Whether you're an actor or an animator, an entrepreneur or an electrician, a data analyst or a dating coach, people want to learn how to do what you do.
With an online course, you create and sell educational content as a digital product that people buy.
Online courses are typically broken up into distinct modules or lessons, and usually cover a specific skill, technique, or idea.
With a membership site, you charge a monthly fee that provides members with access to exclusive educational material and content, in much the same way as a subscription-based service.
In this comprehensive guide, we'll be taking an in-depth look at both online courses and membership sites, as well as the pros and cons of each of these popular creator monetization options. We'll be looking at:
- The main differences between the two formats
- The time and effort involved to create online courses and membership sites
- Cost differences to produce content for online courses and membership sites
- How much money you could make by selling online courses or membership site access
Online Course vs. Membership Site: Time and Effort
More than 2,000 years ago, Chinese philosopher Confucius said that if you find a job you love, you'll never work a day in your life again. Although there's a lot of truth to Confucius' timeless wisdom, it's important to be realistic. Regardless of what you love to do, creating content for an online course or a membership site can be a lot of work.
That said, the amount of time and effort involved in creating an online course or membership site varies. Let's take a look at ecourses first.
Online Courses: Time and Effort
In terms of time and effort, online courses can be slightly less effort than creating and running a membership site. There are two main reasons for this:
- Ecourses are typically created and sold as digital products. This means that, once you've invested the initial time and effort into creating your online course, you can “set it and forget it” and wait for the sales revenue to come in.
- Pre-launching an online course is an excellent way of gauging interest in your course before you put in the hard work of actually creating your course materials. By pre-launching your ecourse, you're testing the waters to see if your idea has commercial appeal. If it does—which would be indicated by people signing up for your email newsletter or asking for more information—you know that your effort will pay off. If it doesn't, you've only “wasted” the time and effort it took to put your pre-launch materials together, not the entire course.
- Another way to think about ecourses with regard to the effort involved is to think of your ecourse as an actual product (which it is!). The time you spend researching your material is like the research and development phase many products go through before being sold to consumers. The time it takes to actually produce your content is like the manufacturing time it takes to actually produce your product. However, once the finished product is finally complete, it's ready to be sold — with little further effort necessary. This is one of the main benefits of creating online courses over membership sites; once it's done, it's done.
Membership Sites: Time and Effort
Technically, it would be accurate to say that membership sites typically require an investment of less time than ecourses. However, although membership sites may not take as much initial effort to produce, they take a lot more sustained effort over time. This is because membership sites offer content to the audience gradually.
Regardless of how frequently you publish new content, it's typically released in smaller batches: a weekly blog post or digital download, a fortnightly episode of your podcast, or a monthly video series, for example. Essentially, with membership sites, you're producing less content more regularly, over a period of time.
One of the strengths of membership sites is that your efforts function like a flywheel over time. Flywheels are used in engineering, often to power heavy machinery. Flywheels require a lot of energy to get started, but once they get going, it takes hardly any energy to keep them going.
Similarly, while you might feel overwhelmed producing content regularly for a comparably smaller audience, over time your efforts will snowball, making it much easier for your content to drive engagement, attract new members, and delight your audience. It's similar to getting started on social media. Remember how long it took to reach your first one hundred followers? Now think of how long it took you to go from 100 followers to 500, or even 1,000 followers. It most likely took longer initially because you had to build up that crucial momentum. Growing your audience will probably feel quite similar.
Membership sites are a great way to build an audience gradually with relatively less effort than ecourses. The biggest challenge is that they require a long-term commitment if you're serious about growing your audience.
Time and effort: Which Should I Choose?
Ecourses and membership sites are both ideal for a wide range of content creators, but when it comes to time and effort, which one is best for you?
- If you'd rather create most or all of your course's content upfront and don't want to produce content on a regular basis, launch an online course.
- If you want to build your audience gradually over time by publishing content regularly, launch a membership site.
- If you'd rather sell your content as a packaged, all-in-one product, take the online course route.
- If you'd rather grow revenue over time along with your audience, opt for a membership site.
Online Course vs. Membership Site: Pros and Cons
Now that we've talked a little about the kind of time and effort involved in launching an ecourse or membership site, it's time to take a look at the broader advantages and disadvantages of each format.
First, let's talk about the pros of online courses:
Online Courses: Pros
- Ideal for self-contained topics or subjects, or project-based tutorial content
- Comparatively less effort to create and sell than membership sites
- Higher potential sale price
- Transactional, sales-based revenue structure
- Easier to validate commercial potential of ideas by pre-launching
- Huge potential market
Now that we know what online courses do well, where do they fall short?
Online Courses: Cons
- Revenue growth limited to new sales
- Much harder to forecast/track projected revenue growth
- Difficult to sustain audience engagement beyond initial purchase
- Challenging to differentiate one course from another
So, what about the pros of membership sites?
Membership Sites: Pros
- Perfect for big, ambitious ideas that would be too much for an online course
- Comparatively lower price can be a powerful motivator
- Much easier to forecast/project revenue growth over time
- Easier to identify/track engagement
- Comparably less effort to produce individual episodes/posts/modules
- Exclusivity baked in
- Aligns strongly with changing consumer habits/preferences
Just like their online course counterparts, membership sites aren't perfect. What are the downsides to membership sites?
Membership Sites: Cons
- Lower membership price points mean it can take longer to build sustaining revenue
- Significantly higher commitment of time and effort required
- Mitigating member churn can be very difficult
Online Course vs. Membership Site: Cost Differences
Now that we've taken a look at the strengths and weaknesses of online courses and membership sites, we need to examine how much it actually costs to produce an ecourse and run a membership site.
Since things can get a little tricky calculating the costs of actually producing the content for your course or membership site, we'll assume for the sake of example that our content production costs are static and equal; we'll just be looking at the costs of selling ecourses and running membership sites.
Online Courses vs. membership sites: comparable costs
If we assume that the cost of actually producing our content is the same regardless of whether we're thinking of launching an online course or a membership site, then we need to look at the actual costs of both beyond the content.
- Web Hosting: Depending on where you host your site, the size of your site, and a range of other factors, web hosting can range in price from less than $10 per month to upward of $100 per month for larger sites that require greater bandwidth. This doesn't include domain registration, which is typically billed annually and can change depending on the top-level domain.
- Well-known web hosting services like GoDaddy offer hosting packages starting at around $7.99 per month. Competing services such as HostGator offer even lower hosting fees, sometimes as low as just $3 per month. This is an area in which it really pays to shop around, especially since so many hosting services offer virtually identical packages and plans.
- Email Marketing: Getting the word out about your course or membership site is crucial, and email marketing is one of the best ways to do it. There are plenty of email marketing service providers out there, some of which are relatively inexpensive. However, costs of email marketing can vary widely, as not every provider charges according to the same metrics.
- Some email marketing providers, such as MailGet, charge different fees depending on how many subscribers you have. Up to 10,000 subscribers on MailGet costs $29 per month, whereas a database of up to 100,000 contacts will run you $79 per month. If you choose to go with a third-party email marketing provider, check the pricing criteria carefully.
- E-commerce: Hosting and promoting your course or membership site is all well and good, but what about actually making sales? For that, you'll need to use an e-commerce platform. Many services offer slick, professional-looking digital storefronts, but these services can be costly.
- For example, Shopify is among the more popular e-commerce platforms, but the Basic plan costs a base rate of $29 per month in addition to a 2.9% fee on every item sold and a 30-cent fee per transaction.
- A standard .com domain registration — $14.99 per year
- A mid-tier web hosting package — $7.99 per month
- Basic email marketing services — $29 per month (based on a maximum subscriber limit of 2,500 subscribers)
- Basic e-commerce services — $29 per month
Based on the example figures above, these services and necessary costs would total $806.87 per year.
However, this isn't the whole story. Notice how our example email marketing plan costs $29 per month for up to 2,500 subscribers? If you have more subscribers than this, the cost of your email marketing plan could increase to around $49 per month — that's quite a jump. Same goes for our e-commerce solution. Shopify's basic package costs $29 per month, but the next tier costs $79 per month — an even bigger increase than our email marketing platform.
If you opted for these plans, your yearly costs would rise from $806.87 per year to $1,646.87 — an increase in cost of 68% for very little additional functionality. Oh, and this figure doesn't include flexible costs, such as the percentage of your sales that Shopify takes as a commission or its 30-cent transaction fees, which will also add up quickly — not to mention the hassle of bouncing between multiple sites and dashboards to keep track of everything.
Sometimes it makes sense to use a range of products and service providers to sell your online courses. Power users who want to maximize control over every aspect of their promotional campaigns may well find it worthwhile to pay for a dedicated email marketing platform, especially creators with larger, established audiences. Similarly, content creators with a wide range of digital products may find a third-party e-commerce solution like Shopify meets their needs well. However, it's important to be aware of your options, particularly if you're working with a limited production budget.
At Podia, we want to make it as easy and cost-effective as possible for content creators like you to earn an income selling online courses and membership sites. That's why our two plans offer everything you need to get started selling ecourses. Let's take a look at each of the two plans and how the costs stack up
Podia's 'Mover' Plan
Podia's “Mover” plan is ideal for content creators who want to make and sell online courses.
The Mover plan offers everything you need to sell, promote, and maintain your ecourses in one place. This includes tools to create, sell, and manage your online courses; e-commerce functionality for digital download products such as sales pages and secure checkout forms; email marketing tools to help you reach new customers and grow your audience; and a support team that's here to help you 24 hours a day, seven days a week. Oh, and there are no transaction fees or hidden costs, either
Podia's 'Shaker' Plan
If you're thinking of launching a membership site, Podia's “Shaker” plan is for you.
Podia's Shaker plan offers everything included in the Mover plan, in addition to membership site-building tools. You can create stunning, engaging membership sites to grow your revenue along with your audience, and Podia's intuitive, centralized dashboard makes managing your membership sites and ecourses simple and easy.
Membership sites aren't the only extra feature of Podia's Shaker plan. Podia's affiliate marketing program allows you to create your very own virtual sales team to promote your site or course. Your affiliates promote your content using a unique code, and you choose how much your affiliates earn.
Podia's Shaker plan is ideal for content creators who want to take their content revenue to the next level.
Online Course vs. Membership Site: Differences in Revenue
The final aspect of online courses and membership sites we'll be looking at in this guide is the difference in revenue between the two formats. First, let's examine how revenue works with online courses.
Online Courses: Revenue
As we mentioned earlier, revenue from online courses is primarily transactional. This means that your course is sold in much the same way as a physical product through an online retailer. Whether your ecourse costs $5 or $500, your revenue will be driven entirely by sales of your course. The more people pay for your ecourse, the more money you'll make — it's that simple!
Membership Sites: Revenue
In terms of revenue, membership sites are an entirely different animal to ecourses.
Unlike online courses, which rely on one-off sales to drive revenue, membership sites charge a smaller monthly fee in much the same way as online services like Netflix, BarkBox, Dollar Shave Club, and pretty much every other subscription-based service available.
These companies make money by charging lots of people smaller amounts of money to access their content or products, rather than trying to maximize sales revenue on a per-item basis. Put another way, it might be easier to charge 500 subscribers $10 per month than it would be to sell 50 ecourses at $100 each.
To make these kinds of offers even more tempting, many companies employ a strategy known as “charm pricing,” the practice of making items appear cheaper than they really are, such as selling something at $9.99 instead of $10, for example. This is done in tandem with their subscription business model to further entice prospective customers to cross the line and convert. With its $7.99 basic plan, Netflix is an excellent example of how blending charm pricing with the subscription model can be powerfully effective.
Podia content creator Amanda Boleyn's She Did It Her Way community is an excellent example of how to create and sustain a great membership site. Amanda's content and career advice empowers women to escape the drudgery of their 9-to-5 day jobs and pursue their own business goals as entrepreneurs. As you can see, Amanda updates her membership site frequently, and as the sidebar in the image below shows, members get so much more than just access to Amanda's content; they become members of the Her Way Society, a close, tight-knit community of female entrepreneurs who are actively invested in each other's success.
Although many subscription services are priced with affordability in mind (or, at least, the psychological perception of affordability), some membership sites actively leverage the notion of exclusivity to justify higher price points. This is a powerfully persuasive emotional trigger that can make your site even more enticing.
The other element of membership sites' revenue model that makes it unique is the cumulative effect of subscription revenues. Rather than trying to sell more products, membership sites thrive by attracting more subscribers. This subtle distinction isn't just about measuring success. It should inform everything about how you position and market your content. Remember, you're not just trying to attract new members — you're trying to retain them, too.
It's worth pointing out that Podia's membership sites have one crucial advantage over their online course counterparts, and that's the ability for content creators to bundle additional content into their memberships. This means that subscribers can receive the exclusive members-only content of the membership site, but also whatever other content the creator decides to bundle into membership plans.
Podia content creator Jesse Freeman's Fantasy Console Club membership site is a great example of how this bundling works. While Jesse offers his Game Creator Pro online course as a standalone product, the Pro membership tier of his Fantasy Console Club (priced at just $1 per month) offers all the content you get as a member and access to the Game Creator Pro online course.