Momentum Insights - Vol. 02 / The Residual Gap
Momentum InsightsVol. 02 / Instructional Design Edition
A field guide for instructional designers
The Residual Gap
Why instructional designers are paid once for work that keeps earning for years — and what it takes to close the gap.
For freelance and in-house instructional designers, eLearning developers and learning consultants who build courses other people keep using.
MOMENTUM IT GROUP
Before you begin
A course is an asset. Its designer is usually paid like a contractor.
You invoice once. The course keeps working — every new hire, every compliance cycle, every cohort — for years.
Most instructional designers are paid by the hour or by the project. That made sense when training was a one-off event. It makes less sense when a single well-built course can be delivered to thousands of learners over five years or more, with almost no extra cost per learner.
We call the difference between what a course earns over its life and what its creator receives after delivery the residual gap. This guide looks at why the gap exists, where the money goes today, and two practical ways designers can claim a recurring share of the value they create.
It follows Beyond the Feature Checklist (Volume 1), which argued that the best learning partners sell a result rather than a tool. This volume applies the same idea to the people who build the learning.
$30/hr
Median freelance instructional design rate on Upwork
184 hrs
Average team effort per finished hour of interactive eLearning
0%
Designer share of a course’s ongoing value under a standard work-for-hire contract
01 What a finished hour really costs
One hour of learning takes weeks to build.
Learners see a 60-minute course. Behind it sits analysis, design, scripting, media, build, review and testing.
Level 1 · Basic
avg 79 (49–125)
Level 2 · Interactive
avg 184 (127–267)
Level 3 · Advanced
avg 490 (217–716)
0250500750 hrs
The rate$20–45
Typical hourly range for freelance instructional designers on Upwork; median $30.
The build138 hrs
A 45-minute interactive course at the Level 2 average (0.75 × 184).
The invoice$4,140
Those hours billed at the $30 median. Paid once.
Why it matters
The effort is front-loaded and substantial. The value is spread across every learner who takes the course, for as long as it stays in use. A fee-only model captures the first and none of the second.
02 Paid once, used for years
The invoice closes. The course keeps working.
A compliance course is retaken every year. An onboarding module meets every new hire. A certification program runs every season. Each delivery creates value for the organisation, and none of it reaches the designer once the project is signed off.
The designer’s view
Income stops at delivery
To earn again, you build again. Income is tied to hours, so growth means longer weeks or higher rates in a market where the median is $30.
The course’s view
Value compounds with use
Every additional learner costs almost nothing to serve. The more successful the course, the wider the gap between what it earns and what its creator received.
Definition
The residual gap is the difference between the value a course creates over its working life and what its creator receives after delivery.
03 Where the residuals go today
Designers have four options. Each trades share for effort.
If you want a course to keep paying you, the usual routes are below. None is wrong; each asks you to give up either share, control, or a lot of your own time.
| Question | Work for hire | Open marketplace | Sell it yourself | License through a platform partner |
|---|---|---|---|---|
| Your share after delivery | None | 37% of marketplace sales on Udemy; subscription share falling to 15% (Jan 2026) | Most of the revenue, after costs | An agreed share of every sale (Momentum: 30% floor) |
| Who owns the IP | Usually the client | You | You | You, non-exclusive licence |
| Who sets the price | — | Largely the platform | You | Agreed; you can set minimums |
| Who runs the technology | Client | Platform | You: hosting, payments, LMS, support | The partner |
| Who finds buyers | — | Platform, mostly consumers | You | The partner, incl. organisational buyers |
| Best for | Bespoke, client-specific work | Consumer topics with broad demand | Designers with an audience | Workplace and compliance topics organisations buy |
← Swipe to compare →
Udemy figures from its instructor letter filed with the SEC (Exhibit 99.1, 2023): marketplace share 37% unchanged; subscription share 25% stepping to 20% (2024), 17.5% (2025) and 15% (Jan 2026).
The pattern
The routes that pay the biggest share ask you to become a software company, a payment processor and a marketing team. The routes that do that work for you tend to keep most of the money. The question is whether a partner can do the work and pay a meaningful share.
04 Why the gap persists
Designers sell hours. Organisations buy results.
Volume 1 argued that the best learning partners sell an outcome and stay on the hook for it. Most instructional designers are structurally prevented from doing the same — not by skill, but by how the work is bought.
01 The contract
IP is assigned away by default
Standard work-for-hire terms hand the client everything, including generic modules that could serve other organisations.
02 The infrastructure
No platform to sell from
Hosting, SCORM delivery, payments, tax, invoicing and learner support are a business in themselves.
03 The distribution
No route to buyers
Organisations buy learning through procurement and relationships, not app stores. Few designers have time to sell.
04 The data
No view of what happens next
Once delivered, designers rarely see usage or results, so they can’t prove value or price for it.
Closing the gap isn’t about charging more per hour. It’s about staying attached to the result — and being paid for as long as the course keeps delivering it.
05 Two kinds of residual
You create value in two ways. Both can pay you over time.
Designers create value through the courses they build and through the organisations they advise. Each can produce its own recurring income, and the two work side by side.
FIG. 02 · TWO SOURCES OF RECURRING INCOME
Courses you ownReusable SCORM content
Content residualA share of every sale
YouInstructional designer
Clients you adviseOrganisations that need an LMS
Relationship residualA share of recurring platform revenue
Content residual → Path A
Courses you own
Generic, reusable courses — workplace safety, accessibility, harassment prevention, customer service, sport-specific certification — that many organisations could license.
REQUIRESYou hold the rights to the course.
Relationship residual → Path B
Clients you bring
Organisations you already advise that need a platform to deliver, track and certify their learning.
REQUIRESOnly the relationship. Works even when the client owns all the content.
06 Path A · Content Creator Program
License your courses. Earn on every sale.
You license your SCORM courses to Momentum on a non-exclusive basis. We host them on our learning platform, sell them to organisations, deliver them to learners and support them. You receive a share of net revenue on every sale, for as long as the agreement runs.
Your share30%+
of net revenue on every sale of your course. 30% is the floor, not the target.
The key terms
- Non-exclusive. Keep selling elsewhere.
- You set minimum prices per volume tier.
- Monthly sales reports by the 10th.
- Stripe payouts after a 30-day holding period.
- Learners keep access if the agreement ends — and you keep earning on it.
How it works
- 1
Apply
Tell us about your courses: topics, length, audience and format.
- 2
Review & agree
We check technical fit and market demand, then sign the content licence with your minimum prices.
- 3
We list and sell
Momentum hosts the course, markets it to organisations and handles billing, tax and support.
- 4
Learners take it
Usage and sales data flow into your monthly report, so you can see what’s working.
- 5
You get paid
Your share is transferred to your Stripe account after each holding period. No invoicing.
Good fit if
You own finished or nearly finished courses on topics many organisations need, and you’d rather design the next one than run a store.
07 Path B · Momentum Learning Partner Program
Introduce a client. Share in the platform revenue.
When an organisation you work with needs a learning platform, introduce them to Momentum. We contract with and bill the client directly, implement the platform and support it. You earn a share of the recurring LMS revenue that client generates. You never handle payments or carry the technology.
Recurring
Paid for the life of the client
Not a one-time referral fee. Your share continues as the client renews, with a 10% Lifetime Revenue Rate as set out in the agreement.
Protected
Register opportunities
Register a prospect and it’s protected for 90 days, with a 90-day extension while it’s active.
Simple
Monthly statements
Paid in CAD within 30 days of month end, $100 minimum payout.
Good fit if
You advise organisations on their learning — associations, non-profits, sport bodies, training providers — and they keep asking where to host the courses you build for them.
08 The math, illustrated
Same course. Two ways to be paid.
A hypothetical designer builds one 45-minute interactive course they own, and introduces one client organisation to the platform. The numbers below are illustrative, not a forecast.
| Source | Assumption | Per year | 5 years |
|---|---|---|---|
| Project fee | 138 hrs × $30 median (from section 01) | — | $4,140 |
| Path A — content | 150 learners/yr × $39 net × 30% floor | $1,755 | $8,775 |
| Path B — client | $9,600/yr LMS subscription × 20% Launch rate | $1,920 | $9,600 |
| Total | $3,675 | $22,515 |
Hypothetical example for illustration only. Prices, volumes, tiers and client spend vary; this is not a projection or guarantee of earnings. Actual terms are set by the program agreements.
09 Keep your rights · A checklist for your next contract
You can’t earn residuals on a course you don’t own.
Path A depends on holding the rights to reusable content. These are common points to discuss with clients — and with your own lawyer — before you sign.
General information only, not legal advice. Contract terms and IP law vary by jurisdiction; have a lawyer review agreements before you rely on them.
10 Which path fits you?
Start with what you already have.
You don’t need a catalogue or a client list to begin. Pick the path that matches today, and add the other when it fits.
If you have courses
Start with Path A
- You own one or more finished SCORM courses
- Topics apply across many organisations
- You want income that isn’t tied to hours
If you have clients
Start with Path B
- You advise organisations on learning
- They need a platform to deliver and track it
- Clients own the content you build
If you have both
Combine them
- Content share on course sales
- Partner share on LMS subscriptions
- Two income streams from one practice
What Momentum is accountable for
We only earn when your work does.
In Volume 1 we said the right partner sells a result and stays on the hook for it. That’s how these programs are built: we run the technology, find and serve the buyers, and report back to you every month. Our revenue and yours come from the same place — learners who use what you built.
We run it
Hosting, SCORM delivery, updates, integrations and learner support.
We sell and bill
Contracts, invoicing, payments and tax, as merchant of record.
We report
Monthly statements showing sales, usage and what you’ve earned.
We pay on time
Scheduled payouts set out in your agreement. No chasing invoices.
Your best work shouldn’t stop paying you the day you hand it over.
- Build it once.
- Keep your rights.
- Let it reach more learners.
- Get paid for as long as it keeps working.
The course keeps earning.Now you can too.
Next step
Apply to the Content Creator or Learning Partner Program
Apply online and we’ll follow up to talk through fit, terms and next steps.
momentumitgroup.comSources & notes
Sources
- Upwork, “How much does it cost to hire an instructional designer?” Typical range $20–45/hr, median $30, based on historical contracts. upwork.com/hire/instructional-designers/cost/ (accessed October 2026).
- Chapman Alliance, How Long Does It Take to Create Learning? Research data collected September 2010. Level 1: avg 79 hrs (49–125); Level 2: avg 184 hrs (127–267); Level 3: avg 490 hrs (217–716) per finished hour. Published via SlideShare.
- Udemy, Inc., letter to instructors, Exhibit 99.1 to Form 8-K filed with the U.S. SEC (2023). Marketplace revenue share of 37% unchanged; subscription revenue share changing from 25% to 20% (Jan 2024), 17.5% (Jan 2025) and 15% (Jan 2026). sec.gov.
Notes on the program descriptions
Program descriptions summarise the Momentum SCORM Content License & Revenue Share Agreement and the Momentum Learning Partner Program Agreement. Where this guide and an agreement differ, the agreement governs. Revenue shares, tiers, payment timing and protection periods are subject to the signed agreement and may change with notice as provided in it.
About the illustration in section 08
The worked example uses hypothetical prices, volumes and client spend to show how fee-based and recurring income compare over time. It is not a forecast, projection or guarantee of earnings.
Not legal advice
The contract checklist in section 09 is general information. Laws on intellectual property and contracts vary by jurisdiction; consult a qualified lawyer.
Momentum Insights · Vol. 02
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The Residual Gap
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