Masterclass, the online learning platform that offers courses taught by celebrities and industry experts, is facing a decline in subscriptions. The drop in subscribers comes after the company spent a significant amount of money on A-list celebrities like Disney CEO Bob Iger to teach courses. In fact, Masterclass reportedly paid $100,000 to recreate Iger’s office and spent a total of around $850,000 on hiring him and shooting the course. Despite the star power, Masterclass has been hit by shrinking subscription growth and has had to make cost-cutting measures, including shorter classes and outsourcing production. The company has also experienced significant layoffs, reducing its workforce by more than 50%.
Masterclass’s decline in subscriptions comes after a period of rapid growth during the COVID-19 pandemic, where it raised $335 million in funding. However, as fewer people are opting for online courses, Masterclass has had to reassess its spending and cut its budget in half. The company has also reduced its subscription price from $15 per month to $10 per month in an effort to make its platform more accessible. Despite these efforts, it remains to be seen whether the lowered prices and shorter classes will be enough to attract more subscribers.
According to a survey by Parks Associates, only 47% of households subscribed to over-the-top (OTT) services, indicating that direct subscription services like Masterclass may struggle as bundling and aggregation become more important. Masterclass has not yet commented on the decline in subscriptions. However, CEO David Rogier remains optimistic, stating that the company’s cost-cutting measures have made it stronger financially and strategically, while also allowing for continued innovation in content and formats.