Online education prices are going up—and they should.
A few years ago, I could name only one online education membership that was hundreds of dollars per month. Now, almost everything I see in the B2B space is at that price point, and B2C isn’t far behind. Programs that used to top out at $1000 are triple that or more. Group coaching rates nearly doubled.
What we’re seeing is a critical market correction, one that finally admits what teachers have long known: technology does not replace people.
Online education has been been sold as a way for coaches, creators, knowledge workers, and service providers to make more more money while working less. It’s also touted as a way to help more students at a lower cost, and as such the focus has been on scalable programs that leverage recorded lectures and digital assets to teach many more than a single real-life classroom could hold.
Course and membership design is changing
Originally, many of these courses were self-paced, the Massive Open Online Courses (MOOCs) of Coursera and Udemy. They removed teachers from the equation once their knowledge had been extracted, counting on gamification and slick interfaces to propel students along. Those programs are now notorious for low completion rates, and have fallen out of favor as customers have become more savvy and less willing to pay for a bunch of videos when YouTube is free.
More recently, the classroom model itself has been rehashed as cohort-based courses, a spin that harnesses group momentum and time-limited access to encourage completion. I’ve also seen an increase in educational group coaching programs, where there is some core content but the focus is on feedback and support from subject-matter experts.
Memberships, too, used to be built on new content every damn month, but many have shifted to a flipped classroom model that includes self-study materials but with a live and community-driven focus on implementation and problem solving over consuming.
And this is why prices are going up: even online, we need human teachers, not just recorded videos, for students to get results.
Instead of the leverage of online learning being in fully scaled education, the leverage is in the inherently reduced overhead that any online business can take advantage of.
Online schools means no rent, no building maintenance, no grounds to manage, lower insurance fees. Even the most robust online program would have a hard time spending as much on their software and web tools as an in-person program does.
This means that more of the revenue can go directly to instructors, which can lead to better instruction because teachers are able to focus on teaching and not on administrative tasks.
But teachers do cost more money than a video.1 It costs money to be present, to answer questions, to offer feedback, to coach and to motivate and to guide. And of course it costs time, time that can’t be spent marketing or selling or working with higher revenue clients or having a job.
If students need teachers, and teachers need to get paid, then the price is going up.
Online customer acquisition is harder than ever
Additionally, it’s actually getting harder, not easier, to get online customers. We’re at a transitional point with social media where platforms are melting down and trying (belatedly) to find alternative revenue streams beyond data mining and advertising.
This matters for online educators because much of the business model that was sold up until 2021 was lower cost, lower touch offers that require hundreds if not thousands of customers to create sustainable revenue.
We’re in the long tail of decline now; unless there is US government action against TikTok, or some antitrust actually sticks on Meta, we’re likely to have these platforms for some time to come. But virality is somehow both mundane and out of reach, no longer impressive but not guaranteed to bring a buying audience. And ads are more expensive and less effective than ever. We need to anticipate a different future.
I actually think this is all a good thing. The online course gold rush is in its death throes; the rare times I actually have the Instagram app on my phone it’s so clear to me, as my feed is flooded with desperate ads from dozens and dozens of copycat coaches and service providers trying to scoop up whatever business they can before it all crashes.2 Many of the people who hopped online to teach in 2020 are realizing that it’s harder than it looks, and that the initial pandemic years were an outlier when it comes to engagement, interest, and sales.
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Instead, we have a new opportunity. The promise of fully scaled online education has proven to be false, meaning we need more—not less—human interaction to help facilitate outcomes for our students. And, it’s harder than ever to get huge audiences of raving fans.
So the price is going up, and as a result we will need fewer customers to reach sustainable revenue levels.
Scalability is a tool, not the solution
I don’t want to abandon the principles of scalability. Time leverage and low overhead are foundational reasons to have an online business at all. But if we shift away from trying to maximize those things, and instead maximize customer results, we’ll all have more sustainable business models that can survive for the long haul. That will also enable us to maintain high-quality free work, and have the financial stability and scalable systems to offer scholarships or implement other accessibility models.
But if we can’t just spend $100 on Facebook ads and get dozens of qualified leads, we have to actually talk to people. We need to lean on our humanity instead of trying to automate it away.
We also need to actually teach, in public, in places where we can be found. We need to teach in ways where people are excited to share it, to pass around the information, to say to each other, “look what I found!”
Ultimately, this is an opportunity to develop our skills and this industry to the next level, a place where I believe integrity and competence will beat creepy ad copy and the relentless pursuit of volume. And that can only be good for customers: if we make better work, they will learn more, and that will have untold effects on futures we can’t even imagine.
A quick search for the average costs of making video trainings shows upwards of $10,000 for an hour of video. While that’s pretty high and implies professional-level videography, it does demonstrate the effort required to make compelling scaled educational content. For most online educators, we’re probably looking at closer to $1000-$3000 per hour, but that will depend on your hourly rate and if you need to hire as well.↩
I have compassion for it! We all need to get paid. But it is fucking dire on that app.↩