Are Online Courses Still a Good Business Model in 2020 & Beyond?

Are you thinking of launching an online course? Or are you already building an online course business and wondering what the future holds?

There are some big changes happening in the online course landscape. Your chances of surviving and succeeding in this space will depend on whether you understand these changes... and how you respond to them.

In this post, you'll discover the 6 things you need to know about the future of the online course business model and the 1 thing you need to succeed in 2020 and beyond.

More...

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1) Online Courses Are a Growth Market

By all indications, this is a growing and thriving market. Here are just some examples to illustrate the point:

Course platforms like Skillshare, Masterclass and others have been experiencing significant growth in the past years, based on Google Trends:

What we can see clearly from this data is that a lot of money has been flowing into online course businesses. In addition, interest in online courses seems to be at an all time high.

All of the above is data related to large online course platforms. That's because this data is available publicly in some cases and relatively easy to estimate in others. It's much harder to know how individual, small scale course creators have been faring.

For individual course creators, all this growth has it's upsides, but also serious downsides, which we'll get into as well.

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2) Online Courses Are Being Normalized

Not too long ago, a major obstacle any online business faced was that people didn't know whether they could trust them with their credit card details. Buying things online wasn't the norm and only early adopters dared take the leap.

Soon enough, buying stuff online became just as mundane as popping down to the local shop. In fact, for many, it became the norm.

Online courses have experienced a similar transformation. Online courses are becoming a common and normal form of education. Paying for an online course feels less risky or shady than it did even a few years ago. And not least, thanks to better technology and course platforms, the customer experience is often a lot better than it used to be.

All of this is good news for any online course business, whether large or small, mainstream or niche.

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3) Creating Online Courses is (Technically) Easier than Ever

If you wanted to launch an online course 3+ years ago, you faced some serious technical challenges. How can you set up a course area, connect it to a payment processor, make sure only the paying customers get access and so on? How do you create, edit, encode and upload video content for your course?

Instead of having to jump through countless hurdles, there are now easily accessible and affordable solutions for all these problems.

And as a course creator, you have far more options open. You can choose to publish on a platform like Udemy or Skillshare (where you'll likely reach more customers, but earn less money), you can use an all-in-one course platform like Teachable or Podia or you can roll your own solution using WordPress and a plugin like our own Thrive Apprentice.

This is good news for course creators because it means you can focus on your content instead of dealing with technical headaches.

So far so good. Unfortunately, it's not all good news...

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4) There's More Competition & Price Pressure Than Ever

A downside of all these developments is that for course creators, there's now more competition than ever.

One of the results of all this competition is price pressure. Udemy is a good example of this. While there are higher-priced courses selling on Udemy, it's also clear to see that on almost any topic you can imagine, you'll find dozens if not hundreds of courses on offer for around $10 each:

Many udemy courses for $9.99 each

Courses on Udemy often sell for a very low price.

Another example is Skillshare, where you can get access to an entire course library for as low as $9/month.

As a course creator, you have to be aware that potential buyers may be weighing your course against a $10 alternative on Udemy or against a course they can get at no additional cost with their Skillshare subscription.

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5) Platforms Will Move to Monopolize the Market

The nature of Internet businesses is that markets tend to consolidate towards as much of a monopoly as they can get away with. See: Amazon, Google, Facebook. The winners in a market exploit network effects and economies of scale to capture the majority of a market and buy up or crush competitors.

This will be happening in the online course space as well. Businesses like Masterclass and Skillshare are based on a subsciption model and aim for wide appeal. Their goal is to capture as many potential buyers in the online course market as possible and extract as much value as they can (we'll see some interesting pricing shifts happen, once their growth slows down).

This is good for the winning platforms, but not for individual course creators. On a platform that's buzzing with competition and that attracts customers at a low subscription cost, it's difficult to make a living as a creator.

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6) The One Thing You Need to Succeed as a Course Creator...

All of this leads to one conclusion above all: as a course creator, the most important thing you must focus on in 2020 and beyond is differentiation.

Whatever you do, don't create a generic online course!

If you want to make a good living as a course creator, you need to be able to command a reasonable price for your work. Ideally, you can create high value courses that you sell for $100, $200, $1,000 or even more. It's generally much easier to convince 1,000 people to pay you $1,000 each than it is to convince a million people to pay you $1 each.

With a generic offer, you simply cannot command a high price, because there's no reason to pay you $100+ for a generic course when I can get one for $10 elsewhere.

The most important question you must address is "why this course instead of a competing one?"

And you must address this question in your course content, in your marketing material, on your sales page, in your ads...

Course creators who can create highly valuable programs and frame those programs as unrivaled will win.

This is exactly what we've done to succeed with course launches. We've launched a productivity course, an SEO course and an online business course with great success, in the last 12 months. A lot of the marketing we did for these courses was about emphasizing all the ways in which they are unique and different from competing products out there.

And it paid off. Although we don't have a control group of generic courses to compare against, it's not difficult to see that people who sell generic courses on crowded platforms aren't nearly as successful as we've been with our courses.

Over to You

So, that's my take on what's happening in the online course business space and how to succeed in the future. What are your plans in 2020 and beyond? Do you plan to start selling online courses? Do you already sell courses and are you planning to do anything different this year?

Let me know by leaving a comment!

Shane

P.S.: If you want to learn my exact strategy for a lean and rapid online course launch & discover my pricing "secrets", click here to learn more!

Author: Shane Melaugh

Shane Melaugh is a co-founder and the CEO of Thrive Themes. When he isn't plotting new ways to create awesome WordPress themes & plugins, he likes to geek out about camera equipment and medieval swords. He also writes about startups and marketing here.

  • Is it possible to active an Affiliate option in Thrive Apprentice plugin? I think that a one-time payment is better for a premium course than a monthly basis membership.

    • Danielius G says:

      I don’t think that thats on the Apprentice plugin side. I personally use Woocommerce for purchase processing and there are loads of Afiiliate plugins for Woocommerce :)

      So it goes like Whatever purchase processor/eshop/whatever you use -> Affiliate plugin/function of that -> Apprentice.

  • Jason Weaver says:

    I plan on finishing my course but making it free and a lead generator for my paid 1 on 1 couching. Might leads to a more premium course later.

    • Shane Melaugh says:

      Sounds great! All the best with your business in 2020!

  • Judy Michaud says:

    Thank Shane and Happy New Year. Good advice.

    • Shane Melaugh says:

      Thank you, Judy! Happy new year!

  • Jonathan says:

    Hi, Shane. Great video and topic plus I almost agree with everything you you had to say.. One thing why should be people look at building a course using WordPress instead of one of the leading course SaaS platforms? Also the video wouldn’t play in Firefox I had to use Chrome .

    • Shane Melaugh says:

      Hi Jonathan,
      WordPress vs. SaaS always comes down to ownership. Do you want to own your platform and content? Are the downsides of having to take care of your own technical setup worth it? With a SaaS, things are usually easier, more expensive and outside of your control. The SaaS provider can decide to change their pricing and you can’t do anything about it. They can decide to “pivot” because their business isn’t doing well enough and then you have to start all over again, somewhere else.

      In both cases, there are upsides and downsides and one has to weigh them against each other.

  • Carolin says:

    Wanted to use Thrive Apprentice plugin to create my course, but ran into issues so now using Teachable, which looks more profi so I can ask higher price. Still hoping you will modify the layout and user friendliness so that I can use the plugin again. Hope 2020 will be a good year!

    • Shane Melaugh says:

      Thanks for your comment! I hope Thrive Apprentice will eventually be able to entice you back. :)

  • Hello Shane,

    Thanks for this article. Like a lot of your reader i’m living with the courses I’m creating.

    I have a question: do you think it’s good to create one or two courses one those plateform (Udemy) in order to get more visibility or it’s not a good long terme strategy?

    Thank in advance!

    Julien

    • Shane Melaugh says:

      I’ve been wondering that as well. I don’t know how well visibility or exposure on Udemy can translate to more “real” business. But I may experiment with that myself, to find out.

    • Cyndi says:

      After reading all the comments, it seems clear that part of differentiation is branding yourself and developing your own following and email list, first ideally. Then you will have trust and authority with your following so launching a course, without using a platform, should get you more targeted students than a large platform might supply.

  • Dave says:

    I had a website with decent targeted traffic teaching guitar back in ’08 — but faced the technical hurdles you mentioned above.

    Now, in a different space, my wife and I have been creating an online course together. We’re nearing completion (I’ve also purchased the licensing for Thrive Apprentice).

    As a musician, I’ve faced this “Wal-Marting” for much of my creative life. I just recently took down all my music from Spotify, etc. in order to sell it directly to fans of my music.

    It’s easy to be discouraged when thinking about what you’re discussing, Shane. However, I think you’re absolutely right. And it’s better to face the music. Somehow we need to find ways to not only create value — but also communicate that what we’re offering is uniquely valuable. I believe it’s possible. A combo of grit and continued learning.

    Cheers! Now I need to go meditate…Lol

    • Shane Melaugh says:

      Thank you for your comment, Dave! You’re in a tough spot indeed. Like you say, it’s a walmartisation of sorts. Music is seen as a commodity these days and it’s really difficult for independent artists to get well rewarded for their work.
      My question here would be: what are other independent musicians doing? Who’s doing it successfully and how are they doing it?

  • Karine says:

    Thanks Shane! That is so true! Yes my third online class is coming out in february and I have been working SOOOOO hard on it for one year. I think it does respect everything you just say so I hope I have my peice of the pie! Keep you hard work, you’re amazing!!!

    • Shane Melaugh says:

      I wish you the best of luck with your course launch!

  • David A says:

    Great video as always Shane. I love the idea of differentiation. Just finished the overhaul of my training website and it’s a big part of my business model and is featured prominently in our growth plan. I will revisit my courses and add differentiators.

    Thanks for another great video.

    • Shane Melaugh says:

      Glad to hear you found this useful!

  • Andrey says:

    Shane, yes the online education market is growing. People get used to paying for courses. This is happening all over the world. It’s good that there is always an opportunity to do better than global players do! After all, they are so global that they don’t know exactly our client :-)
    Thank you for this inspiring post! Great 2020!

    • Shane Melaugh says:

      Thank you for your comment, Andrey!

  • Bob Sommers says:

    Great video. Thank you.

    • Shane Melaugh says:

      Thank you, Bob!

  • Peter Whent says:

    You are so right Shane. It is like any product life cycle. Online courses are entering a more mature phase and people who just try to do what is working for other people are joining a noisy conversation. You have to be different and start your own conversation. One that no-one else can join. I am in the process of creating an online course, from a workshop I have been running off line for a year. It teaches tech founders how to turn their brilliant ideas into compelling, differentiated propositions that makes potential customers say “Wow, I must speak to that company”. Maybe my timing is good! Maybe there is an angle in the online course market :-)

    • Shane Melaugh says:

      Having taught the material offline first definitely gives you an advantage. With that, you have already validated demand for the product and you already know how to teach. So it’s a great start!

  • Bakari says:

    I have a course on Udemy that has made me money over the years, and I also sell it through Gumroad. I’m now setting up the course with Thrive Apprentice and MemberPress, along with other courses I create this year.

    One of the ways I’m trying to make myself standout is to offer online coaching and by providing downloadable resources that go along with the courses. I agree, that if you use Udemy and Skillshare, you’re not going to make a lot of money unless your course sells are in the thousands.

    I think consumers have to realize that content creators need to be supported for the work we do, and there’s also overhead associated with what we do. Thrive plugins for example are part of my overhead. So it’s not easy to just give a course over to Udemy and they cut the price down to $10 and still take a percentage of the sell. I ideally like to sell my course for $40 ($20 on sale), but I’m not really pleased about selling it for $10, so I try to advertise much that it’s on Udemy.

    Thanks for your insight about the direction the online course building is going.

    • Shane Melaugh says:

      Thanks for your comment! Unshackling yourself from Udemy is probably a great idea, yes. I wish you the best of luck with this transition!

  • Mathieu says:

    Thanks for this video! I’m a consultant and work with several non-profits. The common theme I see is the lack of training for board of directors. I plan on creating my course this year on training for non-profit board of directors. Using your course I signed up for earlier last year as the template to develop, produce and distribute it.

    • Shane Melaugh says:

      Sounds like you’ve already taken the right steps to clearly identify a niche. The specificity of the course + your hands-on experience can be strong differentiators for something like that. Another question I’d try to answer before starting on a course is: how many people are there in the target market and are they willing to buy a course to solve this problem?

      • Mathieu says:

        Great thoughts, Shane. It’s definitely something executive directors have said to me they wish they had but I’ll do some more investigation around what exactly they’d like to see and if they’d buy it.

    • Cyndi says:

      You might also check elearningindustry.com as a resource to tap into existing corporate training, ie, maybe you can sell your course via their platforms.

  • Bodine B says:

    Hello, Shane.
    I love the strategic wisdom you are in the business of sharing with us.
    I am now watching one to three of your videos each day, and shall continue to do so.

    > Your main question in this post – “Why this course instead of a competing one?” – is the main question to ask for marketing/selling anything online.

    And your influence has planted this question in my mind.

    I love this question because it stimulates me to consider: What the primary BENEFITS are of what I am offering? . . . and, Which of those benefits do my prospective customers consider most valuable?

    Thank you for what you are doing.
    You are really helping me.

    BODINE

    • Shane Melaugh says:

      Thank you! I’m happy to know that you’re getting good value out of my content. :)

  • nick says:

    Thanks for this info. How easy is it to learn thrive apprentice? Is there step by step training?

    • Shane Melaugh says:

      Like all our plugins, we try to make it as easy as possible to use, with tips built right into the user interface. And we have an extensive knowledge base in which we try to answer all common questions.

    • Dermod Wood says:

      I’m an old f**t of 78 Nick, and I can use it. It’s a great platform and well-worth the annual fee.

  • Darin Johnson says:

    Courses are nice, but any update on the New Theme 2.0?

  • Gerald E says:

    Excellent video and article Shane. I took a lot of insights from your online course creation videos and just launched my differentiated online course this new year. Thank you for all that you do.

    • Shane Melaugh says:

      Great to hear! Congratulations on your course launch. :)

  • I plan several courses

    • Shane Melaugh says:

      Thanks for your comment, Ronnie! I wish you all the best with your course launches this year. :)

  • Cherlyn says:

    THANK YOU! This is scary, but I’ve bought $15 SEO courses I never took a second glance at AND also bought your SEO course which I plan to actually go through. It’s really because Thrive Themes is already such a great product, and there was already so much trust there.

    I’ve been waiting for Thrive Apprentice to be developed further without the need for SendOwl. As in, we can just add members and their email addresses with or without a payment gate. Also hoping there could be a Drip course feature.

    If this comes as an upgrade to the Thrive Themes membership I would be so happy to pay it. Just saying. :)

  • Peter Hiebl says:

    Yes I am working with preasure to get my coaching done in 2020 (first edition).

    It’s pretty true to survive the red ocean it is better to create your own blue ocean. ????

    Udemy is pretty helpful but the price dumpung as a creator very scares me sonetimes. ????

    • Shane Melaugh says:

      Exactly, yes. Create your own blue ocean instead of struggling to survive in the crowd.

  • Erik I says:

    Thanks Shane.

    I’ve found that several people are using Udemy to promote their courses. If the customer is satisfied, they will go over to the teacher’s website, where the prices are higher. But now the customer knows the teacher and hopefully wants more.

    For me to see we need to be more an expert / guru than a teacher. Everyone can teach, if they just read a little about the stuff. But few, like the experts, can provide more in-depth instructions. Where knowledge must come from within.

    So be more of an expert than a teacher.

    Happy New Year to all of you.

    • Shane Melaugh says:

      Thanks for your comment, Erik! I think using a platform like Udemy as a form of lead generation, like you describe, makes a lot of sense!

  • Christine Sauer says:

    Hi, Shane, great tips. I love Thrive themes, by the way. My question: If I build my high-value personalized course on apprentice with lots of videos embedded (from youtube), doesn’t that slow my website down?
    I’d love to hear about your experience. I currently have my course in a free thinkific legacy accunt, but would like to transfer it to my website, but found that people drop off when it is slow (I host my sites on bluehost). Any tips? Thanks!

    • Shane Melaugh says:

      Hi Christine,

      Your Apprentice course doesn’t impact your overall site speed at all, no. Thrive Apprentice only affects the course pages themselves.

  • Fran says:

    Hi Shane

    Your SEO Sprint course helped me to differentiate myself so well. After years of moving around in a saturated marketplace, I’m now finally able to position myself in a niche which is well sought after without competition. And now I’m building my course for this niche.

    I’ve tried many platforms over the years and have reverted to my own website using Thrive Themes, of course :-) Hanna’s ‘old’ video on a free mini-ecourse, is a great idea for a lead generator. Giving potential buyers a taste or preview of what to expect from a teacher.

    Thanks for sharing so much great knowledge.

    • Shane Melaugh says:

      Thank you for your comment, Fran! I’m happy to hear that our content has helped you make progress like this. And congratulations on that!

  • thom says:

    Great, relevant material here! We are launching new courses this year and your research goes right along with ours. It confirms what we’re finding. Thank you. The future can be intimidating, but it is exciting too!

    • Shane Melaugh says:

      Glad to hear it, Thom! Good luck with your course business in 2020! :)

  • jorunn-her23 says:

    Hi Shane! Yes, the online course market is getting saturated. I am noticing that there are more and more people offering online courses on making online courses :-) so that says a lot, and definitely the competition is getting tougher. But, as you say, the answer is offering thorough courses with quality content, and offering something different and even more specific than what everyone else is.
    I had made a few free guides/courses using Thrive Apprentice before I signed up for Course Craft, and last year I bought your excellent course on creating online courses. And it really helped me when deciding to start making premium courses and really develop that side of my business. I have followed all your advice in this course, I learned so much and in November 2019 I launched my first premium/paid course. It is a very thorough course (more than 40 lessons, text and video) for a very narrow niche of target customers, so it is super specific and not aimed at a big audience. I had a very small mailing list, and following your plan for launching the website, I emailed the ones I target with this course. And I’m happy to report that from my very small mailing list, I have sold to 15 customers so far (in one and a half month), at USD 200 each. And I have gotten so much positive feedback from customers who have bought the course! (Using Thrive Ovation, of course). Encouraged by this, I am now planning on making more online courses for different narrow niches within my field in 2020.
    Thanks again for providing thorough, no-nonsense, comprehensive content. You are a living example of what differentiating is all about.

    • Shane Melaugh says:

      Thank you for your comment! I’m happy to hear that Course Craft helped you launch your first course! I wish you all the best growing this side of your business in 2020. :)

  • David B says:

    Great post, Shane, thanks and happy new year!

    • Shane Melaugh says:

      Thank you, David! Happy New Year!

  • Carlos Alvarez says:

    Hi Shane,

    I’m planning to launch a course on 2020.

    So I was wondering if I need to take the Thrive’s Course Craft in order to have the nuts and bolts on how to do it correctly?

    Look foward to hearing from you,

    Carlos

    • Shane Melaugh says:

      Hi Carlos,

      You don’t have to take our course to figure it out. I like to think that it helps and is a fast-track past some mistakes many people make when starting out. But you can definitely figure all this stuff out by yourself.

  • Alex says:

    That’s a very interesting article, Shane! Under point 5), you write: “(we’ll see some interesting pricing shifts happen, once their growth slows down)”

    Could you elaborate on this? What kind of pricing shifts? Thanks!

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