How do podcasts make money? Podcast episodes can be monetized in many different ways.
Naturally, this question generates a tremendous amount of curiosity among those interested in developing podcast episodes.
The truth is, there’s plenty of money to be made in podcasting.
Whether you’re a small business owner or an influencer operating within a specific niche, various strategies can be deployed to create revenue opportunities.
You cannot take a one-size-fits-all approach to podcast monetization.
Instead, you must recognize that not all audio content will inspire the same buying behavior.
Generating revenue from your podcast will be predicated on your relationship with the audience – and how this translates commercially.
According to Edison Research, 51% of Americans have listened to a podcast at least once in their lives.
With the attention of more ears than ever before, this medium has been attracting some major advertising dollars.
While this is proving to be exciting for established names in entertainment and popular culture, how can emerging names get in on the action and grab a slice of the pie?
In this article, we are going to break down everything you need to know about making money with your podcast.
We will be focusing on the following questions:
- How do podcasts make money?
- How much money do podcasts make?
- Are podcasts profitable?
- Who is the highest-paid podcaster?
- Should I start a podcast in 2021?
- How hard is it to start a podcast?
Let’s dive straight into answering the central question.
How do podcasts make money?
How do podcasts make money?
Podcast episodes can be monetized in many different ways.
Some methods of monetization are likely to be more achievable for your podcast than others.
In summary, here are some of the most popular ways to monetize your podcast:
- Direct-to-brand advertising
- Advertising through an agency
- Programmatic advertising
- Premium content
- Conferences and events
Let’s break each of these methods down…
Many brands like to work directly with podcast producers on advertising partnerships.
These partnerships can come in the form of pre-roll, mid-roll, or post-roll advertisements being sold directly to the brand based on a CRM-centric price agreed by both parties.
Direct-to-brand advertising usually includes host-read product endorsements that fit seamlessly into the episode’s content.
Advertising through an agency
Agencies specializing in podcast advertising can act as either brokers or intermediaries for brands looking to secure features in podcast episodes.
Typically, these agencies will have established relationships with podcast producers – enabling brands to leverage an agency’s connections for better features.
Programmatic advertising is gaining traction in the world of podcasting.
These can be easily identified as advertisements that are not delivered by the podcast host.
A set amount of programmatic space will be available for purchase in any given podcast episode – providing brands with the opportunity to speak directly to their target demographic.
If you were to put your podcast episodes behind a paywall, you would be transitioning from an ad-supported podcast to a subscription-based service.
To achieve this, you would need to have a well-established community of supporters that value your content.
Rather than starting out as a subscription-based service, you could transition to this after building a loyal following.
The premium content model is a blend of the ad-supported and subscription models.
In some cases, this will involve services like Patreon – where members can access additional or extended podcast episodes for a small monthly fee.
If your listeners are constantly begging for more, this is the perfect way of monetizing their desire for additional audio content.
Conferences and events
Does your podcast audience love listening to your unique insights?
Encourage them to join you at in-person conferences and events.
When in-person events are not possible, you could host virtual conferences that give people the opportunity to speak directly with you.
If you are an expert in a specific field, these are likely to be particularly popular.
Those looking to develop ambitious audio productions may consider launching crowdfunding campaigns.
While crowdfunding has the potential to provide you with a substantial cash injection, funding the podcast production in this way may not be sustainable in the long run.
Launching a podcast through crowdfunding may be appealing to those working for non-profit organizations.
How much money do podcasts make?
Podcasts have the potential to generate an infinite sum of money.
When you start thinking about using this medium to build brand loyalty, from either a personal or professional perspective, things can get very exciting.
How receptive is the audience to your advice and suggestions?
If you recommend a product or service to your audience, how many will go and buy it?
The ability to successfully influence the buying decisions of consumers at-scale is a complete game-changer.
We saw the power of consumer influence in full display on The Oprah Winfrey Show all those years ago.
Now, we are seeing this again in new mediums, such as podcasting and social media.
Are podcasts profitable?
While some initial costs may be incurred through the purchasing of podcast equipment, DIY podcast hosts are unlikely to have many significant recurring costs associated with podcast production.
Typically, it’s just the cost of hosting the show, which tends to range between $10 and $20 per month.
For podcast hosts who decide to outsource podcast editing and distribution to save time, costs will vary a bit more.
Securing podcast sponsors or pursuing an alternative revenue source will inevitably take you towards profitability.
Who is the highest-paid podcaster?
In 2019, the highest-earning podcaster was Joe Rogan with The Joe Rogan Experience.
The hit podcast made $50 million that year and reportedly achieved close to 200 million downloads per month.
In 2020, Joe Rogan signed an exclusive deal with Spotify, which saw the podcast disappear from all other streaming platforms.
This multi-year deal is believed to be worth $100m.
Should I start a podcast in 2021?
There has never been a better time to start a podcast.
As podcast libraries become increasingly more crowded, time is running out.
From the outset, you need to think carefully about who you are trying to target.
The more defined your target audience is, the better.
This will enable you to stand out from the crowd and bring some compelling content to the table.
You don’t need to be oozing with charisma to launch a successful podcast.
Ultimately, it all comes down to the amount of value you can offer to the listeners.
Substance always wins.
If you’re an industry leader with a perspective, listeners are going to want to hear your unique insights on specific topics.
Never underestimate the value of your opinion.
How hard is it to start a podcast?
With the support of Cashflow Podcasting, starting a podcast has never been easier.
We can support you through the process of editing the podcast episodes and bringing everything to life.
Once the content has been packaged up, we can distribute this across all of the major streaming platforms.
In other words, we do the heavy lifting so you don’t have to.
Are you ready to start building an audience with compelling podcast episodes?
It’s time to get the ball rolling.
Ben Krueger is the founder of Cashflow Podcasting and he specializes in helping thought leaders entrepreneurs amplify their impact through podcasting. He’s a world traveller, outdoor sports junkie and future enthusiast!