In a constantly evolving world, mediated by drastic improvements in technology, universities are falling behind in offering students skills that are in-demand by employers. In an attempt to bridge the educational gap, online learning platforms have appeared in the last 6 years each with the same goal: providing students with in-demand skills and knowledge that is sought by employers. In this article, we analysed Udemy, one of the many online-learning platforms that are available to consumers.
Udemy is an online learning platform founded in 2009 with the goal of enriching people’s lives through learning. With its headquarters in San Francisco, California, Udemy boasts over 65,000 courses in an ample number of fields – from technology, graphic design, video production to self-branding and entrepreneurship. Rather than offering academic courses, Udemy offers skill-based courses from individuals. Udemy allows virtually anyone with a webcam to set up a course on their platform. What drove the steep increase in courses from 2009 up to 2018, are the monetisation opportunities offered on the platform.
Udemy operates in the online-learning market, characterised by multiple platforms offering massively open online courses (MOOCs). The online-learning industry has risen into prominence in 2012, with platforms like Coursera, EdX and Udacity all launching in this year. The online-learning industry is characterised by online platforms that provide educational content through multimedia tools, such as smartphones or laptops. A primary characteristic of online e-learning platforms, is exponential scalability. While conventional institutions are constrained by classroom sizes, online courses can host hundreds of thousands of students (Coursera for examples sees an average of 43,000 students enrolled in a given course), that can take the course from any location at any time. Another key identifying characteristic of the content offered in the e-learning industry is flexibility. Students follow the content at their own pace, allowing for a more customised learning experience.
The online learning industry can further be narrowed into more distinct sub-sections. Three of the most notable sub-markets are mobile learning (characterised by learning primarily on smartphone devices), Online Corporate Training (characterised by online resources offered by third-party instructors or experts) and MOOCs in Corporate Training (online resources created by a company’s employees to facilitate knowledge share across business units and functions).
Udemy’s Business Model
Udemy offers a wide array of courses taught by instructors. Virtually anyone with a webcam and a laptop can sign up as an instructor and create a course. As such, Udemy can be seen simultaneously as an online-learning platform and an online marketplace. This section will analyse Udemy’s business model as two separate entities – as an online-learning platform and as an online marketplace.
Udemy employs a pick-and-pay business model, whereby users view courses offered on the platform, make a decision and pay for the chosen course(s). In an attempt to facilitate the decision-making process of their users, platforms under this pricing model offer their users previews of the courses before they make the purchase. Pick-and-pay pricing models provide users with advantages over subscription-based models. Some users may only want to take a single course as opposed to having access to the whole bundle of courses under a given track. This allows the consumer’s investment to be considerably smaller for a given course. Additionally, once the single instalment for the course has been paid, users have access to the course’s content for an indefinite period of time, without having to pay additional fees.
Unlike other platforms, Udemy allows anyone with a webcam to set up a course on their platform. The platform is characterised by two actors:
- Content creators, who create courses in a given topic and whose goal is to monetise said course,
- Buyers/Students/Users, who buy courses offered on the platform.
As a result, Udemy acts a marketplace that connects content creators, who possess skills in a given topic, and buyers, who want to learn a given skill. The platform offers monetisation opportunities for their content creators, by allowing them to price their courses as they see fit.
Udemy is an interesting competitor in the online-learning market. Together with Lynda, they are the only platforms that act simultaneously as online-learning and online market platforms. Despite the relatively saturated market, the online-learning industry is set to reach over $300 billion in revenues by 2025. With traditional higher education establishments not being able to keep with the fast-changing skill requirements in the labour market, online learning platforms are well along the way of disrupting current notions of higher education.
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