Since the dawn of the Internet, podcasting has grown to become the most popular way for people to consume information. As of 2018, there are over 5 million podcasts on iTunes alone.
Therefore, it’s no surprise that many people want to learn how to make money podcasting. It may come as a shock that anyone with an internet connection and a decent USB microphone under 100 can do it, but it’s true!
A podcast is an excellent way to reach many people.
Listener engagement is high. Listeners like marketing messages, and they’re usually making good money. It’s because they want to know exactly how to make money from podcasts.
Here I’ll cover some different methods for monetizing podcasts and talk through some pros/cons and recommend which ones would be best suited for your business.
How much money do podcasts make?
Podcasts have been around since 2004, but they’ve experienced a surge in popularity over the past few years.
In 2016, the podcast industry had over 40 million monthly listeners and there are currently over 460,000 podcasts available on both Apple Podcasts and Spotify.
The money that podcasts make depends on advertising and sponsorship deals. Podcast advertising is growing at a rate of over 20% annually.
The top 10 podcasts have combined annual revenues of over $100 million dollars.
Things to work out before you look to monetize your podcast
Now that you have created a podcast it’s time to start thinking about how to monetize your content. There are a lot of factors you will need to think about before jumping into monetizing your podcast. Do you want to do advertisements? Audience engagement? Patrons?
How Much Money Can You Make?
First, let’s look at the average amount of money someone makes with a podcast. According to Podcasters’ Alliance, the median annual income for podcasters was $20,000 in 2017.
That means half of all podcasters earned more than that and half earned less.
If you’re thinking about starting a podcast, don’t worry too much about the exact figure. Instead, think about whether you could earn enough to cover your expenses and maybe even save a little bit of money.
Ways to monetize a podcast
There are different ways to monetize a podcast, each with its pros and cons. The first thing you need to do is decide which strategy you want to pursue.
Active Advertising or Podcast Sponsorships
Active advertising is a form of marketing where the firm engages in direct interactions with prospective and current customers. The goal of this form of marketing is to increase customer loyalty and purchase frequency by providing information that helps customers solve their problems and identify the benefits they provide.
Active advertising is more complicated than passive advertising because you need to actively manage the relationship between yourself and advertisers. If done correctly, it can provide significant additional revenue streams.
The upside is that it provides greater control over the relationship between you and the advertiser. The downside is that you need to invest more resources to build a strong relationship with potential advertisers. A good example of this is the Joe Rogan and Tim Ferris shows.
A podcast needs basic monetization and this usually comes from passive revenue by way of ads. You will need to produce a lot of content for dissemination in various places before getting any income.
Originally, you might have a lot of work in order to get followers for your content at first. However, once people start following it and producing audiences, the benefits will follow for months or even years to come.
Advertising is very easy to implement and has low barriers to entry. The downside is that it requires a large amount of initial investment.
Podcasters selling courses
Podcasters are using podcasts to deliver course material for self-study. This is an inexpensive but effective way to have course material delivered directly to their listeners, which can be especially useful for lessons that require the use of specific software that may not be widely available.
They can set up an RSS feed that automatically alerts listeners when new episodes are released. Listeners who are interested in taking a course offered by this podcaster simply need to subscribe to the podcast and wait for new episodes.
These courses are usually available as downloadable eBooks.
These courses can also be sold directly through Amazon’s Kindle store. Some podcasters even sell these courses directly to their audiences.
It helps to build a good email list if you want to take this route.
Monetizing by offering services
Podcasters monetizing by offering services
Some podcasters are leveraging their larger audience to provide paid services. This allows them to support themselves while still hosting the podcast, and to give back to their audience with exclusive content.
Podcasters that turn to this strategy typically offer coaching or consulting sessions in either a one-time session or in longer, ongoing programs.
It goes without saying this would require you to have some sort of expertise in the field that you are offering advice on.
Funding through crowdfunding and donations
The world of podcasts is changing and becoming more legitimate with the introduction of crowdfunding and donations. This has given podcasts a new way to stay afloat and keep their content free for listeners.
Money can be made in two ways: donations or by selling merchandise to your target audience. Podcasts that have shown success in this venture include: The Truth podcast, White Lies, and McVeigh.
Merchandise and products
If you’re looking to sell products related to your podcast, then you need to create a store where people can buy those items.
You can either sell things yourself or find someone who does this already and pay them to sell your stuff.
For example, if you were doing a cooking show, sell cookbooks, kitchen equipment, and other food-related items.
Selling your own product is another way to generate revenue from your podcast. You can sell anything from books to t-shirts to coffee mugs.
It all depends on what kind of content your podcast offers. If you’re talking about politics, you probably won’t be able to sell political paraphernalia. But if you’re talking about a cooking show, you should definitely be able to sell cookware.
Hosting events and live recordings
Some popular podcasts monetize by hosting events such as live recordings or conferences to generate revenue. This increases the listenership of the podcast, and in turn increases advertising revenue. It also helps increase engagement and loyalty among your followers.
This is one of the most effective ways to monetize a podcast because it brings together a large audience at once.
Affiliate marketing as a way to make money
Podcasts are a great way to get information and advice from people who have been in the same situation as you. It can be hard sometimes to see what you’re doing wrong, and this is where podcasts come in handy.
Top afflilate programs include Amazon, Awin, and Clickbank.
Several podcasts provide affiliate links for products and services they mention on their show, so if you purchase them using these links, the podcaster earns a commission.
What is the downside of podcasts monetizing with affiliate marketing? The downside to podcasts monetizing with affiliate marketing is that listeners don’t know what they are sharing until they click on the affiliate link. This often leads to issues downstream of what was originally advertised.
Lastly, it requires the listener to type the affiliate label in.
In conclusion, podcasting is a rewarding and multi-layered process that could lead to a successful and sustainable business.
The best way to monetize a podcast is by building an engaged audience and then exploring the possibility of advertising, sponsorships, or affiliate marketing.