How Do Podcasts Make Money

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To monetize content such as writing, video, or audio, creators have the same options. A creator can approach businesses or consumers. In this piece, I will focus on podcast hosts.

Sponsorships

A sponsorship is when a company pays a host to promote their company or product on-air. The amount of money a host gets from sponsorships depends on many factors. One factor is when the ad plays during the podcast episode. Another factor is how long the ad runs during the episode. An ad can run three different times. The first time is pre-roll: at the beginning of the podcast. Next is mid-roll: stopping the podcast in the middle to run an ad. The last opportunity is post-roll: run after the podcast ends. The standard for the length of an ad during a podcast is 10, 30, and 60 seconds.

For a company to consider running ads on a podcast, the podcast needs downloads. The more well-known companies want high download numbers. The monthly downloads numbers companies want can range from 1,000 to 5,000 per episode. By monetizing with ads, a host is selling its entire audience to advertisers.

Affiliate Links

Another type of ad to monetize a podcast is the affiliate link. An affiliate link links to a product for a commission when someone buys the product with that link. A host can become an affiliate by signing up through an affiliate service. Another option is to use the affiliate program of an e-commerce store. The type of e-commerce store that sells many different products. By using affiliate links, a host can start to monetize their podcast as soon as possible. A host may only be monetizing a fraction of their audience with affiliate links.

Sell Products or Services

Selling products allows a host to remain independent. While providing extra value to their audience. A host's products can sell to their audience through an ebook, services, or a course. Selling products gives the audience a choice to pay, which may lead to low conversion rates.

Selling products or services is not an overnight monetization method. In most cases, the host has to take the time to create the product they will sell to listeners. A host sets the price for products or services. By setting the price, hosts can decide their own profit margin. For affiliate links and sponsorships, they have fixed rates.

To sell the product, a host can sell a product on their own. There are DIY e-commerce services that a host can list their product on. The services will handle payments and send the host a check every month. A host can add the product to e-commerce platforms. The platforms will take more money, but more people might buy the product. A host can accept donations for the product. Once a donation gets made, they send the product to a donor.

Listeners Pay

A host has the option to have the listeners pay to listen to the podcast.

Donations

For donations, hosts need to set up an account to accept donations from listeners. The donations would be optional for the listeners. If a host wants to make money from their podcast, they should set up donations before the first episode. Some podcast players will add a button for donations that opens up to the podcast's account.

Private Podcasts

A host can create a private podcast to monetize the content. A host might create a private podcast for their community members as a bonus.

Some podcast players give the option to add a paywall to a podcast. They take a cut of each transaction. They want hosts to drive traffic to them by promoting their podcasts on their platform.

Platforms Pay Per Stream

Some podcast players will pay hosts for their content. Every time someone listens, they get some money. Getting paid by a player is rare, but some will pay.

The amount of a host gets paid out is a fraction of a penny per stream.

My Opinion

Some podcast players are willing to pay podcast hosts. Paying podcast hosts should be the default. Musicians get money from apps. I do not see a difference between musicians and podcast hosts. Podcast hosts need to start getting paid by platforms. The average podcast host produces more content than Taylor Swift in one year but does not get paid.

Podcast hosts do not get money from every podcast player. Apple is the most significant podcast player. Apple has never paid podcast hosts. That set the standard for other podcast players.

Players and podcast hosts should enter a revenue share agreement. The podcast player could price ads on the popularity of a podcast. As the podcast grows, both sides will make more money. There is no downside for podcast players to enter a revenue share agreement. They will always come out ahead on the deal.

Conclusion

There is an underdeveloped ecosystem for podcast hosts to monetize content. While the number of podcast listeners is growing. The podcast industry is ready for disruption for podcast hosts to get paid. The problem is that any current player could add the same feature. Which would crush any new player.

As a podcast host, I have made less than $100 from selling products to my audience, for anyone starting from scratch. It will take a while to make a significant amount of money. The number of people listening to podcasts grows every year. The new listeners will find smaller podcasts and might find enough value to support them.