Podcasts are more popular than ever. There are hundreds of thousands of shows, millions of listeners, and billions of dollars generated by the industry. But how do podcasts make money in the first place?
Do you need to be in Apple’s Top 100 to be profitable, or can podcast hosts with a more modest audience still earn a good living? This article will cover the best ways to make money with a podcast, the amount of money each one can generate, and which would work best for you.
Advertising is one of the best ways to monetize any form of entertainment, and podcasting is no exception. It’s scalable, easy to implement, and increasingly popular in the podcast medium. In 2019 alone, brands spent $708M on podcast advertisements.
Interestingly, podcast listeners don’t seem to mind ads as much as other audiences do. Hosts typically read the ads themselves (infusing the copy with a bit of their personality) and can choose to only promote products that resonate with their audiences.
This is especially valuable now that people are so quick to block website popups, mute TV commercials, and skip YouTube ads.
Hosts usually have three slots for their advertisements: One before the content begins, one in the middle, and another at the very end. The middle slot is often the most coveted since the audience is more likely to skip the other slots. But the tradeoff is that it interrupts the content and may upset a percentage of listeners.
As you’d expect, revenues from podcast advertisements correlate directly with the number of listeners. Rates are usually based on a set cost-per-1,000 listeners (CPM) and can range anywhere from $18 to $50 CPM depending on the length of the ad and popularity of the podcast.
To measure the success of any ad and demonstrate a return for your sponsors, you have to implement some form of tracking mechanism. The two most common are:
- Promo codes: At the end of an advertisement, the host includes a special promo code that grants listeners a discount. It also doubles as a way to track which podcasts successfully motivate their listeners to engage with the advertised product.
- Affiliate Links: Instead of announcing a special promo code for listeners to enter when they make their purchases, the host includes a unique link to the advertised product in the show notes which can track everyone who clicks it.
One clever (and potentially very lucrative) way to make money with podcasts is to promote and host live events.
While it’s easiest to make these live shows a recurring source of revenue by touring for a national audience, you can still make a good profit if you have a local but engaged fanbase.
This model usually works best for hosts whose content is conducive to the stage. Here are some good examples of podcasts who have been successful using live events:
- Armchair Expert: An extremely popular podcast with a national fanbase, they’ve hosted multiple events throughout America. They’re a discussion-based podcast, and audiences enjoy getting to observe the interviews in person.
- Hello From the Magic Tavern: This is a great example of a niche podcast with a devoted following that’s managed to capitalize on their loyal fanbase. They create improv comedy content and encourage fans to attend live events by allowing participation from the audience.
Although COVID-19 has made this strategy more difficult, performers of all kinds have been experimenting with socially distanced live events. Some have even had success with drive-in shows.
The profitability of these live shows is entirely dictated by the size of your audience and the price they’re willing to pay for tickets. For podcasts with large and loyal fanbases, these events can be a great way to make a lot of money very quickly.
Wait Wait… Don’t Tell Me! has hosted some of the most popular live podcast events over the last decade and averages $113 a ticket. If you could fill 300 seats at that price, that would be $28,250 of revenue in a single night!
3. Direct Support from Listeners
Podcasts are traditionally a free model, but many hosts have found effective ways to get support directly from their fans.
Some accept donations, others sell merchandise or premium content, and a few even require a monthly subscription to access their podcast.
Here are some great examples of each of these strategies:
- Serial: This popular podcast needed additional revenue to cover their expensive production costs, and started a donation campaign that created a surge of contributions from their fans. They raised plenty to keep the podcast going for another season and still accept donations on their website.
- Myths and Legends: In addition to ad revenue and some premium content, this podcast has doubled down on selling branded merchandise. They have an entire store attached to their website where fans can buy t-shirts, posters, and stickers to show their appreciation for the podcast.
- Stitcher Premium: This podcast group has fully embraced the subscription model. They do offer free content but heavily promote their premium option whenever they can. The subscription is $4.99 a month and entices listeners with early access, extra episodes, and ad-free listening.
Perhaps the best thing about this monetization strategy is its flexibility. Ads can be an imposition even for the most forgiving listeners, and events require lots of planning and expenses (renting a venue isn’t cheap). But drawing directly on your fanbase to pay for the content you create can easily be adapted to make money with your podcast.
Should You Start a Podcast?
Podcasts can be an awesome way to make money, but they’re far from a get rich quick scheme. It takes time to build and nurture an audience, especially now that the market has become so saturated.
Still, there’s always room for new ideas and perspectives. Are you looking to make money with a new podcast? If you already have one, are you going to try any of the strategies we outlined above?
Either way, let us know in the comments below!