People come to me all the time, wanting me to evaluate their idea for a podcast.
It’s clear that they’ve spent a whole lot of time — dozens of hours — refining their concept and writing up pitch materials.
Quite often, I’m not the first “expert” they’ve spoken to. And each “expert” has a different idea of what changes they need to make for their idea to be successful.
These changes are often not based on any sort of market research. There’s no data involved.
For forever in this industry, we’ve been relying on our taste to make decisions. One person comes in and says, “I really think you should focus more on X.” And so the pitch is rewritten to focus more on X.
The next person says, “I think you should consider changing your format to Y.” So the pitch is rewritten with a new format.
And again.
And again. When I get on these calls, people expect me to suggest changes to their topic and approach and format and tone. Because topic and approach and format and tone … those are the things I am actually an “expert” in.
But I don’t talk about any of these things.
Instead, I ask people how they plan to make money.
I ask them where their revenue is coming from. Not just the revenue to get the thing launched — lots of people seem to think if their idea is good enough, some podcast company will just give them a big pile of cash.
(Not true, by the way.)
I challenge them to think about WHY a podcast company would take a gamble on them, and HOW they think their podcast is going to recoup those initial costs.
And sadly, “selling ads” is not going to cut it. Ad revenue is not enough. At least not by itself. At least not any more.
I’ll say more about that in a bit.Not that long ago, a podcaster could come up with a “fun” idea or a “smart” idea or even an “important” idea, and they could probably find a way to fund it.
But those days are over. And no matter how many gains we make on the revenue side, I don’t think they’re coming back.
But you know what?
That’s okay…
Because there still are ways to fund good ideas.
You just have to think about what you’re doing … like a business.
I’m gonna keep using that b-word. So get used to it.If we are to think about our business like a business, that means we have to spend at least as much time thinking about the boring business stuff (like cost, revenue streams, listener demographics, market share and projected return on investment) as we do on the fun stuff (like topic, tone, storyline, voices and format.)
So, just to make things a bit simpler, I’m gonna run through some of the revenue streams out there right now, and how you might want to tailor your idea to take advantage of them.
Ad Sales I’ve already mentioned that ad revenue alone is not going to be enough to fund your podcast. But let me do the math for you.
We have to start with a concept called CPM. It literally means “Cost Per Mille” – Mille being the Roman numeral for 1,000.
So in podcasting terms, if your podcast episode gets 1000 downloads, you have 1 CPM to sell. If your podcast episode gets 5,000 downloads, that’s 5 CPMs.
Now, many of the podcasters I know are pretty happy with 5,000 downloads per episode. According to the
latest stats from Buzzsprout, that would put them in the top 1% of all podcasts.
So let’s pretend your podcast is in the top 1%...
Congratulations! I’m so proud of you.Now, what can you expect to get for ad sales?
Well, the going rate for ad sales varies, depending on a lot of factors.
Prerecorded ad are cheaper than host-read ads.
If the host is a celebrity, they might be able to bring in the big bucks. (Hence why you hear so many terrible celebrity chatcasts. Because for them, ad revenue IS enough.)
But let’s assume the host is not an A-list celebrity. Or even a D-list celebrity.
According to Acast, the CPM for each ad is somewhere between $15-40.
That means for each 1000 downloads, you can charge between $15-40 for each ad.
Most podcasts have room for about three host read ads per episode. And even that is really, really pushing it, because host-read ads generally run for 60-90 seconds or longer.
So if you get 5000 downloads per week – putting you in the top 1% of all podcasts – and IF you manage to sell three ad slots for top dollar, you MIGHT manage to bring in $600.
That’s per episode. Not per ad. And yeah, that’s just not enough. At that rate, your podcast might be able to pay for a very part-time engineer. Maybe. But it’s not going to pay YOU a living wage.
And I just want to be clear. This doesn’t mean that the podcast world should abandon ad sales as a revenue source.
Some money is better than no money.It just means that we have to work to ensure that ad revenue is not our ONLY revenue source.
Legacy Media Sooooo many people who come to me want to take their idea to legacy media. And often, because my background is in public radio, they seem to think I’m gonna be able to help them get funding – and maybe even actual air time – from public radio.
(Just a disclaimer: I can’t do that.
Really. No matter how good your idea might be.)
I don’t know if you’ve been paying attention to all the layoffs in journalism lately, but legacy media is in the same boat as the rest of us. Ad sales don’t pay as well as they used to. And belts are being tightened all over.
There are exceptions, of course. Every once in a while I’ll hear a rumor that a certain legacy news network is looking for a certain type of pitch to fill out their podcast slate. Or I’ll hear about a contest, like the one culminating at the
Resonate Podcast Festival this year.
But, for the most part, you’re not gonna find a pot of gold under the legacy media rainbow.
Podcast Production Houses In my experience, it is still possible to get interest through podcast production houses. Both the big players (iHeart, Wondery, Audible and – to a lesser extent at the moment – Stitcher) and the smaller houses like Campside and maybe even Pineapple Street?!? (They're "
pitch us" page is still active, but I have no idea if they're currently doing anything with it.)
And just a caveat here: My fundraising experience is limited to serialized narratives. I do not know as much about the business model behind always-on interview or news shows.
There's that b-word again. Business.In a lot of ways, serialized narratives are a gamble. But the gamble isn’t that they’re gonna get 3-million downloads and the corresponding ad sales to pay for production.
It’s really tough to sell ads for serialized narratives, because nobody really knows if they’re gonna hit it big. It generally takes a few episodes for the listens to really ramp up, and by the time the ads hit the feeds, the podcast is generally over.
So even if a serialized narrative gets enough downloads to pay for production through ad sales, it's unlikely that they've actually capitalized on those downloads.
(You can actually hear the effects of this, if you listen for them. Often, even the most brilliantly produced serialized narratives have ad slots that are mostly filled with swaps…not paid ads.)
So yeah, in my experience, ads aren’t going to pay for a serialized narrative. Not even a super successful one.
So these companies aren’t gambling on ad sales. They’re gambling on Hollywood.
If the derivative rights (for a documentary or – better yet – a scripted movie or series) are sold, money will be made. And if those rights actually result in a hit movie or TV series, lots more money will be made.
And so that’s why most of the serialized narratives you hear are Hollywood-ready. That’s why you hear so much true crime.
So. Much. True. Crime.
But that also means that if you have an idea that seems like it would make a great movie – and if you have access to the main players and a perspective on the story that’s fresh and personal – it’s probably worth developing into a pitch.
(Bruce, I know you’re reading this. I’m talking about you!)
Crowdfunding This is actually where I land with a lot of the folks who call me up, wanting me to evaluate their idea.
Crowdfunding is a great way to close that gap between ad revenue and costs.
I was once in a webinar with the host of an extremely popular podcast. It’s one of those shows that came out of the pandemic when everyone had lots of time to spend on side hustles.
But unlike most of those projects, this one actually makes $$$.The host told us that the show was largely funded through Patreon. Someone asked how much money the show brought in, and he declined to say. But as of this morning, according to Patreon, the show has roughly 20,000 paid members.
Even if you figure they’ve all subscribed at the lowest tier ($2/month) that’s at least $40,000 in Patreon revenue per month.
Let me say that again: $40,000 in Patreon revenue PER MONTH.
Do you know what I could do with $40k a month?!?Not only that, but ad buyers are looking for engaged audiences that are connected to a show and its host. What better way to show that your audience is engaged and connected than to have a thriving Patreon page and robust merch sales?
Not only that…but the best way to grow your audience is when your current audience writes a glowing review or tells a friend. And you know who’s likely to leave a glowing review or tell a friend?
Someone who is engaged and connected.
So, yeah, crowdfunding is sooooo, sooooo good.
I should probably write a whole newsletter about this, and maybe I will. But for now, I’ll just give you the TLDR. It’s something I learned in a
business certificate program for journalists.
Told you I'd be saying the b-word a lot.If you’re planning to ask your listener to directly fund your podcast, you need to think about everything you do in a different way.
You’re not building a podcast. You’re building a community.
That means you need to spend a lot of time thinking about – and researching – your intended audience.
Who are they? What do they want? What do they NEED?
And this work should not be theoretical, based on who you think they are and what you think they want.
You need to go out there and actually ask them.
