How Do Podcasts Make Money?

Podcasts have become a favorite for many, and it’s not surprising since these audio files put in a series of episodes could take the listener to various places using interviews or even providing investigative storytelling.

For Podcast How To, however, podcasts are not just a means of entertainment but are also a source of income as reimbursements for the team’s efforts.

Now, there are tons of ways how podcasts could generate money. And for those aspiring to get on the same career, you would have to watch out to the following opportunities:

Subscription

Podcasts stay afloat because their audience is interested in their content. As a result, they would gain many subscribers and fans who share the same excitement for each newly released episode.

As the podcast builds its fanbase, it could then decide to transition from being accessible to being ad-supported behind a paywall, like Spotify, Brew, Luminary, and Stitcher.

The subscribers then would have to pay for a monthly or annual subscription depending on their preference to get their hands on the latest podcast.

Advertisements

Businesses would do everything to get their name on the streets, and podcasts are only one of their ways to achieve this goal.

Through the combined popularity of podcasts and their advertisements, businesses could have the opportunity to make their sales.

It’s unknown when this method was first used, but in 2018, brands were seen spending up to 479 million dollars to get in the podcast space, which was 53% higher than the calculated advertising expenses back from 2017.

Experts have concluded that there’s a possibility that we’ll see an increase of up to $1 billion in the advertisement efforts of various brands to the engaged audiences of podcasts.

According to Podcast Rocket, there are three methods on how podcasts perform advertisements, and this is through direct brand advertising, using an agency, or through a programmatic approach.

If it’s a direct advertisement, the podcasts could identify if they’ll advertise the brand in the pre-roll, midroll, or post-roll of the episode, and the pay would depend on the agreement of both parties.

Usually, this method uses the cost-per downloads (CPM) model. A podcast would be paid with the agreed amount whenever they reached 1,000 downloads from their tactics, like host-read, endorsements of products, and direct response.

On the other hand, advertising podcast agencies are also infamous for operating as mediators for the marketplace or the brand itself. For example, you might have heard the names of Havas Edge, Ad Results, and Veritone One who represents big clients, such as Embark or LinkedIn.

The agencies would be responsible for vetting associated talents and planning the clients’ campaigns, like purchasing ads quarterly and listing their shows or brand inventories that podcasters could browse through.

Meanwhile, the programmatic method utilizes the non-host-read ads approach within the podcast segments. The brands have the liberty to choose from the available programmatic space based on the podcasters’ demographics instead of picking from the selection of genres and shows.

Premium contents

When it comes to premium content, Patreon could pop into your mind, and you’re not actually wrong with that.

Aside from the ads-supported podcast episodes, premium content is tailored explicitly for avid podcasters that come with the recurring monthly fee.

It’s a healthy base pay that doesn’t leave podcasters from solely relying on ad revenues in exchange for unique, high-quality audios for their audience.

Premium contents are still sought after because of the unique benefits of listeners’ paid memberships, such as merchandise, never-heard or released podcast episode, and many more.

Of course, podcasters aren’t planning on gatekeeping their fans who couldn’t afford the top-tier episodes, and they still guarantee that there’s enough free content.

It’s just their discretion if the premium content entices them to pay a membership.