With Spotify’s recent move to buy Gimlet Media for more than $200 million, it seems like there’s gold in
them there hills podcasts after all.
Starting out life by documenting the trials and tribulations of their start-up phase with the aptly named StartApp, before growing to convert one of their own podcasts into a TV show starring Julia Roberts, the meteoric rise of Gimlet has certainly taken more than a few commentators by surprise. Doubtless, there will soon be a swathe of imitators eager to repeat their success.
But how does a company that produces free audio content even get to be worth $200 million?
It’s a perfectly valid question. Talk is cheap, after all. The vast majority of podcasters produce their shows in spare time as an alternative to the ubiquitous blog of the early 2000s. As such, podcasts are a labour of love, and nothing more. We can’t all be Gimlet.
To any podcasters whose hearts are broken by that, my reaction would be – ouch. If it’s money you’re after, you might want to look at a different hobby; like banking, or larceny. If your sole motivation for starting a podcast is money, you’re almost certainly setting yourself up for disappointment. That’s not to say money can’t be made. Only that there are a great many other ways that podcasts generate value for content creators (and supporters), besides income.
Perhaps we’re getting ahead of ourselves. Let’s start with the rare bods who have made small fortunes from their pods. You know… The real freak cases.
There are definitely a few notable successes that have transformed their podcast dabbling into full-time gigs. Popular independent shows like 99% Invisible and Lore have all become veritable business empires in their own right since launch.
But there’s no way to guarantee a show will end up trapping lightning in a bottle. What we can do, is attempt to explain how money moves in podcasting, and how brands can and should get involved.
Broadly speaking, there are five ways that podcasts generate money:
1) Sell advertising space
A study in the US by Edison Research found that 65% of podcast listeners consider the product they hear about on the shows they listen to. There’s a reason that brands like Squarespace and Blue Apron include so much podcast advertising in their marketing – it’s trusted, and it works. Audiences feel considerably more positive about the products that advertise on their favourite shows. More so than print or television advertising in many cases. Maybe it’s the added believability that comes from a friendly, familiar voice? Either way, it works.
2) Sell experiences
Podcasts are an asynchronous, on-demand broadcast format. That means that when distributed, listeners hear them in their own time. They can pause, rewind, and re-listen as much as they want. Which is a good thing in many ways. But there are plenty of podcasters that add a premium option for engagement by selling tickets to be there in the room while the content is recorded. This includes Q&A sessions with experts, and sometimes even audio participation, especially thanks to the rise of live events like the London Podcast Festival. For super fans of what you’re doing, the cost of a ticket is a small price to pay to be a part of their favourite podcast.
3) Sell merchandise
T-shirts, mugs, tote-bags… the world of podcast merchandise may suit some productions more than others. Despite that, if you’re serving an audience with regular content that they enjoy, you’ll never have a hard time finding someone willing to part with a little of their hard earned cash in return for something they can wear or use with your show’s logo on it.
4) Sell subscriptions
Offering a subscription model for access to exclusive additional content via services like Patreon or Drip is now a common practice for many podcasters. It stands to reason that for the most die-hard fans of your free content will be willing to pay a small monthly fee to both support the show and give them more of the content that they love. As more and more traditional publishers like the New York Times begin to run paywalls and subscription services, then there’s no reason podcasters can’t follow suit, provided they have the audience base to support their essential running costs.
5) Sell yourself
The final podcast revenue is by far and wide the most important; also the most commonly overlooked. If you are a podcast producer, your show is an advert for you. As long as you create content that you are able to speak about enthusiastically and authentically, then your audience will know that you are a knowledgeable and entertaining authority on your chosen subject matter. They will feel like they already know you, and have a deep connection; one that can help open up all kinds of career opportunities, not limited to widen your existing customer base.
So the question remains – should you; or your organisation, start a podcast?
The answer is a firm and resounding MAYBE.
If you were to ask should you be aware of podcasts that are appealing to your audience and peripheral to your field? The answer to that is a big booming HECK YES.
Whether you’re sponsoring branded content, appearing on relevant shows as an interviewee, hosting live events, or even simply commissioning an audio ad on a few key shows, the bold new frontier of podcasting is bountiful and rich. It’s time to saddle up.
If you’d like to hear more about the many different ways your brand can (and should) get involved with podcasting, why not drop us a line?
We have experts on everything from finding influencers with the right shows to pair with your brand, through to audio-production and distribution. We even host the Brighton Podcast Meet-Up, where advertisers can meet content creators to discuss collaboration opportunities. Why not come along to our next event, and see what sparks your interest?