How To Make Money From Podcasts

This week, many conversations have been around the Top 25 UK podcasts list published by Edison Research. Joe Rogan tops the chart, which, as that show isn’t a UK production, means Steven Bartlett’s Diary of a CEO is the top-performing British podcast. Steven is a businessman who probably doesn’t need the revenues his podcast generates relative to his other investments. It reminded me of the perennial question of money. Does this podcast thing, actually, pay off?

There are three questions I get asked most when I mention that I'm in podcasting. In reverse order, there's “Which microphone should I buy?” In second place is “How do I start a podcast?” However, by far, the most common question is something like, 'How do I make money from a podcast?'?

From newbies podcasters to media investors and even established streaming platforms, we still grapple with making money from audio-on-demand. The economics of generating revenue from streaming or downloading podcasts. It's a thing we call 'monetisation'.?

There are ways to monetise podcasts, such as advertising, sponsorships, subscriptions, merchandise sales, and live events. Let's use the Unedited methods to break these down, grouped into three memorable phrases: We Pay, They Pay, and Someone Else Pays.

First is We Pay, the self-funded approach and the fastest way to make your podcast. Podcasters pay for their content by themselves. We Pay is often our first option for many creators. We want to get your podcast out to our audiences, so we stick your hand in our pocket, raid your savings, or budget carefully to put our own resources into telling your stories.?

At this point, I want to debunk a myth about self-financing. It does not indicate failure if you pay for your podcast, nor does it mean it won’t be a hit with an audience. Many new projects and initiatives are self-funded before establishing an audience. Jay-Z had to self-fund his first album, like many other creators. The key to being successful here is planning. Ringfence a budget, create an efficient plan, and stick to it. I know of an award-winning podcast series created for less than ￡4000. With the help of friends and volunteers, that relatively modest budget can go a long way.

So, how do we make money from We Pay? Self-funding is a long-term strategy to bet on yourself. It tells a potential sponsor that you believe in yourself and your podcast. You own all the intellectual property on the podcast and can negotiate licensing and syndication, which you can read about here.?

Next is the They Pay method. With this approach, your audience supports the podcast. You generate revenue from the people who listen to the podcast. When you have a sizable and consistent base of loyal listeners, they may be willing to fund your content. Ask them to contribute to your podcast if they like what you do. For example, you can offer monthly or annual subscribers exclusive content or early access to your podcast episodes for a small fee. Platforms like Patreon, Buy Me A Coffee or Kofi, and some streaming platforms allow you to manage this relationship with your audience.

Merchandise sales are also great for generating revenue from your podcast with a They Pay method. You can create branded T-shirts, mugs, or stickers and sell them to your listeners. The more innovative you can be here, the better. We’ve seen everything from podcasts cut onto a limited edition vinyl record to a few podcasts turned into a musical. Yes, live events provide a collective moment with fans to monetise your podcast. You can organise shows or tours where you can interact with your listeners and generate revenue through ticket sales, merchandise sales, and even sponsorships. It could take several episodes to get the most out of this method of monetising your podcast. Using our ￡4000 example, you could invite 200 listeners to a venue and charge ￡20 per ticket each. Don't forget that you will also have to pay for the venue hire, set design and any associated costs.

A third option is Someone Else Pays, where an external person or organisation funds the production. We have partnered with broadcasters and distributors like BBC, Spotify or Acast to license your podcast or approached brands that align with your podcast's theme or topic and offer exclusive sponsorship rights. In return, they give us a usage fee and promote their products or services during your podcast episodes. Digital streaming platforms may also want to sell advertising around your podcast, for which you could get a share of the revenue.

Of course, you can sell ad space directly to brands within your podcasts and charge advertisers based on the number of listeners or impressions. However, you will first need an audience that aligns with their product or service. So, it is essential to identify your target audience and create content that resonates with them. The podcast industry is quite shy about making these kinds of deals, so expect to be in negotiations for at least a year (in the UK) before getting on their books.

Another way is to get Someone Else to pay for your podcast. You can leverage existing relationships to support podcast growth. There's an old sales adage: selling to an existing customer is more efficient than finding a new one. It is worth speaking with current partners about them joining you in the leap into podcasting. They could shell out for the production without wanting anything back other than the kudos of having their name on a podcast. These are unicorns, so guard them with your life.

When asked about wanting to make money from podcasts, I often reply, “Why?” What is it you want the revenue for? It helps me understand what is important to you about making money from a podcast. Like any product, there is a cost to make it (production). Then there is a cost to share it (distribution) and finally to let people know about it (promotion). Oh, and hopefully, you want to make some profit on it. We can talk about creating a budget for your podcast at another time.

If you want to pay your mortgage from the revenue generated from podcasting. It would be best to have a podcast network - about 15 to 30 titles with a mix of monetisation approaches to grow an audience, sustain a regular subscriber base, and build relationships with streamers and broadcasters.

If you want to get your idea out without going out of pocket, do what we all did back in the day: save consistently with a target budget in mind. You might be able to borrow from friends and family, but start small. Three episodes first, then see what happens. If your audience is with you, make some more, and keep promoting it. Even if you are reaching 20,000 listeners each episode, the projected global market size of almost ￡3.3 billion by 2025, according to IAB, there are a lot more people you can attract to your podcast. Success in your business, podcasting or otherwise, is largely based on how many people know about it. A content mentor gave me this rule of thumb: aim to generate approximately ￡1 per listener from your audience. So, if you have 4,000 listeners, what can you do to generate ￡4000 from your podcast? Let's talk.

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