Masterclass, an online learning platform that features courses taught by high-profile celebrities, is facing a decline in subscriptions and cutting costs after spending significant amounts of money on producing courses. The company reportedly paid around $850,000 to recreate Disney CEO Bob Iger’s office for filming his course, including a personal fee for Iger. Despite the involvement of A-list celebrities like Iger, Bill Clinton, and Martin Scorsese, the company’s subscription growth has slowed, leading to shorter classes and fewer high-profile instructors. Additionally, Masterclass has undergone multiple rounds of layoffs, reducing its workforce by over 50%.
The decision to recreate Iger’s office for filming showcases the company’s extravagant spending, with the overall cost reaching $850,000. However, Masterclass’s investment did not translate into sustained growth, and the company now faces financial challenges. As a result, it has reduced costs, outsourced filming and production work, and implemented layoffs. Despite these actions, a spokesperson for Masterclass claims that the company has become stronger financially and strategically.
While Masterclass enjoyed increased popularity during the COVID-19 pandemic, raising substantial funding, its subscriber growth has slowed in 2022 as fewer people opt for online courses. This drop in revenue has compelled the company to reevaluate its spending, resulting in a budget cut by at least half. In an attempt to attract more subscribers, Masterclass lowered its monthly subscription price and introduced discounted annual plans. However, the efficacy of these measures remains uncertain. Additionally, industry reports suggest that direct subscription services like Masterclass face challenges as bundling and aggregation become increasingly dominant in the market.