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Podcast Survivor + dollar sign

Are podcasts actually less profitable than other online media?

Podcast Survivor + dollar signThe business and sustainability of podcasting seems to be gaining momentum in the zeitgeist. The latest entry is an article in last Friday’s Wall Street Journal that laments in its headline, “So Many Podcasts, So Little Profit.” Writer Jo Piazza says “podcasts today are what underground zines were in the ’90s,” which is a sentiment that I agree with, at least in part. Then she profiles three New York-based podcasts that have achieved some popularity, though don’t yet make a lot of money.

Actual numbers are only revealed for one podcast, The Bowery Boys: New York City History. Producer Gregory Young says each new episode sees 17,500 to 20,000 downloads within four weeks, on top of 100,000 downloads a month of past episodes. It doesn’t seem like he’s yet making any money, though he and his co-producer “have calculated that they could earn up to $4,000 in advertising from the podcast.” It isn’t made clear if that’s an annual rate, nor how that calculation breaks down.

What gets left out of these conversations is the fact that a whole lot of online media outlets–even very large, professionalized ones–don’t necessarily make much profit either. A decade ago there was plenty of discussion about whether or not online-only publications or blogs would ever be taken seriously or make money. But now large companies like CBS and AOL have been willing to invest in and support the likes of C-Net and Weblogs, Inc., respectively, while other new online media ventures, like Vox Media, which runs the technology news site The Verge, are backed by venture capital.

The difference for podcasts is that the big companies and venture capitalists don’t yet seem to be interested in backing or buying any independent podcasts or podcast networks, even if many established media companies produce their own podcasts.

That doesn’t mean that all independent podcasts are unsustainable, nor unprofitable. On the Wolf Den podcast Jeff Ulrich, the co-founder of the Earwolf podcast network, discusses the business of podcasting. In a September episode Ullrich discusses “What’s Up with Earwolf,” revealing that the company now has produced 2700 episodes, pays 70 people involved with production and spends $41,000 a month in operations costs. While we don’t know the ins and outs of Earwolf’s balance sheet, there is no indication that the company’s expenses are not currently sustainable.

There are other apparently prosperous podcast networks like Nerdist, TWiT, Maximum Fun and 5by5, which each produce at least a dozen shows a week. In fact, having a slate of regularly produced programs seems to be a factor in building a sustainable podcast enterprise.

Like it is for traditional and online media, advertising is becoming an important source of income for podcasts. Having a podcast network with many shows is more attractive to advertisers, both in terms of reaching a broader listening audience, and because it means dealing with one company rather than a bunch of over-worked independent producers.

Still, as anyone who has worked in ad sales can attest, bringing in advertisers for any media outlet is a full-time job in itself, and therefore quite challenging for independent podcasters. To help address this Ullrich has launched The Midroll which is a platform and aggregator that connects advertisers with podcasters. As he explains on that aforementioned Wolf Den episode, Ullrich realized that there are efficiencies in bringing together podcasts for bigger buys from advertisers, in the same way that radio networks aggregate ad sales across stations. At the same time The Midroll helps podcasters by providing support for them and customer service for the advertisers.

To me this seems like an important step forward in the maturation of podcasting as a medium. As I recently observed, the emergence of web ad networks and aggregators like Google’s Ad Words made it easier for independent blogs and websites to generate income, helping cultivate a more sustainable ecosystem. A service like The Midroll should be able to help a podcast with a decently large audience start on the road to financial viability.

But don’t get me wrong. I’m well aware of how online and offline ad-supported media have become difficult businesses, at least partially as a result of the proliferation of ad supported outlets online. It is not at all clear that advertising alone will be sufficient to grow and sustain podcasting as a medium. However, it is likely that sponsorships will play a significant role, whether they are in the form of traditional advertisements, more like public radio underwriting, or some other new model.

Not all podcasts need to be profitable either. There are hundreds of reasons to pick up a microphone and distribute a ’cast, and the very accessibility of podcasting should liberate would-be producers from having to generate a profit, or any income at all if that’s what they want. It’s perfectly fine for a podcast to be just like ’zine, as Piazza suggests in her WSJ article. There’s nothing wrong or inherently inferior about a hobby podcast or one produced for reasons other than revenue.

I want a world where podcasters of many stripes have the opportunity to find support for their shows at a variety of levels, using many different methods. I’ve yet to even scratch the surface of the many different ways a podcaster might both make a show and also put some food on the table.

Be sure to come back on Wednesday for more discussion on this topic with my new weekly Podcast Survivor feature. This week I will have an interview with a podcast producer who is running an indiegogo fundraiser to launch her program into a regular production schedule.

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