For folks who don’t know, MasterClass is a media start-up that offers online classes from the world’s best in each category. It has raised $136M so far and was founded in 2012 by Aaron Rasmussen and David Rogier. Neither of them really had any media or education background. I’m not sure whether they had any special connections to these best talents.
Given the WFH situation, I guess they are seeing a huge uptick in their new sign-ups. I clicked on ads from my Facebook timeline and decided to sign up.
It’s fairly expensive: $180 for an annual membership. For a limited time only, they offer “buy one share one free” campaign (so, the actual price is $90 per account). That’s still $7.50 per month. It’s more expensive than Disney+ and Hulu Basic. The key question is whether MasterClass is worth the money.
MasterClass has significantly less content than other SVOD services. Currently, MasterClass offers 85 classes, each of which runs for about two to three hours. So, the total amount of content is about 212.5 hours. Hulu has 85,000 TV episodes, or roughly 68,000 hours, which is 320 times the offering of MasterClass. Disney+ has 7,000 TV episodes, which is still 26 times the offering of MasterClass.
MasterClass’s production cost is much lower than that of a typical TV series. It’s very impressive that MasterClass has been able to attract top talents such as Gordon Ramsay, Stephen Curry, and Serena Williams. However, I don’t think its fee is higher than the top Hollywood talents. MasterClass does offer very high-quality video production but, compared to most TV series, it’s still amateur.
You might argue that it’s unfair to compare a class to a TV series. Unlike other online education platforms, MasterClass offers only video series (with maybe one PDF per class). There is no TA, no interactive quiz, and no community for students. So, it’s really more of a media company.
If MasterClass’s key value really lies in the instructors it can attract, I’m not exactly sure why it invests a huge amount of effort into producing these videos by itself. This increases the lead time and limits the size of its catalog. Why not make it an audio platform for top talents to upload their own content?
Let me introduce another platform, called “Dedao,” from China. It offers subscription content from top talents in China. It has both video and audio but most of it is self-produced by the talents. The platform has close to 200 classes and more than 2,000 audiobooks. Based on the few classes to which I subscribed, I estimate that each class generates an annual revenue of about $1-1.5M for the platform. Assuming the platform takes a 30% fee, Dedao’s net revenue should be around $100M. This must be much higher than MasterClass’s revenue—and Dedao’s COGS is much lower.
If you are still interested in subscribing to MasterClass, here are some classes I enjoyed.