If you have ever heard of Casper, Blue Apron, Squarespace, or Hover you’ve probably listened to a podcast or two, and you’re not alone. In a recent survey by Edison Research it is estimated 48 million people in the US listen to podcasts on a weekly basis, which is the highest it’s ever been in the 12 years the survey has been going on.
Of those people who listen to podcasts, 44% of them listen to “most of the podcast” and 43% of them listen to the “entire podcast episode.” Which results in a whopping 87% of listeners that are consuming most, if not all, of every podcast they listen to.
These numbers aren’t just showing the rise of podcast listening, it is also indicative that podcasting is a growing market for business as well.
A staple in revenue for podcasting has almost always been advertising in podcast episodes. For years many brands have seen podcasts as a way to get new customers to buy their products or services, and it seems to be working. According to a survey from AdWeek 65% of listeners said podcast ads increase “purchase intent.”
The one caveat that comes with podcast ads is you need a lot of listeners in order to consider making podcasting your main source of income. The number I have heard over the years to garner any attention from the premium advertising brands is around 5,000 regular listeners per episode per month. I then had this figure corroborated by Libsyn, the largest podcast hosting service.
Now, this isn’t something that is undeniably true, if you have a podcast about subscription boxes, for example, you could get someone like Loot Crate to sponsor your show. Or if you have a podcast about Top Level Domains companies like Hover could sponsor you as those listeners are much more catered to their product. It is all relative to what your podcast is about, but in general 5,000 listeners is where big brands start to look at your show as an avenue for advertising.
To put this into perspective, Libsyn posts their monthly statistics across all of their shows, here is what they found for the month of January 2019:
- The median downloads per episode is 124 downloads per episode in 30 days.
- The adjusted mean (meaning they threw out the top 0.5% of shows and any podcasts getting 3 or less downloads per episode) is 1491 downloads per episode.
- The total podcasts that get 5,000 downloads or more, which is the sweet spot for advertisers, is only 7.1% of all podcasts on Libsyn.
In a nutshell if you want ads you have to beat 93% of all podcasts in order to make that a real possibility.
These numbers shouldn’t be discouraging though, because advertising isn’t the end-all-be-all way of making money in podcasting, in fact there are many ways you can gain revenue from your podcast directly from your audience.
Patreon has become a Goliath over the years for creatives seeking support from their fans. Artists, writers, Internet personalities, and podcasts have all flocked to this platform because it has become one of the most popular ways for supporters to directly pay their favorite creators.
Shows like Do By Friday and Chapo Trap House are among the most successful shows on Patreon racking in thousands of dollars a month from their supporters. So, Patreon is the perfect place, right? The answer is much more complicated than you may think.
While Patreon has garnered a lot of attention and recognition over the years it hasn’t been without controversy. Back in 2017 Patreon made a public acknowledgement that they are lowering the amount of money they will be taking from their creators after criticism they received. In part, this is what Patreon said in late 2017 about the changes they were making:
”Aside from Patreon’s existing 5% fee, a creator’s income on Patreon often varied from month to month because of third-party processing fees. And, patrons may not have been aware that creators actually take home a lower percentage of their intended pledges because of those fees. Our goal is to make these paychecks as predictable as possible, so we’re restructuring how these fees are paid.
Starting on December 18th, a new service fee of 2.9% + $0.35 will be paid by patrons for each individual pledge. (To get into the details, existing per-creation pledges for posts made on/after Dec. 18th will be charged the new service fee; existing per-month pledges will first be charged a service fee on January 1.) Streamlining these fees for creators and patrons ensures that creators take home as much of their earnings as possible.
We want you to know that we approach every change with a creator-first mindset, aiming to help creators grow their businesses. In preparation for this change, we ran experiments and months and months of research to understand patrons’ potential reactions and we found that many patrons were happy knowing that this change will send more money to creators. While some patrons may leave in the short-term, we know this will help creators earn more money in the long term.”
Aside from money, it can also be difficult hosting a podcast on Patreon. Stephen Hackett, founder of Relay FM told me in his decision to use Memberful, another option to offer paid memberships for fans,
“We had friend already using Memberful, and now Memberful is owned by Patreon. But I liked how you can make Memberful a separate system. We have dozens of plans, and Patreon isn’t really meant for that kind of scale, and Memberful allows for that. It would have required a lot of hacking in the system to get it to work the way we needed it.”
Even now, Patreon still receives criticism for how much they take off the top from the creators on the platform, as well as the difficulty it can be having a podcast on their platform compared to other art forms. When I asked Patreon about their thoughts on the criticism they failed to respond to my attempts for comment.
Among those who feel Patreon is charging too much is Jamie Perkins. In part of this he decided to make his own platform for podcasters looking to monetize. He calls it PodFan.
PodFan is a “podcast first” platform where podcast listeners can pay their favorite podcasters for extra perks. These perks could be things like merchandise, shout outs, access to exclusive content, a subscription to a newsletter, or all of the above. It also has the ability of offering a member-only feed for exclusive episodes and such. Jamie says,
“It is all about memberships for podcasts, so what that means is that it allows people to subscribe not just to your podcast, but actually with a payment. So they pay you monthly for any kind of reward you want to set up.”
On the surface this seems very similar to Patreon but what sets itself apart is the pricing. Instead of taking a percentage of all money donated to the podcast Jamie has decided that PodFan will take a flat rate of $0.30 per subscriber. Which means you can offer members to pay $10 a month, and after that $0.30 is taken from PodFan you get $9.70 per subscriber, which is a 97% return. If you were to use Patreon, for example, you would be making slightly less. On the other hand, if you were to offer a $2 tier you would only net $1.70 after fees which is an 85% return.
Jamie does express his feelings that users on PodFan will make more money then they would on Patreon saying,
“I think you'll make more money on Podfan but also when you get a Podfan page it is podcast first."
“With Patreon it is kind of open ended, and you have to kind of hack it a little bit to use it for how you want with podcasts, and the idea with PodFan is it is all podcast first and designed for people with podcasts specifically. So hopefully that makes it a little bit of a better option than Patreon. And I know that a lot of podcasters have had issues with Patreon with how they're skimming the payments and I know that a lot of people got frustrated with that payments model and I knew that I wanted to do a different payment model that is still sustainable but offers people a little bit more straightforward less chance for shady business operations, it is just more straight up transparent, clear, easy to understand.”
After seeing a preview of what PodFan will look like once they launch in the Summer of 2019, I have to say it is very well designed and something many will be happy to use. It offers many of the same things Patreon offers, but it also allows for a much easier experience navigating the pages of creators.
Both Patreon and PodFan are great options for single podcasts, but what if you have an entire network of podcasts you want to offer memberships for? The answer for co-fonder of Relay FM was Memberful.
Memberful is a service that offers a way to have memberships for independent creators with a lot of flexibility. Relay FM offers several options for each of their 26 shows, including one to support all of the podcasters on Relay FM.
Stephen explained that sites like Patreon doesn’t offer this kind of scale and Memberful was an easy decision for them as they already knew people using the service in similar ways.
Memberships like this aren’t the main way Relay FM makes their money though, they have advertisements on a majority of their shows. That said, Stephen does say that memberships like this is important for both the business and the listener.
“Relay makes money in advertising, the membership is good money but it is a relatively a small part of the pie still but its more about having a place and having a way to have a greater connection with listeners and and we get to support our hosts directly in a different way which is nice.”
“We do not offer ad-free episodes to our listeners. The overhead for that would be too great, the membership is more about extra stuff on top of what the public shows. So the big thing is in august and September every year every show publishes bonus member only content.”
The one thing that may be worrisome for Stephen and Relay FM is that recently Patreon acquired Memberful. As of now, Memberful is still operating the same it did before the acquisition but Hackett has thought about what could happen if things change at Memberful saying,
“I know the team at Memberful, I’ve spoken with their CEO in the past and they say that they’re excited about their future and I believe them when they say that but at some point they may get absorbed, right now you would never know they were owned by Patreon, it is the same product it has always been. I guess we will see where that goes, for now we are really happy with he service and I’m glad we’ve chosen it and if we need to evaluate it in the future we will I guess. I do know that people use Memberful for specific reasons and unless Patreon mirrors all those features it isn’t going to work for us.”
Thankfully, according to Patreon after the acquisition, they don’t plan on making any changes to the platform saying,
“The Memberful platform and brand will remain independent, the current product roadmap will continue at a faster pace, and existing creators using Memberful will not experience any immediate changes to the service. The Memberful team will continue supporting independent creators and building the Memberful service as part of Patreon. As it will operate as a wholly-owned subsidiary of Patreon, Memberful currently has a different pricing model than Patreon that is built around three tiers which will remain unchanged for existing customers.”
The one thing of worry here, at least to me, is that who’s to say Patreon doesn’t pull the rug out from under Memberful and make them adhere to new guidelines and rules that can make things like the Relay FM memberships no longer be allowed? There isn’t any kind of evidence supporting this is what Patreon is wanting to do but I also feel it isn’t outside the realm of possibility.
While Patreon, Memberful, and PodFan seem like great places to start there are other avenues you may want to look into that I felt are worth sharing, but not necessarily where you would be. one-stop shop.
Overcast is not only a tremendous app for listening to podcasts, it is also one of the most popular. Creator of the app, Marco Arment, has also added support for having a special highlighted link in Overcast with some simple HTML code.
I put this here as an honorable mention because I haven’t used this app enough to really know if it is indeed something podcasters should start promoting.
I will say, in my own experience with PRX, they know what makes good radio and have yet to show any signs of wanting to change podcasting for the worse.
Jake Shapiro has taken the reins of RadioPublic stepping down as CEO of PRX and becoming CEO of RadioPublic. Shapiro is a radio legend and has done tremendous work for public radio and podcasting; which is why I feel RadioPublic is in good hands.
Ko-fi is a way for people to support creators with a simple URL and payment options, both one-time and recurring. Once you sign up you can share the URL to their Ko-fi page and people can tip you any amount of money they desire. This is also something I have seen creators use in the past, but it isn’t something I am familiar with enough to go into great detail.
Ko-fi does offer a beautiful interface and website that explains what they offer any their story, which I think is worth checking out. They are also a “PayPal Partner” so you can use PayPal as a means for donating and receiving money with this platform.
When Should You Start Monetizing?
Now that you know all the different avenues you can look into to start getting support from your audience outside of advertising, there’s just one question you need to answer: when should I start doing this? The answers I got when I asked them were very different depending on who I asked.
Jamie Perkins of PodFan says,
“I would say right away, because it is designed to be easy to set up. Once you've added your feed to Podfan and created your URL you have already created a PodFan page it;'s just a matter of setting up rewards after that. and then it’s just there and its doing the work for you. But I think as with all podcasts you should always focus on your content creation as much as possible and let these services to offload all the other things you have to do with your podcasts and just be able to focus on your content creation as much as possible.”
On the other side of the coin Stephen Hackett of Relay FM says,
“I think if you're looking at implementing something like this spend a lot of time thinking about what you're willing to do and for how many people and I think the answer is always to start small and work your way up.”
“If you're planning to do this just spend time really outlining the perks you want to do and if you have a bunch of ideas you don't have to roll them out in the beginning. You can use that as a way to promote the membership. You can only roll out with 2 or 3 perks. Especially if you are unsure of how many people you bring in.”
The Case Against Monetizing
Making money from a podcast sounds great on paper, but in reality it amounts to a lot of hard work and dedication. It should also be stressed that the money you can make in podcasting will most likely not be enough to quit your day job. Very rarely do we see podcasters make podcasting their main source of income, and its because it isn’t easy. There is a reason only 7% of all podcasts average over 5,000 download per episode per month. I plan to go more in depth about this later, but for now I want to make it well known that it can be difficult to make money podcasting; and you don’t have to try and make podcasting a form of income.
I personally have had podcasts that sold ads and it wasn’t fun for me. I hated the idea of abiding by some set of rules for my show in order to sell ads for it. I was never happy with the money I was making from it, and I eventually decided I would never do advertising again for my shows. My reason for it was simply because I felt this unrelenting pressure from myself to overwork on my podcast and this previously fun thing I was doing quickly became a chore I was dreading. For me, podcasting isn’t a career I am actively pursuing as a means of income. This is a hobby for me, it is something I enjoy doing for fun, and who wants to make something they do for fun into a job? For me that is a good way to never do it again.
When it comes to monetizing anything creative it can be hard to get your foot in the door. Gaining some money for making what you love is something all creatives are excited to make happen, but those who do are sparse.
I don’t mean to make this sound discouraging but in my opinion you shouldn’t be actively seeking to make money on your podcast until you have honed in on your craft and your audience. If you try to make money without having both of these lined up you will likely not see anything positive coming from you search to make money with a hobby.
If you have honed in on your show and you know what you want to do, I highly recommend you look around before you load up that pitch deck of yours. You may find yourself surprised by what happens.
UPDATE: After publishing Jamie Perkins has informed me the pricing of PodFan is no longer $0.25 per subscriber, it is now $0.30 per subscriber. I have updated the percentages in the article. Jamie has expressed the price change will not happen again.