Udemy Business Model: How It Works

Achieving your goals by means of career has become a challenge prior to the Corona pandemic. You can be a professional with years of experience or, a student who has passed out of College and is out to join the workforce. Post the epidemic, the companies are looking only for the best talents in every […]



Achieving your goals by means of career has become a challenge prior to the Corona pandemic. You can be a professional with years of experience or, a student who has passed out of College and is out to join the workforce. Post the epidemic, the companies are looking only for the best talents in every domain. So, you need to acquire new skills as per the requirements of your industry. But there is one challenge. TIME. Do you want to join an institute or College for new courses? Then, you have to juggle between your work (as a professional) or, attending classes (as a student). But, online digital platforms such as Udemy fulfil your needs by offering more than a million online courses from renowned instructors for a modest price. That being said, after browsing the Udemy website and getting satisfied with the offered courses, are you thinking about the Udemy Business Model? How does this platform generate money? Then, you have come to the right place. Stay tuned, and you can get the perfect details. Let us first know about Udemy, and then we will cross over to the topic of this article, shall we?

Udemy:

A combination of two words – You and Academy, this platform has acquired global recognition. The reason, it facilitates the process of online learning devoid of a brick-and-mortar institution. Little did its founder, Eren Bali knew, his idea will trigger a wave of online digital platforms that will change the very landscape of education. At present, it has 1,30,000 online courses. With the last sentence, let us move fast forward to the Udemy Business Model.

Market Place Business Model of Udemy

Similar to Amazon and Flipkart, Udemy also organizes the courses of various instructors on its online platforms and sells them to deserving students. Udemy is a simple platform for the instructors to show case their courses and as per its policies, does not own the content. In fact, even the prices for every online course get decided by the instructor. But, Udemy does charge for administrative services and for various marketing options. Let us now focus on this topic.

How does Udemy Generate Money via its Business Model?

Udemy offers even free courses. However, it is on the basis of paid courses, this platform generates revenue of 2 billion every year. A student can opt for the courses in more than 80 languages. Also, the business model gets divided into two flawless types. The first type is for an individual, and the second, for businesses.

  1. There is no fee for the instructor to host his/her course on the platform. But, a student may have to pay fees for attending a specific course. The cost structure of a course by which Udemy generates revenue is via the acquisition of a student. The process is as follows:
  2. A popular instructor will get most of his/her students via word-of-mouth marketing or favourable reviews. The instructor may also advertise his/her own courses and make students sign the course via a coupon. In this situation, he/she gets 97 percent of the entire course fees. Udemy charges a mere 3% fee for administrative charges.
  3. Udemy also can promote a course via YouTube, Google, Facebook and various methods. If a student opts for a course via a channel, then the instructor will have to part with 75 percent of the total fees. Yet, Udemy gives the instructor the freedom to limit the number of times a course gets displayed on a channel. The instructor can also decide the type of channel where his/her courses can get displayed to the public.
  4. If a course gets selected via the Android or iOS app, then the platform gets 30 percent of the total fees.
  5. Let us assume, a student comes to the Udemy website and opts for a course without any coupon from the instructor. Then, the course fees get shared 50 percent between the instructor and Udemy.

Do you know Udemy’s Business Model designed exclusively for small-to-medium companies and large organizations? Called the “Udemy for Business,” it caters to training for employees to develop their skills. In this type, there are two plans called as Team Plan & Enterprise Plan.

  • Team Plan – Caters to companies with a workforce of 5 to 20 employees. Yes, there is an annual membership and the minimum requirement should be five users.
  • Enterprise Plan – Designed for companies and organizations that have more than 20 employees. The prices can vary with the selected courses and duration of training.

Udemy has also granted a two week trial period for both these plans. If the Company does not find the training satisfactory, then they can go for other options.

Conclusion

The revenue generating model of Udemy is flawless and extremely appealing not only to the instructor but also to the students. The main reason for Udemy achieving success is because of providing value, comfort, cost reduction, brand awareness and easy accessibility not only to the student but even the instructors. Also, the platform offers a wide variety of technical features free to the instructors to host their courses and provide training to the students.

Overall, Eren Bali has realized his dream of providing online courses to the needy via his digital learning platform. His model has caused more than a million working professionals and students to acquire new skills via the courses on Udemy Platform. As per the recent news on the website, the payment structure for the instructors is bound to change. Yes, more changes will happen in the future, but till then, let us give Eren Bali and his platform a salute for causing a revolution in the education industry.

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