Can money be made from podcasts?

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Can money be made from podcasts?

Hello! Thanks for your question about making money from podcasts. The short answer is yes! Even when not started by established companies, podcasts can become profitable. Below, I've included some podcasting statistics and a deep dive about monetizing your podcast with examples of successfully monetized podcasts. Anecdotally, I can also confirm monetization is possible, as I have been personally involved with several podcasting projects that became financially successful.

HOW PODCASTERS MAKE MONEY

There is no one right or wrong way to monetize a podcast, your specific path will depend on your topic and resources available as a new podcaster.

According to the most recent information available, podcasters earned an average salary of $26,000 in 2013. However, take this statistic with a grain of salt, since the numbers are skewed by a large number of podcasters who don't make anything, and a few podcasters who make millions of dollars.

Many podcasters monetize through sponsorships/ads. According to an article on Entreprenuer, you can expect to earn $18 per 1,000 downloads for a 15–second pre–roll and $25 per 1,000 downloads for a 60–second mid–roll slot. Forbes suggests that sponsorship rates are between $20 and $45 per 1,000 downloads. Another article, by Current, gives a wider range, noting that advertisers will pay $10–$60 per 1,000 downloads. Of course, something to consider is that, although you earn more with a mid-roll slot, many listeners find mid-roll slots to be jarring and to take away from the podcast experience. Overall, sponsors will spend an estimated $207 million on podcast ads in 2017, according to one report. Direct-response advertisers are dominating this space, while more traditional large brands are still experimenting, according to Current.

Another monetization option is to crowdfund, which is when you ask listeners to donate via a platform such as Patreon. This is only effective if you build an extremely devoted following, but it is possible For example, podcaster Noah Lugeons makes $1200 per episode with crowdfunding. Kickstarter is another crowdfunding option.

Some podcasters opt instead to put up a paywall. Instead of asking listeners to fund the podcast, they require them to pay to listen. However, this does limit the revenue you can make with sponsorships/ads, so diversification is harder. Some podcasters are starting to offer a hybrid option, according to Current - i.e. you don't have to pay to listen, but if you do, you get certain perks, such as being able to listen a day early or getting bonus programming. Patreon and other crowdfunding platforms allow you to set up these rewards.

You can also use your podcast to promote digital or physical products that you're selling (like books), to sell services such as coaching, and to sell affiliate products. Many podcasters monetize in several ways to keep their income diversified and to bring in more revenue. At the low-end CPM range, you would need 500,000 downloads per month to make a livable income from ad sales alone, according to Hustle.

HOW LONG BEFORE YOU'RE PROFITABLE

While you can (and should, in my opinion) start monetizing from your very first episode, it may take time for you to see a real, measurable income. This is true even if you already have a following. For example, comedian Adam Carolla ran a deficit for about 18 months when he built his own studio and founded Carolla Digital, though it should also be noted that he invested $175,000 into building this studio. You can start much smaller to see a profit sooner. In 2015, Carolla estimated $5 million in revenue from his podcast.

SUCCESSFUL PODCAST EXAMPLE: EOFIRE

Entrepreneur on Fire (also known as EOFire) by John Lee Dumas is one example of a podcast that grown from nothing to become very financially successful. Since launching in 2013, EOFire has brought in $7.2 million ($5.45 million in net profits). This is a daily podcast where Dumas interviews entrepreneurs about their successes and failures.

Dumas generates revenue in five main ways:

1. Product Creation - Dumas uses his podcast to promote products such as his membership site, Podcasters Paradise, which teaches people to run successful podcasts. It currently has 2,800 members at either the $750 or $1950 rate, plus recurring income.

2. Sponsorships - Dumas makes between $80,000 and $120,000 per month with pre-roll and mid-roll ads.

3. Affiliate Sales - Dumas earns up to $100,00 per month promoting affiliate products, though he doesn't use this strategy every month.

4. Membership to his Mastermind Group

5. Speaking/Consulting

Dumas actually puts his monthly income reports online, so you can see his most recent income and a breakdown of how he earned it. This includes income from outside his podcast as well.

OTHER EXAMPLES

Dumas isn't the only independent podcaster who has created a financially successful business through his podcast, although he is one of the biggest success stories. Here are a few others:

- Dave Jackson: Although he hasn't posted a public income report in a few years, he runs several successful podcasts as part of The School of Podcasting. His most recent report shows a monthly income of $4846, about half of which was earned through consulting work and the rest from affiliate sales, memberships, and book sales.

- Leo Laport: Tech guru Leo Laport runs This Week In Tech, which made around $50,000 per episode in 2014, presumably from ad sponsorships. This does not include Leo's income from other sources, such as speaking, which stem from his podcast work as well.

- Shane Dawson: The Shane And Friends podcast has been monetized primarily through sponsorships/ads. At the point where they had 250,000 downloads, their rates were $4,500 for the pre-roll and post-roll and $6,250 for the mid-roll.

- Marc Maron: At the point where he had about 250,000 downloads, Marc Maron was charging $14,640 per episode in combined pre-roll, post-roll, and mid-roll ads.

Thanks for your question about making money from podcasting! I hope this helps you get started on a successful podcasting journey. To summarize, yes, it is definitely possible to make money podcasting, as long as you diversify your income, produce a high-quality show that attracts listeners, and have a little patience. Thanks for using Wonder! Please let us know if we can help with anything else!

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