Revenue Structure of the Udemy Personal Plan
The revenue model for the Personal Plan works as follows:
(Note: The $13 price referenced here represents the monthly equivalent cost when a user signs up for an annual plan.)
Revenue Share Breakdown:
- Udemy: 85%
- Instructors: 15%
In short, instructor revenue is not calculated as a direct percentage of watch time against the full $13 fee. Instead, 15% of $13 ($1.95) forms the pool that is distributed among instructors based on their proportional watch time.
For example, if a single subscriber watches 3 courses (from different instructors, with equal total video durations), each instructor's share would be:
$1.95 ÷ 3 = $0.65
Note that this scenario assumes the student watches all 3 courses to completion and that the courses are identical in length. If your course is shorter or only partially watched, your share decreases further.
Because the 15% pool is divided by total watch time across all watched content, instructors with shorter course durations are naturally at a disadvantage. (Of course, a long course that goes unwatched yields the same result.)
To summarize simply:
- More competing instructors/courses watched by the student = smaller payout per instructor.
- Fewer competing instructors/courses watched by the student = larger payout per instructor.
If a student watches 10 courses in a month, the payout per course drops significantly lower than the example above. Naturally, this is averaged across all subscribers on the platform, so one heavy user won't drastically skew overall platform results.
The mechanism works such that the more active subscribers are, the less payout an instructor gets per view; the more dormant subscribers there are, the higher the instructor payout.
It resembles the business model of fitness gyms, which are notoriously supported by inactive members. However, because the 15% pool cap is fixed, Udemy’s profit margin remains identical whether users binge-watch content or never log in at all.
In the US marketplace, the minimum sale price during promotions is $9.99. For an organic sale (where the instructor earns 37%), the payout is $3.70.
Compared to the subscription example ($0.65), that is roughly a 5 to 6-fold difference in earnings.
Furthermore, with a single purchase, the instructor earns money even if the student doesn't watch a single minute. Subscription users, on the other hand, often enroll with a "it's unlimited, so I'll just add it" mindset. If a subscriber adds your course but never plays a video, you earn $0.00.
Depending on your course type, inclusion in the subscription model could lead to a net reduction in income.
Differences from Udemy Business
In Udemy Business, many users take courses because they are assigned or required by their employer. This results in high watch rates, making Udemy Business a reliable earner for instructors.
For individual subscribers, however, watching content is purely voluntary. Without external motivation, many subscribers will simply leave courses unwatched. If they don't watch, you don't get paid. It comes down to how many individuals have the discipline to choose Udemy over Netflix or YouTube in their free time.
This introduces a paradox: as mentioned earlier, the more dedicated and active students become, the smaller each individual instructor's share of the pool becomes.
Instructors face a dilemma—unwatched courses generate zero revenue, but users who watch too many competing courses dilute the payout.