In the world of online courses, co-production is one of the most effective ways to combine expertise and marketing power. A subject-matter expert brings valuable knowledge, while a co-producer ensures the course is designed, launched, and marketed successfully. This partnership allows both parties to share in the financial success of the course.
But here’s the big question: how should the revenue be split?
Revenue sharing in co-production can be straightforward, but only if both partners take the time to define terms clearly. In this article, we’ll explore how revenue sharing works, common models, the factors that influence the split, and best practices for keeping things fair and transparent.
Why Revenue Sharing Matters
Money is often the most sensitive aspect of any partnership. Without clear agreements, even the most promising co-production projects can fall apart. A poorly designed revenue-sharing model can create:
- Resentment, if one partner feels undercompensated.
- Confusion, if income isn’t tracked properly.
- Distrust, if payments aren’t transparent or consistent.
A fair revenue-sharing agreement, on the other hand:
- Motivates both partners to contribute their best.
- Creates long-term collaboration opportunities.
- Builds trust and reduces conflicts.
Gross Revenue vs. Net Revenue
Before discussing percentages, it’s important to distinguish between gross revenue and net revenue:
- Gross revenue: The total amount of money generated from course sales before expenses.
- Net revenue: What remains after deducting agreed expenses, such as ad spend, software fees, or payment processor fees.
Most co-production agreements are based on net revenue, as this ensures expenses are shared fairly. For example:
- The course generates $20,000 in sales.
- $5,000 is spent on Facebook ads.
- Net revenue = $15,000.
- Revenue split is applied to that $15,000.
This prevents one partner from bearing an unfair share of the costs.
Common Revenue Sharing Models
There is no one-size-fits-all approach to revenue sharing. The split depends on factors like contribution, risk, and negotiation. Here are the most common models:
1. 50/50 Split
The simplest model. Both partners receive equal shares of revenue.
- Works best when both parties contribute equally: one creates high-quality content, and the other manages marketing, funnels, and support.
- Encourages strong collaboration since both stand to gain equally.
2. 60/40 Split
The expert receives 60%, and the co-producer 40%.
- Common when the expert already has a significant audience or brand.
- The co-producer is compensated for their role but acknowledges the expert’s established value.
3. 70/30 Split
The co-producer receives 70%, while the expert takes 30%.
- Used when the co-producer does most of the heavy lifting—marketing, ads, funnel building, customer support—and the expert only provides content.
- Often applied when the expert has little to no audience.
4. Flat Fee + Revenue Share
The co-producer charges an upfront fee for their work (e.g., $5,000) plus a smaller share of revenue (e.g., 20%).
- Gives the co-producer guaranteed income while still aligning incentives.
- Best for short-term collaborations or projects with uncertain potential.
5. Tiered Models
Revenue splits change as revenue grows. For example:
- First $10,000: 50/50.
- $10,001–$50,000: 60/40 in favor of the co-producer.
- Beyond $50,000: 70/30 in favor of the co-producer.
This model rewards both sides fairly as the course scales.
Factors That Influence the Split
Every co-production is different. When negotiating revenue sharing, consider:
1. Who Provides the Audience?
If the expert already has a large, engaged following, they bring significant value. In this case, they may negotiate a higher percentage.
2. Who Funds the Marketing?
Paid ads are often the biggest expense in course launches. If the co-producer invests their own money into ads, they take on more risk and may justify a higher percentage.
3. Who Handles Operations?
Managing tech, customer support, and finance requires time and effort. If the co-producer handles all of this, their share should reflect that responsibility.
4. Content Quality and Uniqueness
Not all expertise is equal. If the expert is highly specialized or recognized in their field, their contribution carries extra weight.
5. Long-Term vs. Short-Term Collaboration
For one-off projects, a 50/50 split may suffice. For long-term partnerships, a more complex structure might be better.
How to Track and Distribute Revenue
Transparency is key in co-production. Here are the best practices for tracking and distributing revenue:
Use Trusted Payment Processors
Platforms like Stripe and PayPal allow for automated revenue splits through third-party tools.
Automate Payouts
Some platforms (e.g., Teachable, Kajabi) allow direct instructor payouts. If not, co-producers should use software like Stripe Connect or PayKickstart to ensure fairness.
Share Access to Analytics
Both partners should have access to dashboards showing revenue, expenses, and refunds. Transparency prevents suspicion.
Define Payment Schedule
Agree on whether payouts are weekly, monthly, or quarterly. Monthly is common as it aligns with most platforms’ schedules.
Common Mistakes in Revenue Sharing
Many beginners make avoidable mistakes when setting up revenue-sharing agreements:
- Failing to deduct expenses: Splitting gross revenue without considering ad spend can leave one partner in debt.
- Vague terms: Agreements that don’t specify how refunds, taxes, or fees are handled cause disputes.
- Unclear ownership: If roles aren’t defined, partners may argue over who controls the content and brand.
- Lack of documentation: Relying on “handshake agreements” is risky. Always put terms in writing.
Legal Considerations
While trust is important, legal protection is essential. Your agreement should include:
- Ownership of intellectual property (course content vs. marketing assets).
- Revenue split details, including how expenses are calculated.
- Duration of agreement (per launch or ongoing).
- Termination clauses, in case one partner wants to exit.
- Dispute resolution methods (e.g., mediation before legal action).
Using a lawyer to draft or review your agreement may feel expensive upfront, but it can prevent costly disputes later.
How to Negotiate a Fair Split
Negotiation is not about winning or losing—it’s about finding balance. Here are some strategies:
- Be honest about contributions: If one partner does significantly more, acknowledge it.
- Focus on value, not just effort: The creator’s brand may be worth as much as months of work.
- Start with a test project: Launch a small mini-course first to test the partnership before committing to bigger projects.
- Keep communication open: Review results after each launch and adjust terms if needed.
Example Scenarios
Scenario 1: Equal Contribution
A productivity coach records lessons while the co-producer manages the funnel, ads, and customer support. Both work equally hard, so they agree on a 50/50 split.
Scenario 2: Creator With Audience
A nutrition influencer with 200,000 followers partners with a co-producer. Since the audience already exists, they agree on a 60/40 split favoring the creator.
Scenario 3: Co-Producer Does It All
A professor with no online presence wants to create a course. The co-producer manages everything from A to Z. They agree on a 70/30 split favoring the co-producer.
Scenario 4: Flat Fee Plus Share
A creator pays a co-producer $3,000 upfront plus 20% of sales. The co-producer is guaranteed compensation and still benefits from strong sales.
The Future of Revenue Sharing in Co-Production
As online learning expands, revenue sharing will continue to evolve. Platforms may introduce more automated systems for splitting payments. Partnerships may also become more complex, involving multiple co-producers (for ads, design, copywriting).
The principle, however, will remain the same: fair revenue sharing motivates both sides and builds sustainable businesses.
Final Thoughts
Revenue sharing in co-production is both an art and a science. There are common models—50/50, 60/40, 70/30—but the best split depends on contributions, risk, and goals. Transparency, documentation, and fairness are non-negotiable.
When done right, revenue sharing creates a true partnership: experts focus on teaching, co-producers focus on marketing, and both enjoy the rewards. The end result isn’t just profit—it’s courses that reach more students and make a greater impact.
If you’re planning to co-produce courses, take revenue sharing seriously. A clear, fair agreement today could be the difference between a one-time project and a long-lasting, profitable partnership.