Podcasting for a Living and Financing Your Shows

I think the worst thing about podcasting is this – when you get popular, you have to pay more to produce a show. Very few other markets have this “inverse to success” relationship, and that makes it tricky. As with any business (and while podcasting is mostly a hobby to many people, it still has financial implications, ergo to me it’s a business) you can source money from a few sources.

1) Your own pocket
2) A third party
3) The listener

Now 1) is what most people will do till their ‘cast takes off and traffic starts to get a problem – this can be as low as 1000 subscribers. At that point 1) either requires a very understanding partner, or very deep pockets. It’s not the way forward.

2) means a few things. It could be a massive donation from the Scottish Arts Council (hmmmm), it could be a “network” of shows that support each other and that network covers any excess costs, or it could be people who want your product. And your product is people’s ears and their listening. In other words, commercials and advertising.

3) The listener. Now this is tricky. No business can survive on donations alone without a massive solicitation effort – with podcasting there’s so much choice you can’t alienate people by screaming poverty every show. They’ll move (The same goes for websites incidentally). So you either limit the show’s distribution to non-subscribers, or offer extra shows to the subscribers. Either way you’ve got issues with micropayments, subscriptions, credit cards, maintenance.

Note that all the solutions involve sacrificing something from the “pure” podcast. Pardon me for stating the obvious, but sometimes it always helps to state the problem out loud.

In my case, on TPN Rock, it is part of a group of podcasts (The Podcast Network) and the collective strength of listeners has allowed us to seek advertisers very quickly. We’ve recently announced a not-insubstantial deal with Motorola for three months, along with smaller sponsors on some of theindividual shows. I think it’s vitally important that listeners do not pay for their podcast shows, at least using money. I also feel people will realise why the ads are there, because all their life that’s what they’ve heard from audio content on the radio.

There are those who say that advertising will never work, so let’s change the rules, the world and totallly destroy mainstream media. That’s very nice, but you have to change a huge proportion of your listeners as well. And while that’s a very noble purpose, it’s also very quixotic in my opinion. Podcasting is audio content. The only new thing is the final delivery stage. In broadcast media it’s radio waves to a reciever, in podcasting it’s TCP/IP to a capture device, playing back on demand. The more “different” steps you put between the consumer and what they are comfortable with it, the harder it will be to make it a successful business.

People are comfortable with the principle of radio. 9 out of ten people I talk to understand the term “Radio on Demand.” They need a lecture to understand the term “Podcasting.” The elevator pitch would go like this. “TPN Rock is a show of the best unsigned rock music that you can listen to whenever you want.” That’s it, no technical terms, and the qualifier is, simply, “like a radio show, but you can press pause.”

The economics are there. Podcasts with work can easily reach 10,000 listeners, and it’s levels like that which will interest advertisers. You need to generate around £2000 a month income to live on a podcast, or a website, or a Yo-Yo shop, or whatever, but I digress. Which is 20p per listener. Say you have 4 shows (Yes many have more, but I’m looking to a mortal podcaster) then each show download needs to generate 5p. Plenty of Advertisers and PR will be more than interested in the metric at that cost.

We are the innovators. We are so far ahead of the loop that only now are companies thinking that maybe we might be a good delivery channel for their message. And when they fully accept that, those content makers who will accept that, who can work with the world as it exists today, who realise that they can live on around 10 hours work a week… They will be in a prime position to climb up Mazlow’e Heirarchy of Needs.

And I hope to shake their hand when they reach me.

Originally posted as two comments in The Tartan Podcast blog. And you really should read Cameron Reily’s post on the TPN vision as well.