Blended Teaching was born from a simple idea: paper textbooks are based on technology from the 15th century, and are long overdue for an upgrade. Since we launched in August 2022, we’ve uploaded hundreds of hours of videos to our digital platforms, which have been viewed for millions of minutes by learners across the world.
But the content was not the only thing that needed upgrading.
If you wanted to write your own textbook, you would have to: find a publisher, spend years writing it, spend more time waiting for it to be published, and then receive barely anything for each copy that was sold. (And that’s assuming that there wasn’t already an established textbook that everybody was already using.)
We wanted to create a better way for leading educators to share their knowledge, that’s not only professional, engaging and loved by students, but also fairly compensated.
And so today, we’re excited to take the next steps to making this a reality, by releasing the first version of our revenue attribution model.
To put it simply, we measure how much time students spend watching content created by different creators, and then attribute the money we have collected from the students (i.e. the revenue) to the creators, pro-rata to the time spent on content from each creator. We then multiply that money attributed to each creator by the share that creator should receive, to calculate the money that professor will receive. The more students watch of a specific creator (relative to other creators), the more money that creator will receive.
The calculation method is very similar to what we understand are the Spotify and Masterclass payment calculation models. (We don't know for sure though because, unlike us. they're very secretive.)
If you just wanted to get a rough understanding of how our revenue share model works, you can probably stop here, as it now gets into more detail that may or may not be interesting and helpful.
We use two separate methods to calculate how much money is attributed to a creator. This is because there are two different ways that students pay for access. The creator receives the sum of the 2 methods after the end of each month.
The first is that a student pays for access to the platform, either directly with a credit/debt card, or through a voucher code (usually purchased from a bookstore). We are able to track exactly what each individual watches over the life of their subscription (which can last for 4 or 12 months). In the month following the month that their subscription expires, we look back and attribute the money we received from them to the creators they watched, pro rata to the time spent across the creators' content.
Here's an example:
Let’s say a student has a typical semester (four-month) subscription and pays $77. (They may not really pay $77, but it’s a nice number for this example.) Of that $77, Blended Teaching can collect $75 (as $2 is taken by the 3rd-party payment tool used to collect it). This $75 is what we count as the revenue into the business, and is then divided according to the content they watch:
At the start of Month 5, once the student's subscription has expired, we can accurately calculate how much time they have spent on each module, pro rata to their total time spent on the platform during the life of their subscription.
In the example above, the student has spent a total of 30 hours on the platform learning from 2 creators, 10 hours (1/3 of their total time spent) with Creator A and 20 hours with Creator B (2/3 of their total time spent). Therefore, one third of the revenue ($25) is allocated to Creator A, and two-thirds ($50) to Creator B. This is known as the Attributed Revenue.
The Revenue Share paid to Creators A and B is then calculated by multiplying the Attributed Revenue by the Revenue Share Percentage (as defined in your agreement with Blended Teaching.
In this example, Creator A has a 10% Revenue Share Percentage for Module A, so they would receive 10% x $25 = $2.5. Creator B also has a 10% Revenue Share Percentage, so they would receive 10% x $50 = $5.
This calculation is carried out at the end of each month, and paid at the start of the following month.
When someone else (like a company or a university) pays on behalf of a group of students to give them access, there are all sorts of problems allocating a $ amount to each student that we won't go into here. (It's one of those problems that the more you pull at it, the more mess there is).
The good news is that that we've solved it. When a company or university pays, we start by splitting the amount they've paid across the months they've paid for. We then calculate where team members in aggregate have spent their time in a given month, and allocate the revenue pro-rata to the time spent per creator.
Let's take an example:
Let's say a company pays $120,000 for their team of 100 people to have 12 months access to the platform. We split the $120,000 evenly across the months they have access for ($10,000 per month).
The learners in aggregate spent 20% of their time on content from Creator A in that month. At the end of the month, we will attribute 20% x $10,000 = $2,000 to Creator A. This is then multiplied by Creator A's' revenue share (let's say 10%), amounting to $2,000 x 10% = $200 for that month.
This is then repeated for each subsequent month until the year has expired.
Q: What is included in the time tracked?
A: Currently, we are able to track the time a student spends: (a) watching videos, and (b) reading text. We are not able to track the time a student spends in a quiz, so that is assumed to be 0. We are working on the technology to allow us to track that.
Q: Are you only tracking the time spent watching videos?
A: We are tracking both the time spent watching videos and reading text on the platform. These separate elements are summed together when we calculate the total time spent by a student in a particular module.
Q: How do you track the time spent reading?
We have an algorithm that we believe reasonably estimates when a student is actively engaging with written content, excluding time where we reasonably believe they has left the screen open and gone off to do something else. If there is no activity on the page after a short space of time, the time counter will pause.
Q: What's to stop a student starting a video and just walking off? Would this unfairly compensate one content creator over another.
A: We believe that this does not unfairly distort the calculation for Revenue Attribution for 2 reasons:
(1) Each video is relatively short (typically 2-5 mins long) and stops at the end, it does not autoplay the next video. If a student pushes play and walks off, this would only add a few minutes to the calculation of the time spent. (2) Presumably, the student would exhibit this behaviour across a range of modules, so no one content creator would be unfairly prejudiced versus another (i.e. it would impact all creators to a similar extent).
Q: When a student pays directly, why do you wait to pay me my share until after their subscription has ended?
We can only calculate how much time a student has spent pro rata to the modules they have watched when their entire subscription has ended. That way we know exactly how much to pay to each content creator.