Podcasts are clearly hot right now. As Jacob Donnely writes in A Media Operator:
I believe our industry is smart enough not to do a huge “pivot to audio,” it seems that everyone is launching their own news podcast.
It's not hard to see why. Audio is cleaner and leaner than video, and there's a lot of money flowing around lately.The problem is that there might not be enough money.As Jacob points out, ad revenue is not growing in line with the podcast explosion.
"If we hit $1 billion in total podcast revenue in 2021 and $261 million of that is dedicated to news podcasts, then how much would each podcast earn? If it were an even distribution, let’s say there are 50,000 news podcasts. The answer is approximately $5,000 per podcast"
Even if revenues grow a lot from there the math still doesn't work out.
"Even if we were to 10x the news podcast revenue and we’re sitting at $2.61 billion, the amount per podcast is only $50,000. That’s not even enough to hire one good journalist let alone the sound technician to go along with it"
And do we really think that revenue will realistically 10x?Obviously it isn't an average distribution. Some podcasts like The Daily make millions while many only get a few downloads.Will your podcast be one of the big ones?Slate is a brand that has succeeded wildly with podcasts, earning 50% of total revenues from podcast ads. They've also been doing them for 14 years (before they were cool), have 25 different shows and expect to top 200 million downloads this year.Slate's president Charlie Kammerer illustrated the point:
“There are 100-150 podcasts out that there that are big and then there are hundreds of thousands of podcasts that 8,000 people listen to.”
So as a small to medium sized publisher, you might struggle to generate a ton of ad revenue from your podcast, and it's unlikely that podcasts will counteract the wider industry's financial sustainability problems.But there are other reasons to start a podcast, and other ways they can generate revenue.
Do you have a loyal audience, and some ideas about rolling out a subscription or membership program?Adding a podcast to your subscription offer can be a great selling point and add to the value of your offer.If you have a podcast currently, Jacob advises against immediately putting up a paywall. Rather it is better to think about ways you can go beyond with special extra shows or episodes for subscribers.
If you have a super loyal audience, this could work too. Invite subscribers to your live podcast recordings or sell tickets to your audience members.This is a growing trend, and a lot of people seem to be into it as reported by Axios. Jacob thinks that podcasting is starting to look like a bubble, because there isn't enough audience to go around.Podcasting could still be right for you though if you pick the right niche and think strategically - good luck!Read the great article on this from a Media Operator.