Masterclass, an online learning platform known for recruiting high-profile celebrities to teach courses, is experiencing a decline in subscriptions. The company has reportedly spent large sums of money to hire A-list celebrities such as Disney CEO Bob Iger and recreate their office spaces for filming purposes. The cost of hiring Iger, building the set, and shooting the course amounted to approximately $850,000. Despite the initial success of the platform during the pandemic, Masterclass has faced challenges in maintaining subscriber growth, leading to shorter classes, fewer high-profile instructors, and increased outsourcing of filming and production work. The company has also undergone multiple rounds of layoffs, reducing its workforce by more than 50%.
In response to the decline in revenue, Masterclass has implemented cost-cutting measures and reduced its subscription price from $15 to $10 per month. The company aims to make its platform more accessible to a wider audience and unlock the potential of its members. However, it remains to be seen whether the lower prices and shorter videos will be enough to attract new subscribers. According to a survey by Parks Associates, only 47% of households subscribed to over-the-top (OTT) services in the past year, indicating a challenging market for streaming platforms. Masterclass is adjusting its strategies to navigate these changing dynamics in the online education industry.
Despite the challenges, Masterclass continues to announce new courses, including an improv class led by comedian Amy Poehler. The company is focused on adapting its content and formats to meet the evolving needs of its audience. However, with the increasing importance of aggregation and bundling in the OTT space, Masterclass may face further obstacles in acquiring and retaining subscribers. The company’s ability to innovate and provide unique educational experiences will be crucial in overcoming these challenges and maintaining its position in the competitive online learning market.