Udemy is one of the largest online learning platforms in the world. It changed the way people learn skills by allowing anyone—from beginners to professionals—to take courses anytime, anywhere. Unlike traditional education systems, Udemy works like a marketplace. Instructors create courses, and learners from around the world buy them.
This simple idea helped Udemy become a massive global platform with millions of students and thousands of instructors. But how exactly does Udemy earn money from all this activity? Let’s break it down.
The Core Idea Behind Udemy
Udemy’s foundation is built on one principle: knowledge should be accessible and affordable for everyone. Instead of hiring teachers directly, Udemy lets independent instructors create courses on any topic, including:
- Coding
- Business
- Marketing
- Personal development
- Health and fitness
- Design
- Music
- Language learning
This open marketplace model gives learners huge variety and gives instructors a platform to earn money without needing a physical classroom.
Udemy handles the technology, the global reach, the marketing tools, and the platform maintenance. Instructors handle the teaching. This shared responsibility keeps costs low and allows rapid growth.
How Does Udemy Make Money?
Udemy earns money mainly from course sales and enterprise subscriptions, supported by a few extra revenue streams. Here’s a detailed look at each one.
A. Revenue from Course Sales (Primary Income Source)
Whenever a student buys a course on Udemy, the platform takes a percentage of the money. The percentage depends on how the student discovered the course.
Three main situations determine Udemy’s cut:
1. Organic Sales
If a student finds the course through Udemy’s website, search bar, recommendations, or app, Udemy takes a large share of the revenue.
The instructor gets a smaller share because Udemy did the marketing and brought the student.
2. Instructor Promotions
If a student joins through the instructor’s referral link, Udemy gives a bigger percentage to the instructor.
This encourages teachers to promote their own courses.
3. Paid Marketing Sales
Udemy also advertises courses through Google Ads, Facebook ads, and other marketing platforms.
When a student buys through these ads, Udemy keeps a larger cut to cover the marketing cost.
This flexible revenue-sharing model helps Udemy maintain high traffic while giving instructors different ways to earn.
B. Udemy Business (High-Value Subscription Revenue)
One of Udemy’s strongest revenue engines is Udemy Business, a subscription-based service designed for companies. Businesses pay Udemy annually so their employees can access a curated library of thousands of professional courses.
Udemy earns money here in two ways:
- Subscription fees from companies
- Revenue sharing with instructors whose courses are included
This model is extremely profitable because:
- It brings predictable yearly income
- It attracts large clients like PayPal, Netflix, and Tata
- Companies need continuous employee training
Udemy Business is now one of the fastest-growing parts of Udemy’s entire business.
C. Advertised Course Discounts and Flash Sales
Udemy is known for heavy discounts—courses often appear at huge markdowns. These flash sales bring massive traffic and high-volume purchases.
Even though prices drop, Udemy earns well because:
- Students buy multiple courses
- Volume increases even when individual prices are low
- Courses are digital—no extra cost for additional students
This discount-driven model has been central to Udemy’s global success.
D. Udemy Paid Marketing Services
Some instructors choose to promote their courses using Udemy’s internal advertising tools. Udemy runs ads on various platforms and charges instructors by taking a cut from the course sale.
The more instructors promote their content, the more Udemy earns.
E. Mobile App Purchases
When students buy courses through the Udemy app, Apple or Google takes a platform fee. Udemy still earns a share from these in-app purchases, creating another steady revenue stream.
F. Instructors’ Marketplace Fee
Udemy charges instructors a small fee for hosting, delivering, and distributing their courses. This fee is included in the revenue split and helps Udemy maintain its huge global platform.
Why Udemy’s Business Model Works?
Udemy’s model is successful because it’s simple, scalable, and low-risk.
a. Marketplace Advantage
Udemy doesn’t create courses itself. Instructors do the hard work. Udemy only provides:
- The platform
- The marketing
- The global audience
This keeps operating costs low while allowing massive growth.
b. Unlimited Course Variety
There are courses on almost everything—from Python programming to cooking to meditation. This attracts a huge and diverse user base.
c. Global Reach
Anyone from any country can learn or teach. This creates a cycle of continuous growth.
d. Recurring Revenue from Udemy Business
Corporate subscriptions add stability, making Udemy less dependent on seasonal sales.
e. Low Cost per New Student
Digital courses can be sold infinite times without additional cost. This gives Udemy very high profit potential.
Challenges Udemy Faces
Even with a strong model, Udemy deals with:
- Tough competition from Coursera, Skillshare, Upgrad, and YouTube
- Low course completion rates
- Heavy dependence on discounts
- Quality control issues due to too many instructors
Still, the marketplace model keeps Udemy flexible and resilient.
Conclusion
Udemy makes money mainly through course sales, corporate subscriptions (Udemy Business), instructor promotions, app purchases, and marketing services. Its marketplace structure allows instructors to upload courses while Udemy handles technology and global reach. This keeps the platform profitable and scalable.
Because of its variety, accessibility, and strong branding, Udemy remains one of the world’s leading online learning platforms.
