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Wednesday
May072014

Why I stopped selling courses on udemy

The Udemy Pyramid Scheme.

I’ve run several successfull courses on udemy back when they had a royalty rate of 90% revenue share per course.   Then things started to change, to the point where teaching in udemy to me feels like trying to win in a pyramid scheme. 

Here are the “new” revenue share model numbers:

http://support.udemy.com/knowledgebase/articles/277758-instructor-revenue-share

Quoting:

  • 100% revenue share on students that instructors bring to Udemy

  • 50% revenue share on students that Udemy brings to an instructor’s course

  • 25% revenue share on students that are driven by Udemy paid ads

end quote.

Seems fair. Until you realize, the hard way, that any exiting udemy user that takes your courses that YOU didn’t bring in with your specific course codes and discounts, counts as a 50% revenue share.

 

Points of consideration:

 

  1. There is a finite number of people who might be interested in your course
  2. There is a high chance that many of them have already signed up for udemy
  3. Of those who haven’t yet signed up to udemy, you have to bring in and make them use you special offer codes. Only then do you get 100% of that course’s revenue.
  4. Once you did that, you basically screwed over other course instructors, because your student will now and forever be considered a 50% revenue share for all other teachers.
  5. That means that I benefit and make money at the large expense of other teachers on udemy, while making udemy much, MUCH more money in the long run.
  6. The earlier I started with my courses on udemy, the more chances I have to get into udemy those users who have not signed up to udemy yet. The later i sign on to teach in udemy, the smaller my chances are ever making more than 50% revenue share, unless I bring my own crowd.
  7. Consider this: for each student on udemy, udemy makes 50% commission on all their purchases, EXCEPT one instructor.
  8. Eventually, there will be less and less chances for ALL instructors ot make ore than 50% revenue on courses, as the student population targeted has already signed up. any students that UDEMY brings to the table  with ads, will actually only get you 25% revenue share.
  9. This whole idea pits the teachers one against the other, to see who gets "fresh" users first, thus taking them “away” from other teachers. That’s not healthy.

 

 

So I opened my own shop on shopify and at least now I don’t feel like I’m screwing over anybody else. I pay more than 100$ a month for some of the plugins etc. But I do have enough people on twitter and I’m well known enough in some corners that it pays me OK.  I don’t like doing it, but it feels better. If they went back to the old model I’d probably go back to them, honestly.

When udemy sent me an email asking why I haven’t been selling any courses, here was my answer:

 

Hi Roy,
I saw that you drove almost $4,000 to your Udemy courses between Nov-Dec 2013 with instructor coupon codes and haven’t driven any additional income since then. I just wanted to send you a note to find out what we can improve to help you continue building your business on Udemy
Would you mind providing a little insight?
1) How did you drive your initial Udemy course sales?
2) Why did you stop promoting your Udemy courses? 
3) What do you need to restart promoting your courses?
I appreciate any feedback you can provide! And if you’d like to schedule time to chat, I’m available. Just let me know. :)
Regards,….

My answer:

I stopped because your new royalty model (50% if existing user) is basically a pyramid scam. And it feels unfair. 
By bringing in new users I make sure I get more royalties, but I also screw the royalties for other authors. Also, there is a limited number of people who are interested in a specific subject, so only early risers will get their full royalty.
It feels wrong. I was very happy with the previous model of a flat rate royalty, but this one has me looking for alternatives.

 

 

Needless to say, they didn’t reply yet. 

I would recommend that you stay away from teaching on udemy. it feels unethical.

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