Podcasting is a relatively new opportunity for content creators. The development of social media platforms has made it easier than ever before for a small team, or even a single person working alone, to connect with an audience and build a following. The challenge for many new podcasters is how to make money from a podcast. Many of the most successful podcasts make enough money to support themselves, though there isn’t a single uniform revenue model.
People start podcasts for a lot of reasons. Some people just want an audience for their ideas. Some are entertainers looking to expand their audience through YouTube or Spotify. Others are coaches, teachers, or professionals who have expertise that they can share with the public or expand an existing blog.
Wherever you’re starting from, keeping up a full-time podcast requires time and resources. Making money from podcasts is not always easy, but there are several options open to you if you’re trying to get your own show off the ground.
In this blog, we’ll share tips from an expert podcaster making seven figures, and explore the models and tactics to help you build a profitable podcast.
Tips from a successful podcaster on making money
Before going into podcast monetization strategies, we’ll set the scene with some tips from Kate Erikson from Entrepreneurs on Fire, a successful podcast with over 2000 episodes, over 1 million listens per month, and seven-figure annual revenue.
Why is it a good idea to launch a podcast?
Podcasting is a unique medium. It allows you access to so many incredible benefits as an entrepreneur or small business owner that you would have to work twice as hard for — or 10 times as long to create elsewhere.
- An Intimate Connection. For starters, podcasting gives you the ability to speak directly to your perfect audience and provide them with free, valuable, and consistent content. This creates almost immediate “know, like, and trust” with your listeners. The intimate connection that is created through audio is incredibly powerful.
- Free AND On Demand! Second, podcasting is easy. Listeners don’t have to say no to what they’re doing right now in order to tune in to a podcast. They can listen while they’re shopping, working out, driving, doing housework … plus, it’s free and on-demand!
- Reach. Third, it provides your business a whole new marketing channel and growth opportunity that you own and have full control over. You can reach listeners worldwide, for free, and share your products, services, and offers with them to help grow your business.
- Impact. Lastly, podcasting allows you to share your message and mission with the world. The ripple effect and impact of that is priceless.
What’s it like in the early days of launching a podcast?
Starting and launching a podcast requires a lot of work. In the early stages, you have a lot of decisions to make.
- What topic will you focus on?
- Who is your avatar — your one perfect listener?
- Will you do a topic-based show, an interview show, or a combination?
- How long will your episodes be, and how frequently will you publish them?
- What equipment and software will you use?
Luckily, there are a lot of amazing resources out there that can help, like this Free Podcast Course. Remember, you can always pivot or change course down the road. The most important thing in the early stages is to keep on moving. Keep trying different things and testing to see what works, and what resonates most with your avatar.
Once you’re launched, it’s all about getting the word out and growing your audience. For the first couple of years, you should really only be focused on these two things:
- Successfully getting to launch
- Growing your listenership
Growing your listenership is about putting in the reps so you can become better at your craft. That might mean becoming a better speaker, interviewer, and/or teacher. It might mean having more and more one-on-one conversations with your existing listeners to find out how they heard about you so you can double down on your efforts to reach more people. It might mean trying something completely different than what you originally set out to create. Be flexible and only ever compare yourself to one person: you yesterday.
How does one approach podcast monetization, and build a revenue stream?
From the start, our full focus was providing value. Taking the advice of Albert Einstein — “Try not to become a man of success, but rather try to become a man of value” — I put my head down and I focused 100% on becoming the best daily interview podcast that existed.
Now, this was pretty simple since I was the ONLY daily interview podcast; however, I was determined to become better and better at providing more value through my interviews. This meant I had to become a better interviewer, become better at finding the best guests, become better at sharing my podcast, and become better at being a podcaster.
As I focused fully on putting in the reps, becoming better, and providing more value, I started having listeners reach out to me and ask if I offered coaching.
I had guests asking if they could buy advertising spots on my podcast to promote their upcoming book or course launch.
Never once have I created a way to monetize out of thin air. Every way that I’ve monetized my podcast has been a direct result of listening to what my listeners want and need. As a result, we’ve monetized through:
- Affiliate partnerships
- Online courses
- Journals and books
Once you have an idea for a product or service — because your listeners have come to you and asked for it over and over again — you have to prove the concept.
Ask your listeners to pay you money for the idea.
Then, once you’ve proven the concept, you can create the solution (product or service), build a system around it, create a funnel, and scale.
What mistakes should a new podcaster avoid?
Don’t skip steps. There is no shortcut to a successful podcast. Put in the work, put in the reps, and always be focused on providing more value to your listeners.
And NICHE. In the podcasting space, you have to find a way to stand out. Be unique. This is YOUR show.
Now, let’s dive into how podcasts make money, starting with two approaches to monetization.
Who is your customer and what is your product?
In order to understand how to monetize your podcast, it’s important to understand how content monetization works. Before you can make your podcast pay, think about who your audience is and your customer is – and what they want from you. Your approach will be determined by who your customer is, and the product you’re selling them.
By developing a clear picture of your show– the people who follow it, and the people who will pay you to keep it running, you can start thinking about the mix of monetization options that are right for you.
Tip: In podcast monetization, your audience and your customer aren’t necessarily the same person.
Here are some of the most popular choices podcasters make to keep their shows running and information about making each work for your podcast.
Selling content directly to your audience
Asking your audience to buy a product from you, or for direct donations can be awkward for many new podcasters, but it’s one of the funding paths that helps keep a program independent.
Consumer-based funding involves selling content or products directly to your customers. This can be done in several ways, which we’ll cover in more depth later in this blog:
- Selling digital and physical products, like online courses, memberships, and swag
- Direct donations through PayPal or Apple Pay
- Indirect donations through Patreon, Subscribestar, or other patronage platforms
- Checks or money orders to a P.O. box you maintain for this purpose
Podcasters can generally keep multiple direct funding routes open for the public to support them. You might, for instance, sell access to a membership site, in addition to early and VIP access to your content through Patreon.
Pros and cons
|Pros of monetizing the consumer||Cons of monetizing the consumer|
|Audience support usually comes with no strings attached, and it’s generally a more pure way to monetize your content than “selling out” to an advertiser||Asking for money from the public can be difficult for some people, especially when you’re just starting out|
|Your podcast can potentially make an above-average income from a relatively small but generous audience||Your podcast audience may not be financially capable of supporting you|
|Direct donations via PayPal and P.O. box do not require a commission to be paid to a platform||You might alienate some followers with too many appeals for donations and support|
|It’s relatively easy to expand your income as needed — for example, with a special funding request for new equipment or as part of a charity drive||Program time spent asking for support may be a distraction from your subject matter|
Sponsors and Affiliates
Selling access to your audience to brands
Sponsorship is another common route for hosts looking into how to make money from podcasts. Sponsors are companies willing to pay for a brand message to be added to your content.
This can be done directly, usually with a contract between the sponsor and the show, or indirectly through an agency. Some agencies act as the middleman to connect podcasters with compatible clients, while other entities act as ad agencies.
For podcasts distributed through YouTube, Google is one of the most popular choices for sponsorship. When your podcast qualifies for monetization in this way, you can earn a share of the ad revenue Google charges to run commercials before, during, and after your show.
You can also include affiliate links for a commission or flat fee per acquisition. For example, Amazon pays anywhere between 4% to 10% of the sale price for anyone who purchases through your unique link.
Pros and Cons
|Pros of Sponsorship||Cons of Sponsorship|
|Revenue streams from sponsorship tend to be more reliable than direct donations from the audience||Advertiser revenue can be pulled for incompatible or controversial content, also known as demonetization|
|Large podcasts can command very high rates for advertising messages||Because the margins are so thin, you need a relatively large audience to make any money. And small channels may not be eligible for ad revenue until they’ve reached a certain size|
|Tax paperwork and other record-keeping can be simplified with documents from agency partners||Sponsors paying for a message to be inserted into content often have requirements for what you must say and how to say it to be paid|
|Commercial messages played before and after a podcast tend not to interfere with content||Sponsored content generally has to carry a disclaimer to the audience, and outside funding might hurt your credibility with people following your show|
Top 10 ways to make money from your podcast
You aren’t restricted to just one model for how to make money from a podcast. Many podcasters mix and match funding models to create a system that works for them. Early on in the life of your podcast, you might have to experiment with several different funding options until you have a model that works well for your show. Even later, it might be worth revisiting your podcast’s funding structure in case the growth of the show has opened new doors for you to monetize your content. These are some of the most popular paths podcasters have to choose from.
From your content consumers
Because you may not be starting out with a large following, having your audience pay you directly for your content may be a great place to start for a few reasons:
- You need a large audience to attract sponsors and affiliates
- You can make more money with a smaller audience
Here are some popular methods to monetize your following directly:
- Memberships: Many social media platforms, including YouTube, allow certain creators to create membership programs. Details vary between sites, but usually, this is a subscription your followers can sign up for to directly fund your podcast.
- Online Courses: If your podcast has educational content, your subscribers may be interested in signing up for an online course. You can draft a plan and upload your online course, then offer snippet lessons or samples of your work through the free podcast.
- Books and E-books: Authors have discovered a new life as podcasters. A popular podcast can reach thousands or millions of potential book buyers, for everything from creative fiction to how-to guides.
- Digital Products: Digital products are virtually any downloadable items you can sell through your podcast. Taken together, these items are nearly a $200 billion industry, with no sign of slowing in the market.
- Patreon, etc.: Patreon and other platforms allow your show’s supporters to pay you directly for content you upload. Membership options usually include one-time donations, recurring monthly subscriptions, and payments on a per-episode basis. Many of these sites also allow you to set multiple support levels and offer rewards for donors, such as an in-show shout-out or one-on-one contact with you.
- Swag: Swag is the common term for any physical merchandise you offer through the show. Almost anyone can sign up for an account at Teespring or Zazzle and create or upload their designs onto all sorts of items. Popular swag items include T-shirts, coffee cups, bumper stickers, and other common items.
If you have a larger following, you may be able to attract brands that will pay for access to your audience.
Here are a few ways to monetize your podcast through sponsorship:
- Affiliate Programs: Affiliate programs can dramatically expand your options for making money from a podcast. In a typical affiliate program, one social media property pays another to promote it. Your podcast can be on either end of this transaction, but if you’re the affiliate being paid, you can make money directly from promoting other creators.
- Sponsored Content: Sponsored content is not a new concept. Early TV shows would often take a break while the host told the audience about Geritol or whichever other product was sponsoring the show. If your podcast attracts a sponsor, you might be asked to take some of your show’s runtime to tell the audience about the product or service that’s supporting your show. In return, your podcast could make several hundred or even thousands of dollars an episode.
- Product Placement: Product placement is similar to sponsored content, but it more often involves showing the product on-screen or simply talking about how you use a service. For example, a podcast on personal finance may include a demo of how to use a personal investment app, like WealthSimple. This can be a controversial method for making money through a podcast, and depending on how you do it, it might even be illegal in countries such as the UK, where strict laws govern native advertisements.
- Guest Appearances: From time to time, paid guests might want to appear in your podcast. Some guests are willing to pay for an appearance when they have a product to sell or a service to offer. Paying you for access to your audience can be an effective way for these guests to advertise or raise their public profile, and it can also be an effective way to raise yours. You can also trade guest appearances with other podcasts, to raise each other’s profiles.
Podcast monetization do’s and don’ts
If you’re looking to monetize your podcast, there are a few things you should keep in mind as you develop a revenue model. Some things you should always (or nearly always) do, and others should be avoided.
|Research, define, and understand the audience you’re trying to reach||Expect to succeed overnight; building a funding network takes months or years|
|Start thinking about monetization options as early as possible — even before you’re fully ready to monetize||Mix your funding streams or try to get too much out of them. Do not, for example, belabor your premium subscribers with advertising messages they paid to avoid|
|Develop the right tools for social media promotion, as well as a backup plan in case one revenue stream lets you down||Cut corners with your audio and visual equipment|
|Create a promotional plan and launch it across platforms to get as much attention as possible||Come on too strong. Many of your promising followers can be driven away by a heavy-handed appeal for support|
|Feature other creators, and ask for shout-outs in exchange||Overwhelm your audience with ads, sponsor messages, appeals for support, and other sales pitches|
Podcast monetization FAQs
How do most podcasts earn money?
Podcasts typically earn money from two main models: listener support and third-party advertisement. If your podcast makes money from its audience, you might rely on subscriptions, patronage, or sales of real or downloadable content to get by. Third-party support is usually via advertisements or paid endorsements of some kind.
How much money do podcasters make?
There is no limit to the amount of money a podcast can make for you. Joe Rogan, host of the Joe Rogan experience, reportedly earned $100 million for an exclusive podcast contract with Spotify in 2020; and Entrepreneurs on Fire makes over seven-figure annual revenue. While the going is often slow in the beginning and you might have to get by on pocket change for months or years, a good monetization strategy could see your podcast making hundreds or thousands of dollars an episode.
When should I start thinking about monetizing my podcast?
Start thinking about how to make money from a podcast as early in the process as possible. Ideally, your revenue model can be part of the planning even before you record your first episode. The earlier you begin investigating potential funding for your podcast, the more time you have to do research and develop a good working model.
How big does my following need to be to monetize?
There is no set minimum size for a paying podcast. In theory, you could start getting direct donations from your first subscriber during your first episode. More realistically, most podcasts start getting serious about monetization around the low-thousand mark for regular listeners. As a rule, you can monetize with smaller audiences if you’re counting on direct support, like selling courses and memberships, while sponsors tend to pay for the larger audiences.
The final word on how to make money from a podcast
Podcasting is a very exciting and promising way to reach an audience of people interested in what you have to say. It’s not the only route, however, and you shouldn’t limit yourself to just one path to the public. Incorporating your podcast into a multi-channel and multi-platform network consisting of online courses, memberships, digital products, and multiple affiliates can all help you not just grow your show but also make money from a podcast you put a lot of work into.