How to make money from a podcast

Voice Over: 00:00:00

Got dreams of being a professional podcaster but have no idea what you're doing. This is impossible. That's about to change. A new kind of school. Welcome to the PodSchool podcast.

Rachel: 00:00:10

Hello, welcome to the show.

Today I'm going to be answering a question that I get asked a lot. I can't tell you how many times that I've been asked this question. Phil has asked it and he has asked, how do you make money from a podcast?

I can understand why this is everybody's obsession because it seems like a lot of money is floating around the industry and it is. There's been a lot of big payouts, a lot of big news money being made left, right and center.

And so it's gotten into people's minds that this is the way to make bank. And I just want to start by saying the vast majority, and I'm talking the very vast majority of podcasts never make a dime.

So the idea that this is a sure fire way to buying an island is the wrong way to think about it.

If you are moving into podcasting because you're like, I want to quit my job, I would think about a different path because sure, you might be able to quit your job, but you're going to need to be into in this for longer than six months, probably longer than maybe six years. I've worked with some podcasters who have not monetized their show effectively until they've been doing it for over 10 years.

So you really need to be thinking, this is something I'm working towards and I'm going to be doing what I can to get to that point. But it is not the single point of focus because it's just too hard to control.

Everything is dependent on do you have an audience, do you have a community that likes what you do? You will not know that until you start your show.

And the numbers of your show, the downloads will likely be significantly smaller than you think they are going to be. Most people jump into podcasting thinking, right, I'm, I'm going to probably have like tens of thousands here.

Those if you're getting tens of thousands, you are like in the top 2% of shows. Most people are getting tens of listens. So you really need to adjust your expectations.

Having said all that doom and gloom, sorry to start on a bit of a down point there.

There are a lot of options that you have to monetize your show and the best options are often, especially for shows with smaller audience, definitely not ads. Ad ads are sold on a cost per meal basis. So that Means cost per thousand downloads.

And those costs are often depending on which way they're purchased. It might be $25, might be $65 if it's a sponsorship, might be $11 if it's sold programmatically.

But you need a lot of 1,000 blocks of downloads to make that $11 stretch. So when it comes to making good money from advertising, you need audience to do that.

So that is only an option for really a very small portion of podcasts. And you certainly need to have at least 10,000 downloads, usually within the market that you are in.

Because if you're going to maybe partner with a network or maybe not, if you're all on a platform that serves dynamic ads and they're served internationally.

But if you are going to partner with a network and you're going to try and get sponsorships, because sponsorships are really the most lucrative type of ad, it's got the highest seat cpm, then the focus will be on what downloads do you have in that local market. So you will likely need. In Australia, it's around 10,000 at a minimum.

In the US and UK, it's much bigger than that because their audience size and their population size is so big. So advertising is definitely an option. It's just not the option for most shows.

So really, I think park that, at least in the beginning, until you get to a point where you're like, holy crap, I've got all this audience and I don't know what to do with it. But also, you can find some really creative, interesting ways to monetize your show.

And monetizing your show isn't just I sold an ad that got me money. It is a much more nuanced thing. So let me take you through some of the other things that you can do.

The first is that you can sell your own products and services. So, for example, I have this podcast. I also have a online podcasting course called Pod School.

A lot of people find me through this podcast, realize that I know what I'm talking about, get to the point where they're like, okay, I think I might need a bit of help with this. And then they come into my online podcasting course that is monetizing my podcast. I will promote it on this podcast. But I'm not necessarily.

Sometimes I'll do ads. I've been experimenting with that and seeing, oh, do I want to just talk about it in the show or do I want to run ads in the show?

But ultimately, people are coming through this podcast to purchase something that I have created so you can do the same thing. You know, you might have a knitting show and you want to sell a subscription to a wool service and you can get a.

I don't know, do you make your own wool? I don't know. I'm just coming up with an idea.

But you know, you could really think about anything that you could monetize in your show that your audience would find valuable, that they would get use out of. That makes sense in terms of how it relates to your content. And then that could be a way to monetize your show. So that's something to think about.

I think where this works really well is if you're an expert in the space or you're an educator, you've got consulting, you've got templates or guides or things that you can give people that are going help them with their knowledge. This is where this stuff really works. But there's a lot of other ways that you can work.

You just have to think creatively and sit down and go, actually, what could I create that could be really useful for my audience? So that's something to think about. Affiliate marketing is another great way to monetize your podcast.

You might be recommending all manner of products that you get a commission from or services. Or maybe you've done somebody's course and they run an affiliate program.

Or maybe you're just recommending things from Amazon and they run an affiliate affiliate program. So you could have links to this on your website, you could share these affiliate links and you can make a small commission.

Now the commission isn't massive on these kind of things, but if you're constantly recommending these things and you've got blog posts that relate to this content and they just sit on your website and people can find them via SEO over time and they might click on it even four years after you've released this episode.

It can be a little trickle of income that comes in and really you need to think about what are the ways that I can diversify my income from my podcast. It's going to be rare that you are going to earn enough from one stream to just make that everything some people do.

But you really need to look at a bunch of different options. And then if one is bringing in more revenue for you and you can drop the other ones, then fantastic.

But affiliate marketing is a great way to kind of just chip away at a little bit of revenue. The next way is through subscription based monetization.

So obviously Spotify, Apple have both stepped into this space cause they want to make money off your podcasts so you can get a subscription, listeners can get a subscription through there, and you can offer free bonus content for that subscription so that they get something for what they're paying. Naturally, your Spotify subscription is going to be for Spotify users only. Your Apple subscription would be for Apple users only.

So it's just something to be mindful of that you would, you know, likely you would want Apple and Spotify and a few multiple different ways, because you don't necessarily unless like 90% of your audience is on Apple.

Then it would probably make sense to do an Apple subscription, but you're likely going to be doing the same bonus content for all of those platforms anyway. So because you don't want to have like some bonus content for Apple people and some for Spotify, but you do need to create something additional.

You can have people just subscribe because they like what you do.

And I do actually subscribe to a podcast actually via Patreon, because I like what they do and I find value and I know that it takes a lot of time and effort for them to research and know, be across all that stuff. And they save me a lot of time. So I don't get any additional benefit for that subscription.

They do shout me out in the episode, which is lovely, but I don't get any additional content. But I don't want any additional content. The content that they're giving me is plenty and I feel find real value in that.

So you can get to a point where you don't actually offer anything extra, but you better be adding value to your audience because nobody's going to pay for something if they're not getting real value. And this is where all of this monetization begins. Do you have a community that would pay you money? Is your audience big enough?

It doesn't need to be massive, but is it big enough, strong enough, committed enough to say, I want to part with some money to either keep your show on air, if you're just going down the route of like, hey, just support the show because it cost me money to do and I'd love to keep it on, or here's some bonus content for you to subscribe. Either way, you have to have people that are going to be willing to part with their money.

You can also use a platform like Patreon, as I mentioned, Substack as well.

Substack is really becoming massive across the board with podcasters as well as bloggers and writers because it is a great way to monetize your content. They have quite A good sort of discoverability engine within their platform. So they're always surfacing new content, which can be really good.

If you don't have an existing email list or newsletter and you want to start on a platform like that can be a good idea. They also allow you to do paid podcasts.

So if you want to have people subscribe and they get their own independent feed of a private podcast that you've created for your paid subscribers, that can be a great way to do that as well. So there's plenty of different platforms out there that are going down this path. You just need to kind of work out which one you should go with.

Patreon again, as I mentioned, that's often more of a donation model. And Buy Me a Coffee I think is another platform as well.

And really what those platforms are often saying is, hey, do you want to pay to basically say you like this show? So those kind of things can be a good way to get money in from people that love what you do.

And I've had quite a few podcasts investors that make a lot of money from this path because they have built that loyal fan following. They love what they do and they're bringing in a significant amount of revenue. Same with substack.

I was speaking to a friend of mine the other day who has a podcast. He's got a really big audience, but he's getting more than a full time wage off his substack and that is pretty incredible.

So it's allowed him to hire a producer. You know, it's really amazing.

Now he's been doing that show for a lot of years and it was big internationally, so he does have a lot of audience to draw on. But these kind of things can become a real revenue stream for you if you have the right audience there.

And if you don't have a big enough audience to go down that path, then sometimes some of those things like creating your own product or, or thinking about affiliate marketing, those can be the better options for you. Finally, I'd say sort of live events can be a really good way to make money as well. There are a lot of costs involved in that, so be mindful of that.

You know, you have to hire a venue and get all of that sort of stuff happening. So it's, it's not actually easy to make a lot of money.

But if you've got a significant audience and you sell tickets and you know, you can actually get to a point where that does make a decent amount of revenue and there's certainly a lot of shows that do that. But again, with the live events thing, you have to have a really big audience to then get a small portion of that audience to turn up in. In person.

That's the thing you ought to think about with all of these subscription models. 100% of your audience is not going to sign up for your subscription. 100% of your audience is not going to turn up for your live event.

So your base audience needs to be big enough for the percentage to be big enough to fill a room or to get you enough revenue that it makes sense for you to be creating additional bonus content every week for your subscribers.

If you're offering a free couple of episodes in addition to the episode to get people to subscribe, but there are three people subscribing, is it worth the additional time that you are putting in to create that content? Potentially not, but that's something to think about to that percentage of your audience that are likely to go and do something like that.

But if you get to a point where you're like, actually these fans really love what I do, then you could sell live events and you could also sell merch and all that kind of stuff. So all of these are different ways to monetize the content.

Obviously, with YouTube coming into the space as well, if your videos are doing well on YouTube and they hit a certain threshold, you can make money on that. You're splitting that revenue 50, 50 with YouTub YouTube. It's not sometimes massive unless you've got really big views.

But that is another potential source of revenue for you as well. Platforms like Spotify for podcasters, you know, allow you to add ads into your content if you want to.

So there are podcast hosts out there that you can add, join their ad network and they will serve ads on your show. Now, again, these ads are probably sold programmatically, so they might not generate a lot of revenue.

And if you've got a small audience, you not might not be seeing much value. So you might think maybe it's not worth it. But you can turn those settings on in certain podcast hosts now, which are really good.

And some podcast hosts also allow you to sort of run those ads yourself.

So if you were to get a sponsor or you contacted somebody and you they got on board, or they reached out to you and said, hey, do you have sponsors on your episode? Then you can create the ads and actually insert those into your content as well, dynamically.

So there are a lot of different options that you have around monetizing your show. The other thing, if you're an expert, and you want to get more speaking gigs.

Your podcast is a great calling card or like a audio example of what you can actually do. So if that's building your authority online, that can then make people see you as an expert in that space.

Especially if you're creating social content around that LinkedIn content, blog content, people can find you and say, oh, this person would be really good. And speaking events can often pay really well.

And that if it's come through, somebody refining you from the content on your podcast is monetizing your podcast.

So I think sometimes that traditional sense of making money from a podcast feels like it's just advertising, but it is so much more complex and interesting than that.

And you can really come up with some cool ways to turn the content that you are creating and the brand that you are and the brand that your show is into revenue streams in different ways. And the space is evolving constantly.

There are a lot of platforms that are coming up with the sole purpose of working out how to help podcasters make money. Now, those platforms are taking a cut because they also are going to make some money.

But it is making things a lot easier when it comes to doing these kind of things. It was clunky and difficult years ago, but even a private podcast, you know, that was tech that.

That was only introduced not too long ago, but now there are lots of platforms that are utilizing that for you to get subscribers to come, and they get their own private feed and all those kind of things. So that tech is really, really growing and it's exciting, which is great.

If you do get to the point where you do want to sell ads on your show, then, and you've got the audience to do it, or you do find that somebody comes towards you and you've got a small audience, but they want to sponsor your show. Just make sure that you're really thinking about that, that commercial content like you're thinking about your creative content.

You want people to not skip your ads. You want somebody who comes and buys a sponsorship with you to say, wow, I actually got real value out of that. I can see there was impact there.

And they're not going to get impact if they skip through. If people skip through the ads and people will skip through the ads.

If you just read a script and you know you're interesting in your content, and then you get to the commercial and you're like, here is me reading an ad really boringly that no one's going to listen to. Make that content sound like content. Don't just make it sound like an ad, and you're going to know your audience, your content best.

So when you're working with an advertiser, ideally you want to have creative input and control over that. They will obviously want to approve things, but you want to say to them, I know my audience best.

Please let me tell you the best way that I'm going to keep them engaged and interested, because it's not going to be through reading a 30 second script. So that's really important if you want those ads to work really well.

So hopefully that has helped you kind of see some of the options that you have available. I would say at the base of all of this, trust and consistency and audience passion and growth is essential. So that is your base. So get started.

Build your audience, build your community, communicate with them, give them something of value. Then you can start to think about these monetization options because it really takes time and it's not guaranteed. Guaranteed.

And it doesn't happen for everybody. Even these smaller kind of other ways that you can do it.

You might never pull in enough revenue from your affiliate links or from Patreon or from Apple subscriptions to ever leave your job. So it's really important to understand that they could be a lovely little supplement if you're doing it.

But you might get to a point where you're like, actually, I'm putting in eight hours of my week to do this and it's not paying me enough. And then if you've got a community of people, you might be able to say to them, hey guys, I'm actually going to wrap this up.

If you want to keep it on, like, I'd love your support because there are shows actually that have done that and have been saved by that.

So, yeah, at the base of everything, community, connection, making sure you've got a bunch of people that love what you do, find value in it, because you're not.

You don't want to be a scammer, you know, if you're going to ask people to part with their hard earned cash, you better be giving something of value to them, because that is a big ask. And it's a pretty incredible position to be in to have content that people want to pay you for in some way. So important to think about that as well.

Hope that has helped you. If you have a question, just head to the description of the episode.

If you would like to jump into my online podcasting course, then head to podschool.com see what I did there. Monetizing my podcast. But you'll find all the details of what's included in that course, and you can join the wait list at that website.

And I will see you next week.

Voice Over: 00:18:26

That's all for today.