Online course or membership program?
Either one is a great foundation for creating passive income, but which is best for you?
If you’re fuzzy on the differences, don’t worry, because the line is rather blurred.
In practice though, they’re very different beasts.
If you’re thinking of going down one of these routes, chances are good that one of these will be more suitable for you than the other.
However, the right path may not be obvious.
So let’s clear things up, shall we?
What is an Online Course?
An online course is a training program, delivered online, that is designed to help students with a common interest achieve a particular goal or result.
For example, an online course might teach you how to become a freelance writer, how to use a sewing machine or how to find your ideal romantic partner.
Courses are built up from lessons, assignments, quizzes and so on. Larger courses may be organised into separate modules, with each focusing on a certain aspect or stage of the overall journey.
Content-wise, a course may be primarily video, or audio, or even just text, but typically there is one intended path through the materials to reach the final goal.
What is a Membership Program?
A membership program is a private online community centred around an ongoing interest or long-term goal.
For example, a membership program might serve people who are interested in growing their own food, learning to play the piano, or endurance running.
Members get access to numerous benefits, like live workshops, interviews, mini-courses and other resources, and stay on board for as long as they want.
The content is as varied as with courses but there’s usually more emphasis on community, with a space for members to socialise and discuss subtopics of interest.
What’s the Difference between Online Courses and Membership Programs?
In truth, there’s no perfect dividing line between the two concepts. But there are key differences that help to separate the two.
Difference #1: Narrow vs Broad Scope
Online courses tend to focus on a specific end goal that can be achieved in days or weeks. You follow the materials, achieve the goal and then leave the course behind.
Membership programs cover a broader topic area that has the potential to hold members’ interest for months or even years. Yes, they make progress against their goals, but there’s usually some new aspect to learn or new level to reach.
Difference #2: Static vs Expanding Content
Online courses tend to have a fixed curriculum of content that’s designed to be studied in a particular order. The content remains fairly static and doesn’t grow much over time.
Membership programs usually follow a “library” model where students choose their own path based on what interests them at the time. New content is added on a regular basis so the library is always growing.
Difference #3: Academy vs Community
Online courses often feel like a virtual academy – a place online where students go to learn about a certain topic. While they’re probably aware of their fellow students, the central relationship is between them and the training program itself.
Membership programs have more of a community feel, where members are on a journey with like-minded peers, all drawing on the same resources. Successful membership programs have a strong, loyal community who stay on board long term.
Difference #4: Single Instructor vs Multiple Experts
Online courses tend to have one person at their heart who’s the public face of the program. They’re also usually the person teaching most of the materials.
A membership program is more likely to have contributions from other people. The program creator acts as a host figure, bringing invited experts in from outside.
Difference #5: Upfront Payment vs Subscription
Online courses tend to be sold for a fixed price (either paid upfront or in a small number of instalments). They often cost hundreds of pounds or more.
Membership programs tend to work on a subscription basis, e.g., £27 per month, with members staying onboard until they choose to cancel. Often an annual subscription is also an option and offers a significant discount.
Online Courses: Pros and Cons
Online courses have certain advantages and disadvantages compared to membership programs. Let’s see what they are.
- Easier to start small – a small course delivering a useful outcome can be a success even with modest sales because it remains valuable over time and helps to build your authority and credibility.
- Generate income quicker – the higher ticket price of an online course means a successful launch can be quite lucrative with most of the income occurring upfront.
- Require less ongoing maintenance – once the content is created, the ongoing effort usually drops off with an online course, and a self-study course can be run almost entirely on auto-pilot.
- Not everyone can teach – creating an online course that leads students smoothly to a specific result is a learned skill that takes time to master.
- Harder to sell – because of the higher price you usually need a more sophisticated marketing machine or an existing audience of potential buyers.
- Requires regular promotion – you only make money when you make new sales, so you need to promote your online course on a regular basis.
Membership Programs: Pros and Cons
Likewise, membership programs have their own pluses and minuses compared to online courses. Let’s break them down.
- Easier to sell – the relatively low cost of entry can make it easier to get new members to sign up because their investment (and perceived risk) is lower.
- Quicker to launch – since less content development is required upfront you can get a basic membership program up and running fairly quickly.
- Predictable income – once up and running membership programs generate regular, predictable income even if you’re not actively making new sales.
- Harder to start small – since most membership programs need a critical mass of members to feel like a real community, it’s harder to start from zero.
- Revenue builds slowly – because of the low price of entry, initial revenues are lower and it may take some time before it’s making serious profit.
- Need to manage retention – with a subscription model you don’t only have to convince people to join once, you have to convince them to stay on board.
So, What’s the Right Path for You?
If you’re looking to create passive income without a major shift in your business model, I recommend looking into online courses first.
A small online course is usually the best way to start leveraging your knowledge, particularly if you only have a modest following online.
You can dip your toe in the water, see things go, and then build from there.
Membership programs work best when you already have a decent-sized following online. That’ll help you get enough people into the program on Day 1 for it to feel like a community, not a ghost town.
Memberships are a bigger commitment too. It’s a longer-term game and you’ll need to accept that in the early days the effort will far outweigh the reward.
Whichever route you choose, good luck!