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Monetising podcasts - what are the options?

It’s no secret that podcasts have made an enormous comeback in recent years. Almost one in three Americans have now tried out podcasts, with 57 million of them tuning in on a regular basis. The trend is reflected worldwide, and growth seems set to continue.

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While their sudden surge in popularity is often largely attributed to This American Life crime spinoff Serial, which first aired in 2014, Apple’s decision to introduce the native podcasting app (meaning it cannot be deleted) on its mobile devices also played a huge role.

Now, many who thought the medium as good as dead are giving it a second chance. While Slate has been a podcasting pioneer for over a decade, other publishers have since added to the mix - with the likes of The Guardian, BuzzFeed, The New York Times, and many others putting out regular episodes on a range of subjects.

But what of podcasts’ long-term potential? Listenership may be growing at an impressive rate, but how can media brands monetise them? Podcasts are premium content that require hours of people power and creativity to create, yet they can be very difficult to monetise - especially for publishers. So let’s take a look at some of the ways in which podcasters are making money, and what lessons publishers might be able to learn from them.

1.     Sponsorship

The most common way that podcasts can make money is predictably through advertising, or sponsorship. Squarespace, Amazon’s Audible and MailChimp were all early sponsors on a range of podcasts, and now even mainstream brands have sensed their potential.

“It used to be that we'd go to advertisers and step one was explaining what the heck a podcast is. That happens much less often [now]," Lex Friedman, EVP of sales and development at Midroll, which connects advertisers with podcasts, told AdWeek.

Most often, the podcast host will read ads aloud at the beginning, middle and end of a show, injecting them with their own personality. It is the audio equivalent of native advertising.

“The advantage of this type of ad is that it appears more integrated, and often users will be happy to listen because they trust the voice of the host,” Panoply’s Andy Bowers explained at this year’s Digital Innovators’ Summit in March. Advertisers provide a promo discount code unique to the podcast, so conversions can be easily tracked.

“CPMs in podcasting rival, if not exceed, video, so it’s a great place to be from a monetisation standpoint,” Slate’s general manager Brendan Monaghan, who oversees Panoply, told Publishing Executive last year. But advertising may not be a solution for smaller publishers, because large listener figures are required for it to be effective. “We generally say 50,000 downloads per episode but that’s not a hard and fast rule. It’s not that you can’t make money with less than that but 50,000 is the number we generally point to.”

2. Subscriptions

Another approach is to use what’s known as a “freemium” model. In this, a sponsored version of the podcast is available free, or listeners can upgrade to the paywalled, ad-free version, which is often longer and may contain bonus content.

Popular independent podcasts such as Marc Maron’s WTF and the Savage Lovecast, from U.S. advice columnist and political commentator Dan Savage, have adopted this model. Each Lovecast episode begins with a reminder to their 200,000+ weekly listeners that this is the “micro version” of the show, with Savage dropping hints that they can upgrade to the “magnum”, ad-free version for a small subscriber fee. It works because it’s subtle, and because the loyalty of podcasting fans tends to be strong.

In fact, as Andy Bowers highlighted, the intimate nature of podcasts results in huge customer loyalty - more so than any other medium. “People get attached to the host, and feel like they’re part of a club,” he said. In other words, podcasts can provide opportunities for bonding over a shared passion - and this can drive people to pay for the content they love.

Perhaps the key for publishers, then, is to let the brand name take a backseat in favour of focusing on the personality of the host to inspire listener support. A trusted voice asking for support, backed up by a brand, is probably more likely to produce results.

3. Crowdfunding

Drawing on this loyalty, some podcast creators have decided to experiment with crowdfunding. For instance WNYC Studios, which produces the iTunes Chart-topping Death, Sex, and Money, recently declared the month of June to be Podcast Appreciation Month (PAM), with host Anna Sale asking listeners to donate, or “become a member” in exchange for Death, Sex, and Money merchandise. 

Examples of podcasts which have been successfully crowdfunded include the UK-based Media Podcast, which managed to raise the £9,000 needed for a year of fortnightly shows by offering rewards such as a tour of the BBC or dinner with the producer. On a larger scale, Radiotopia’s hugely popular 99 per cent Invisible raised more than double what it needed for its fourth season (having already crowdfunded season three), reaching US$375,000 after a goal of $150,000. Rewards included posters and T-shirts, providing listeners with another way of displaying their loyalty to the show.

Additionally, websites such as Podbean aim to provide a platform for smaller podcasts to connect with fans. “With Podbean Crowdfunding, any podcaster (whether they publish in Podbean or not) can set up a crowdfunding campaign to raise a monthly income stream to support their podcast,” the website reads. “Podbean crowdfunding accounts are free to set up and provide a seamless way for listeners to pledge support for the podcasts they enjoy.”

Undoubtedly, a committed listener base will respond positively to a plea for help via crowdfunding, and it is a good way of testing and inspiring listener loyalty. However, for publishers, crowdfunding may serve more as a way of covering costs in the short-term, rather than generating long-term revenue.

4. Live events

When it comes to really making money, live events may be the golden ticket - and they are a great way of broadening an audience base as well as enticing existing listeners.

Many popular storytelling podcasts, such as The Moth and Risk!, now record episodes in front of a live, paying audience, and public events like the New York City PodFest, which has been running since 2013, can help to bring together podcast-lovers and promote existing podcasts. Media organisations such as NPR have recently hosted live podcast recordings, which cost around $10 to attend.

Publishers are yet to offer the same on a regular basis, though they may be moving in this direction. Slate will record two live versions of its Political Gabfest podcast later this year, and The New York Times this month will be recording a live version of its newly-launched Modern Love podcast, based on the column of the same name. The Guardian already offers the Guardian Live Podcast, with recordings of all The Guardian’s live, paid-for events. At this early stage, whether these live events make money remains to be seen. 

Podcasting for the future

One thing is for certain, though: major media brands are sensing they can make money from podcasts. One example of this is The New York Times. In addition to its existing podcast output, it recently launched an audio-focused unit, the first of its kind from a major publisher, tasked specifically with creating a batch of new podcasts by the end of this year, with more to come in 2017.

While different revenue models are still in the experimental phase, as the above examples show, some independent podcasters are proving that they can monetise their shows successfully through subscriptions, sponsorship, crowdfunding, and live events.

Taking lessons from them, then, these developments may present exciting revenue opportunities for publishers - even small ones. As Lex Friedman of Midroll told Publishing Executive, “if a magazine can be successful on a regional basis then I don’t see any reason a podcast couldn’t be too.”

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