aka Udemy knows how to fail
It’s been a while since my last rant, so I figured it was time for a new one.
Updated November 6th, 2013
As some of you may know, I offer an online video course through a service called Udemy. Udemy provides a hosting and marketing platform that instructors can use in exchange for a percentage of sales.
For the most part, I have been happy with my experience with them, however, my most recent interaction has left a very bad taste in my mouth.
What you are about to hear about are failures on multiple fronts. Failures including communication/messaging, usability, and customer service.
You have been warned.
One of the things I had loved about Udemy was how simple and straight forward it was.
Here was the deal, I put my course up on their site and if someone buys it from browsing the site or via one of their marketing campaigns they keep 30% and I keep 70%. If I get people to buy the course via an instructor coupon they get 15% and I get 85%.
Clear, simple, and easy. I know exactly how much I’m getting from each transaction. I have an incentive to market my course and they have an incentive to market my course. Great.
That’s all about to change.
On October 7th Udemy sends out an email saying they’re changing our arrangement and giving instructors less than 30 days notice.
First, the email starts off touting how amazing they are and how they’re growing like crazy, and then they announce they’ve decided they want a bigger piece of the pie, but it’s because
we’ve been thinking deeply about how we can help extend your reach even further. We want to help you teach 10 million people… and, one day, 100 million people.
Right. So what does that mean for instructors?
First, when Udemy brings a student to your course, the revenue share will shift from 70% to 50%.
Second, when you bring a new student to Udemy, the revenue share will increase from 85% to 100% (net of payments fees). This means, you will keep all the LIFETIME revenues when these students purchase your courses.*
Hmm.. o…k… so you’re now taking an extra 20% off sales you drive, but I’m going to make an extra 15% off of my instructor coupons, right? That doesn’t sound too bad…
Well, that’s what they’d like you to think and some people have been fooled, but that’s not really what it is.
Did you see that asterisk? That’s a big asterisk. Udemy didn’t use to have big asterisks before. As I mentioned, it was pretty plain and simple. So let’s look at what’s in the fine print.
Well, the first thing is “net of payment fees”, which appear to be 3%. Well, we didn’t have to pay that before, so now it means we’ve gone from 85% to 97% (100% - 3% payment fees) or a 12% increase in exchange for the 20% decrease on sales they drive.
Now what about that asterisk? You’ll notice they say “When you bring a new student to Udemy”, not “When you bring a new student to your course”.
That’s very deliberate. You see, they want to grow their platform and the only way they can do that is by getting new users to sign up to the Udemy platform, not getting existing Udemy users to sign up to your course.
So what happens if you buy my course through one of my instructor coupons and you were already a Udemy user from someone else’s course? You got it, Udemy will be taking 50%. Sneaky, eh?
And that’s not the only way they can get you down to 50%. See the links at the top of this post to the description of my course? Don’t click them! They don’t have a coupon code in them, so Udemy will take credit for your sign up and if you later purchased the course they’d take 50%.
And there are other ways to disqualify you from being eligible for the
100% 97% (e.g. waited too long to purchase, etc.).
Now Udemy says this is going to be great for instructors because they’re going to use all that extra money to increase the number of users which means more money overall for everyone. Well, a few things.
1. *Maybe* the overall money an instructor makes will go up, but there’s no guarantee, however, what we do know for sure is that the amount an average instructor will make per student is definitely going to go down.
2. Just because they’re going to reinvest the money in the product does not mean those investments will cause growth to happen any faster than it is today.
3. Didn’t you start off this email talking about how crazy your growth was already?
More importantly, things have now gotten a lot more complicated for instructors.
As an instructor, I now not only need to know about students enrolled in my course, I also have to understand what a Udemy user is and how that is going to impact my sales percentage, even though I have no control over whether or not someone has signed up to Udemy prior to finding out about my course through me. How’s that for user experience? Why should an instructor ever have to care whether someone is an existing Udemy user or not?
I also have to create a coupon code for any traffic I refer so that things are tracked properly (even if there’s no discount attached). If I fail to do so, then I automatically drop to the 50% level on sales I drive on this or any future courses that customer purchases from me. Way to push the burden of proof on to the instructors.
Ok, so that’s the deal. Not great, but maybe they’re right. Maybe it will all work out in the long run, but what happened next was really disappointing.
As you might expect, some instructors (myself included), we’re not happy about this change and brought the discussion to the Udemy instructor Facebook group. In that group, R J Jacquez raised the issue and a lot of discussion ensued between the Udemy support staff, those who supported the change, and those who disagreed with it.
Now, while there was a lot of passionate discussion going on, it was quite civil and constructive. However, suddenly posters who were against the policy change started disappearing as did their posts as Udemy support people began kicking people out of the group and deleting their posts.
And even after a private skype session with one of their support representatives, when I criticized their “clarification” post for it’s confusing terms (which they later corrected based on my feedback) and not presenting some one of the key scenarios I outlined above, I too was removed from the discussion group.
Here was the reason I was given,
You were removed from the group because it became clear you had intentions to continue the line of unproductive questioning from yesterday.
And told by their support representative,
I will not allow today’s conversation to be mired in the back and forth rehash from last night.
That’s right. That’s the attitude of the company. It’s their way or no way. They control the platform and they want to control conversation about it.
Now as a user and customer of the platform, is that the kind of company I want to do business with? One that treats it’s instructors that way and silences them when they disagree constructively? Whatever happened to Udemy being about building a community?
And so now I’m in a bit of an awkward situation. I have a course already on Udemy and a second one that I’m currently building. Do I stay with Udemy and hope for the best? Look for alternatives? If I’m looking for alternatives, does anyone have any recommendations?
Well, here’s one thing, for a limited time, if you sign up below you can get my current Udemy course for free. You might want to get it fast though, once they read this they just might boot me off entirely.
Perhaps Udemy will change their slogan to,
I’m altering the deal. Pray I don’t alter it any further.
Today’s image by: anujbiyani
As some of the comments below have pointed out, Udemy has added another scenario in which they can take more from instructors.
Should someone sign up to Udemy through a Udemy paid ad (such as a Facebook ad), then Udemy takes 75% of sales for all courses that person signs up for, regardless of how they got to your course.
I was shocked when I read that in our comments, so I decided to do some digging to confirm it. While digging, I discovered that while I had been banned from the Udemy Studio Facebook group, I was still a member of the Udemy Faculty Lounge Facebook group.
In that group, I found people still confused and frustrated over the new revenue share model (no surprise there). I also found this great article by Mel Aclaro which goes into even more detail on the possible scenarios.
While I was there, I took the opportunity to refer some people to this article for more information on what’s been going on. Here’s what I posted in threads discussing the new model.
“For those looking for more details/discussions on how the new policy impacts instructors” and “Udemy takes more now even if they don’t spend money to get the person on the platform. Came from an affiliate originally? Udemy will take 50% of future courses after a period of time. Came from another instructor? Udemy takes 50%. Read more here ”, both of which contained links to this article.
This morning, I woke up to a new email from Udemy in my mailbox. Here’s what it said,
Hey Todd,I’m writing to let you know that you have been temporarily suspended from the Udemy Faculty Lounge. If you’re available this morning, I’d like to set up a time today to get on the phone to talk through your concerns and answer any questions that you might have.As you know, the purpose of the Faculty Lounge is to promote a constructive dialogue among instructors and Udemy’s team. This forum is more important now than ever, and we’ve endeavored to maintain that active dialogue, only intervening in a small handful of cases when posts stepped outside the bounds of professionalism. I’d also like to talk through the specific reason why your post was removed, and after we speak we’d be happy to readmit you to the forums.Please let me know when you’re available to speak this morning. I apologize for the inconvenience, and look forward to connecting soon.
Yes, that’s right, linking to this article got me banned again!
Now here’s the thing, had they just emailed me and wanted to talk, I would have actually been ok with that and welcomed the discussion, but instead they banned me from the group first, removed the links to this post and then offered to talk about why I’m not allowed to say these things there.
Why would I want to talk to a company that continually tries to get me to shut up, clearly doesn’t value what I have to say, and doesn’t want to discuss the issue in public?
Who is stepping out of the bounds of professionalism? Me? Udemy? Should I talk to them? If I do, what would you like me to say to ensure your voices are heard?
Let me know your thoughts in the comments.