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The Business of Podcasts

At PRX, we love listening to podcasts. We also know that great shows have support – an enterprise and infrastructure (both small and large) that supports production, distribution and monetization. In February of 2014 we launched PRX’s Radiotopia to serve as a podcasting laboratory to grow audience and revenue. The lessons we have learned continue to inform our services. Years ago, pre-iPhone and iTunes store, we knew podcasting was going to catch on and developed a software utility called “Pubcatcher” allowing public radio stations to publish and find RSS feeds. We sometimes referred to Pubcatcher as Tivo for radio. Times have changed.

Now there are over a billion podcast subscribers.

According to Edison Research’s Infinite Dial 2014:

  • Approximately 39 million people have listened to a podcast in the last month
  • 1 in 5 weekly podcast users listen to 6 or more podcasts per week

The rapid adoption of mobile listening is re-wiring our behavior.

If you have the creative and technical chops needed to create great audio stories, you are all set to monetize and grow your podcast, right? Well, sort of but not quite. Besides making good content, there are a few other things to keep in mind.

1. Poise Yourself for Growth.

When PRX launched Radiotopia, we were surprised to learn that the state of podcast hosting was a mess. Producers are hosting audio files on older computers and with shaky companies. First, don’t work against your own potential growth. This means creating a podcast feed that points to a stable place. When your favorite producer tweets how much they love your show, make sure your feed can handle the new interest in your work. Basic metrics like number of downloads and subscribers are how you will measure your success. If your host doesn’t offer these, walk away.

2. Preserve Your Independence.

If your podcast feed is not a domain you control you may have trouble upgrading or moving to a new publishing platform in the future. If your show URL is something like – www.mycoolpodcast.podcastcompany.com, you may have a tough time extracting your feed since it is tied up with the domain of your host. Potentially, you could lose listeners in the transition. The best way to avoid this problem is to purchase a domain name and then use that for your feed. But purchasing, configuring and maintaining a domain name is not everyone’s cup of tea. So, the second best way to avoid this lock-in is to use FeedBurner or to work with PRX.

3. Findability.

Don’t make people look too hard to find you, because they won’t bother. Make sure you have an iTunes subscription link on your website and your social media profiles. Don’t skimp on metadata – the data about your data. Let me say that again – don’t skimp on metadata. We are so sad when we see empty fields. Remember the Internet robots are out there indexing while you sleep – make them work for you.

Before you publish you should have the following minimum information at the ready:

  • Link for your podcast website (a basic website is OK)
  • Title – this title will travel with your content so no episode numbers or HTML code please
  • Description – remember the Internet robots
  • Language – seems evident but podcasts are growing around the world
  • Copyright – a basic copyright notice or a creative commons license notice
  • Editor – person responsible for the content
  • Technical Contact (may be the same as Editor)
  • Publication Date – we support the podcast bingers out there so help them out a little
  • Feed Build Date – if the feed changes
  • Categories – use multiple, as appropriate
  • Image – a good image will improve the likelihood that others will promote your work

You may need a variety of image sizes too, check Apple’s resource.

Audrey Mardavich, PRX’s Community Manager, did a super helpful blog post on the importance of titles alone. We know your podcast is your baby, but if you are spending five hours on those final 3-second edits and then rush through the metadata fields, you are working against yourself.

Echo Effect. Another way people will find you is through others. Find and partner with content creators who may have an audience that is relevant to your content – maybe a food blogger if your podcast is for foodies, maybe an architectural digest if your podcast is about design.

4. Extend Yourself.

Podcasting is different than broadcasting. You are typically in people’s ears. It is an opportunity for more familiarity and intimacy. Thinking of your podcast as a one-way publishing experience is limiting yourself. Start a newsletter, be active on social media and reach out often. Make sure that your social media links lead right to your audio (avoid more than one click!). Think about how you are going to communicate with your listeners and be active – they are your people and they will help you with Rule #5.

5. The Moolah.

This is probably the area of the most confusion and stress we encounter. There are two basic things that come into play when monetizing your podcast – you have to have a sizeable audience that knows you and likes you well enough to either 1) donate to you or 2) purchase a product you endorse through sponsorship. Be careful wasting your energy on sponsorship sales until you grow your audience. In our experience, the magic audience number is about 20,000 downloads per episode. Or, your podcast is published frequently enough so that you have at least 50,000 downloads per month. Yep, big numbers if you are just getting started. Producers sometimes need to find revenue to get going. Some institutional partners will offer an advance against future earnings. You may also be able to count on donations from supporters. Even when you reach those download numbers, you still have to sell sponsorships or work with someone who does and will charge a sales commission. Proving your value to a sponsor is really important. We regularly hear concerns from producers that pre-roll sponsorships take away from the aesthetic of a show. In rare cases, sponsors will donate money just because they are fans. Mostly, they are looking for customers and want to align their brand with yours. If you bury their brand, they might not stick around. Think of sponsors as partners.

Sponsorship Math. Big podcasts with over 1M+ downloads can command a high CPM (cost per thousand). Smaller podcasts can charge anywhere from a $15 – $30 CPM. The reason we suggest waiting until you have 20,000 downloads is simple math.

20,000 downloads / 1000 (cost per thousand) = 20 impressions (downloads)
20 impressions x $15 CPM = $300 for a :15 to :30 second spot in your podcast
20 impressions x $25 CPM = $500 for the same spot

You can see why anything below 20,000 is not only hard to sell but a lot of work for you. Grow your audience first.

Business entity and taxes. Say you are lucky enough to get donations and sponsorships. Yay! Remember this is all taxable income unless you are a non-profit organization. If you are big enough to hire contributors and you can pay them with your earned revenue – you will need to provide them with tax documents at the end of the year since any amount over $600 paid to them is taxable. If you are the collaborative type, which we love, remember that someone or some thing has to be the taxable entity. If you are thinking of starting your own non-profit organization, think hard on this. There is a lot of overhead and the entity will own the content. You then become a volunteer or staff member that answers to a board of directors.

Onward. Audiences are seeking, discovering, and listening to podcasts more and more each day. There are new lessons to incorporate and new services that will provide a glide path for audience growth. It all starts with making awesome content; the rest will come. Hopefully these tips will start you on your way.

Kerri Hoffman

About
Kerri Hoffman

@kerriprx is the Chief Operating Officer for PRX, an award-winning nonprofit whose mission is to harness technology to bring significant stories to millions of people.

Comments

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  • Casey Martin

    9.09.14

    Reply

    Thank you for the advice and tips! With plenty of “expert” advice on the web, it is good to hear from a working professional in the industry.

  • Stephanie

    9.10.14

    Reply

    Thanks Kerri for the number crunching – that’s all extremely helpful information!

  • Diane Hope (@dihope7)

    9.13.14

    Reply

    A splendidly helpful – and, for me, timely – article. Many thanks! https://www.kickstarter.com/projects/385319600/k-drama-insider-podcast/comment

  • Ashley Milne-Tyte

    9.15.14

    Reply

    As a podcaster of two-and-a-half years standing I’m happy to read this. But I know from experience that the information about sponsorship isn’t accurate – or at least it’s not set in stone. 20,000 downloads per show? I wish. Maybe I’ll get there one day, but I am nowhere near that now and I’ve had sponsors for more than a year. Am I earning a living from it? Hardly. But if sponsors/partners are interested enough in your brand, they will sign on with an audience far smaller than 20,000 for the same money mentioned above. Growing your audience is a job in itself. Those of us who are small, one woman/man shows, without a big media brand behind us, need determination and faith to keep going.

    • Chika Chukudebelu

      10.04.14

      Reply

      Ashley, you should definitely keep going. I love your show and binge-listened to your show from the first day I found it! Your show deserves a HUGE audience.

  • Leonard Sipes

    10.07.14

    Reply

    AS always,
    As always, it’s a matter of measurement. My award-winning government podcasts (http://media.csosa.gov)get between 600,000 to 1.4 million page views a year (server statistics) but we do not measure downloads. We do very well on Google for key topics and we’re well known within our specialty with interviews attracting industry leaders.
    Based on the above, we believe that we are successful.

  • Fitz

    12.18.14

    Reply

    I find the CPM section of this article troubling. No one will ever survive if they base it on those numbers. If you are a podcaster or any web content creator, you need to sell based upon something other than CPM. You need to sell ad slots based upon your audience’s passion for your show/site/content and their demographics. You need to evaluate your time, hours you put into it, overhead and generate ad prices based on that. Not some number that some ad exec created so they could undervalue creative content online so that they can shave off the top of their ad buy. I’m sorry. Those CPM’s won’t work out. That’s why the NYTimes is laying off reporters. Their content is beautiful. They’ve got a most cherished demographic that is religious in its following. And yet they’ve let an off kilter market place completely screw them over. We work with big clients that continually struggle to correctly value their CPM and it’s killing them. Better yet don’t ever use the term CPM when you are approached by or approach a sponsor/advertiser. Sell your insider cred of the topic you care about. Sell your passion. Sell your audience’s passion for the topic.

    You make the product, so you are the one who knows the price of an ad slot on the show. Remember that. If you believe in your craft, you need to believe in its value. An audience will ultimately determine whether you are legit, but get creative. If you are serious about a career in this, figure out what you need to live doing what you love and figure out how to charge advertisers for it. And think of it like this. If you organized a music festival and 20,000 people showed up for it what would you charge a company to sponsor the event? $500? $5,000? $50,000? Higher?

  • Sam

    1.03.15

    Reply

    I have read all comments and you guys are wayyy on a different level.

    Just got into the podcast business here in my school with about 33,000 students and a possibly wider audience when I expand. Where can I get useful advice and guidance?

  • Amy Martin

    1.06.15

    Reply

    Thank you for this great article! I’ve read and re-read it multiple times.

    I have a follow-up question about audience measurement. If a station has 140,000 weekly listeners, does that mean they are considered to have 20,000 listeners/day? Or another way to ask the question: if a program is aired once/week on a station with 140,000 listeners/week, how many listeners can that program claim to have via that station? I’m trying to figure this out in order to calculate sponsorship rates.

    Thanks to anyone who can answer, and thank you, Kerri, for taking the time to provide this guidance.

  • bill calhoun

    1.13.15

    Reply

    Excellent Format of presentation Kerri. You raise some valuable questions. You’re engaging opinion right here and that’s a tremendous asset for helping me get into the biz. I’m a Californian stationed in Asia and plan a bit of reverse entrepreneurial podcasting. Observing what and how you and others here are doing it inspires me. Thanks

  • Andy

    2.21.15

    Reply

    I was looking into adding a donation button, but on the paypal website, it says that unless you can prove you are a non-profit, I won’t be able to get any of the money. How exactly does this work?

  • Anthony

    3.04.15

    Reply

    TheStarve.com Where starving artists come to feed

  • Chel Hamilton (@HypnotistChel)

    3.09.15

    Reply

    Thank you so much for the information in this article!! I just launched my first podcast, (Meditation Minis Podcast) last month and in 33 days I have nearly 14,000 downloads. (it’s a weekly podcast) but had no real idea if that was good, bad, or average. Monetizing numbers are so difficult to find below the “our podcast has 1 million downloads per episode” so again THANK YOU for your post. Super helpful and let’s me know what I need to be shooting for… Especially when I am no longer “New & Noteworthy” eligible anymore. XOXQ! – Chel

  • Garrett Glaser

    3.20.15

    Reply

    Excellent piece Kerri. Thank you.

  • Rick Tocquigny

    9.25.15

    Reply

    Thanks Kerri. I would love to talk to your team about our Life Lessons podcast. We are approaching one million downloads, but need your advice on further monetizing.

  • Denny Immel

    11.18.15

    Reply

    What is the difference in charging $15 vs $25 CPM? What justifies your charging $10 more for one—it’s the same amount of impressions, right?

    • Nicole Valentin

      11.29.15

      Reply

      Demand. When you start out, you charge less because there’s no demand. As you prove to be a good investment, you can start to raise your rates as demand increases to control your “ad space inventory”

  • Scott Philbrook

    1.16.16

    Reply

    Do you charge taxes to the advertiser when invoicing them for a sponsorship?

  • Denny Immel

    2.07.16

    Reply

    Thanks Nicole for your important reply and thanks to you Kerri for making this blog available—it is really important to beginning podcasters—real important! And thanks to every one else who has contributed here. Please keep the comments coming.

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