have access to it forever.

Course Pricing: $10 - $200. For consistency across the platform, Udemy sets the price range for courses published in their marketplace, capping the most expensive courses at $200.

Instructor Pay: 

- Earn 97% of all sales you drive to the site (3% is kept for payment processing fee)

- Receive 50% when Udemy markets your course and is responsible for the traffic in finding it

- Receive 25% of sale when purchase comes through Udemy’s Ad & Affiliate Program

Teach: Become an instructor on Udemy. (Instructors will need to have their course approved prior to being published in the marketplace.)

Analysis: Udemy is one of the largest marketplaces with ~15 million students and 45,000 instructors, and recently received a $60 million round of funding to grow their platform. 

As with any marketplace where you publish content, Udemy controls much of the relationship between you and the learner. While the revenue share is fair, you won’t be able to collect student information, including the all-important email address (although you are allowed to send out promotional announcements  - see Udemy’s terms to ensure you don’t violate their instructor policy). Further, Udemy has the right to change pricing at their discretion (and they have). If you opt-in to their various marketing efforts, your course may be sold for as little as $10. 

You’ll need to ask yourself: is the loss of control (in terms of collecting student information, setting the course price) worth it if the marketplace has the potential to attract a high volume of students to your course?


Teachable

Niche: Teachable is an increasingly popular course creation platform. Any course creator or online entrepreneur interested in publishing an online course may set-up their own teachable site/school on any topic they choose. 

Model: Course creators have many options when determining how they want to sell courses. Because each creator controls their own school/site, courses may be sold a la carte, as a series/bundle, or membership.

Course Pricing: Pricing will vary and is determined by each individual course provider.

Instructor Pay:  Site owners will pay a monthly/annual fee to use Teachable's software and receive 100% of their sales, with the exception of those on the basic plan.

- Basic plan - $39 (5% transaction fee per sale)

- Professional plan - $99 (No transaction fee)

- High Volume - $299 (No transaction fee)

Teach: Because you’re in full control of your site/school, those wishing to teach need only to sign-up for one of Teachable’s three plans, set-up their site, and publish courses when ready.

Analysis: Teachable recently announced a new round of funding to grow their course creation/marketing platform. The platform's emphasis is designed for creators and entrepreneurs to build and develop their own teaching business. All Teachable school owners have control over nearly every aspect of their business, including course pricing, student data, transaction model etc. Each site/school is responsible for their own marketing to attract learners, but Teachable also includes features such as third-party integrations (ConvertKitZapier etc.), a native blogging platform, and email communication tools to assist schools in promoting their courses.

Teachable has also set-up myTeachable accounts to make it easier for students to enroll in courses across its many schools, as well as assist course creators who manage multiple school sites. They're also exploring new ideas related to increasing course visibility for its thousands of course creators.

At the end of the year when we have a few million people with myTeachable accounts, we will also experiment with driving you additional discovery from within the Teachable network, opening your course up to a brand new audience.
— Teachable CEO & Founder, Ankur Nagpal

Lynda.com

Niche: Lynda.com's specialty is professional development skills training.

Model: To utilize Lynda.com's full library of courses, learners will need to sign-up for a monthly/annual subscription plan in order to obtain access.

Course Pricing: There are two plans for interested learners:

- Basic plan - $19.99 per month

- Premium plan - $29.99 per month

Instructor Pay: Because Lynda.com operates a subscription model, calculating instructor pay is slightly more complicated. The factors that determine instructor pay are total revenue generated on Lynda.com in a given month, active users on the site, distinct views by user, and the contracted royalty rate for each author. In addition, some authors are paid an upfront fee to account for the time it takes to create their course. (For a better understanding, I found a more detailed accounting by a Lynda.com employee on Quora.)

Teach: Become an instructor on Lynda.com.

Analysis: Lynda.com was purchased by LinkedIn for 1.5 billion dollars in April 2015. More recently, LinkedIn was acquired by Microsoft. What’s all that mean? Lynda.com is a strong, well-positioned platform for the future. Their high-quality courses, reasonable monthly subscription, and ability to distribute across LinkedIn’s professional network makes them a great choice for course creators and authors.


Skillshare

Niche: Skillshare offers a broad range of subjects/topics across its course platform. 

Model: To utilize Skillshare's full course library, learners will need to sign-up for a monthly/annual subscription plan in order to obtain access.

Course Pricing: There are two plans for interested learners:

- Monthly plan - $12 per month

- Yearly plan - $8 per month (paid in one annual fee of $96)

Instructor Pay: According to Skillshare, “each month, between 30% and 50% of Skillshare’s Premium Membership revenue goes to our royalty pool for teachers. The remainder goes towards marketing and promoting your classes, supporting and investing in the website and platform, and running the day-to-day operations of our business. The size of the royalty pool fluctuates from month-to-month based on the subscriber activity, costs of operating the website (such as video hosting), and our marketing and promotion of your classes. Skillshare seeks to reward teachers fairly and accurately based on their level of class quality and engagement. Based on our current algorithm, teacher payments are primarily calculated based on the number of minutes watched by Premium members in each teacher’s class(es).” (Full text)

Teach: Become an instructor on Skillshare.

Analysis: Skillshare also recently received a new round of funding to grow their platform. 

The reasonable subscription cost for the learner ($96 for the year) on Skillshare could be advantageous for course creators (more viewers!). In an age of Netflix, Spotify, Apple Music, and Amazon Prime, there exists tremendous value in Skillshare’s low-cost, subscription-based business model. If you're a course author, I'd strongly consider establishing a presence here.


Pluralsight

Niche: Courses on Pluralsight are designed for the online developer, IT professional, and design creatives.

Model: To utilize Pluralsight's full course library, learners will need to sign-up for a monthly/annual subscription plan in order to obtain access.

Course Pricing: There are two plans for interested learners:

 - Monthly plan - $29 per month

 - Annual plan - $299 per year

Instructor Pay: Similar to Lynda’s payment model, Pluralsight offers up-front payment for course creation, as well as royalties for viewed courses. (I’m trying to find exact language online and will update this area when I do.)

Teach: Become an instructor on Pluralsight.

Analysis: Of the platforms listed here, Pluralsight’s core focus skews most heavily towards technical professional development. They’re well-situated in the market in terms of funding and a growing user/client base. Course authors with subject matter expertise in programming, data science, information and cyber security etc. would be smart in applying to become a course author here.


ed2go

Niche: ed2go offers a wide assortment of classes across a variety of subject areas. Their training niche is not in a focused topic/skill area, but more so in how they distribute their courses to the marketplace. ed2go partners almost exclusively with college community education/extension programs and adult schools. In conjunction with each school, they create a co-branded marketing portal and share revenue for each individual course transaction based off a predetermined wholesale rate for each class.

Model: Courses are sold individually via partner school sites.

Course Pricing: $85-$105

Instructor Pay: For ed2go’s Instructor-Led Courses (ILC), they currently issue a royalty to the instructor for each enrollment.  I’m told the royalty rate is ~ 30%.

If they convert the ILC to a Self-Paced Tutorial (SPT), ed2go will negotiate a flat, one-time payment to convert the course and use going forward. For the instructor, there will be opportunities to contract out additional work to issue updates, as needed.

Teach: Become an instructor at ed2go.

Analysis: ed2go holds integrated partnership agreements with over 2,000+ traditional learning providers. Since traditional schools and colleges have a stronger brand recognition in their specific communities than ed2go, it makes sense for ed2go to bring together a fragmented distribution network to attract students to their classes. They provide the courses and infrastructure, while their school partners focus on marketing the courses.

The big concerns for ed2go are: does partnering with schools and colleges still make sense, especially when other online learning platforms are going straight to the consumer? Will ed2go be able to innovate fast enough to ensure their course delivery system is able to provide cutting-edge instruction? Is ed2go’s 6 to 8 week course calendar cycle too rigid for the student who wants to learn right now? Finally, are ed2go’s classes too expensive given how other courses are valued in the marketplace?

There are some definite challenges with ed2go's business model in the changing online learning landscape. For those course creators who might be interested in making additional supplemental income and seek exposure to an established distribution channel, ed2go might be an avenue worth exploring.


Final Thoughts

Course creator compensation is tightly correlated to the business models that drive each marketplace. If you plan to offer an online course, the pivotal question you should consider is: what business model do you foresee establishing itself as the market norm in the future - single purchase or subscription-based learning? As an instructor, it'd be wise to position yourself in the right place (or at least be part of a platform that can readily adapt) before the market decides for you.

What I've listed above does not represent a complete list of all the online marketplace and learning platforms available to you. Other notable learning marketplaces and platforms I found include:

I'll continue to monitor and include updates as necessary. If there are any other platforms you'd like to discuss, please leave me a message in the comments section.

Learning Capture, Knowledge Curation, & New Lessons on Using Degreed (+0.24pts)

Using Degreed to Enhance the Value of the Learning You Create (+0.29pts)