My podcast addiction began three years ago with The Tim Ferris Show, a podcast in which bestselling author, entrepreneur and investor Timothy Ferris interviews high-performing people across a wide range of disciplines. Since then, I’ve listened to countless conversations between bestselling authors, billionaires, television personalities, athletes, presidential candidates, philanthropists and justices of the Victorian Supreme Court. Russell Brand to Jordan B. Peterson. Elon Musk to Melinda Gates. History, politics, marriage counselling and book reviews: Apple Podcasts has it all.
The idea of listening to podcasts might still seem like something your overcommitted friend studying law and commerce might do (guilty). But the reality is that a greater number of people are choosing Revisionist History over Coldplay. It seems that every day a new celebrity announces their foray into the ‘audio space’, armed with nothing but a quirky ‘personality’ and ‘a story to tell’. It is also true that an increasingly large number of companies are using podcasts to promote their message, inform their client base and recruit new people. Being a commercially orientated student with an interest in this audio space, I decided to determine just how commercially viable podcasting as a medium is.
What actually is a podcast?
For the few readers unaware, a ‘podcast’ is a type of digital content, produced episodically, usually in the form of an audio or video file. Common genres involve dramatic retellings of historical events, ‘round-table’ conversations on a particular topic and interviews with interesting high-achievers. Popular podcasts like The Joe Rogan Audio Experience and Dan Carlin’s Hardcore History usually release long-form content unsuitable to the traditional platforms of radio and TV – we’re talking three or more hours of content per episode.
There are a number of common reasons to start a podcast: to promote a book, a business or a cause, to produce interesting content that can be monetised, or a mixture of both – to produce content that promotes a certain message and can be monetised due to the insightful nature of its material.
How do podcasters make money?
True to form, Tim Ferris has produced an insightful article which breaks down this question nicely. Podcasters who are taking the ‘monetisation’ approach usually produce interesting content that users are willing to either: (1) support through the purchasing of sponsored goods, or (2) support through the use of donations. Hardcore History is a podcast that makes usage of the latter model, producing 12-hour-long epics and asking for $1 donations at the end of each episode. Clearly, it works, as they pay an entire team to research for and produce the podcast all year round. Tim Ferris uses the former approach, monetising his podcasts using a CPM (cost-per-thousand) approach. After approaching a sponsor, Tim will set a price – usually between $25-$100 CPM – and is paid depending on how well the podcast does. He’s quick to note that despite the possibility of his podcast generating $2 to $4 million USD per year using this approach, he likes to ‘cap’ the amount sponsors will pay in order to retain his audience. If that number seems incredible, Tim’s podcast barely breaches the Top 50 podcasts on Apple Podcasts. In 2015 The Joe Rogan Experience was seeing approximately 15 million downloads per month, and Rogan usually includes about three sponsors per episode.
How big is podcasting?
These figures prompt the question, how big is the podcasting industry? This is a multi-faceted question with a complicated answer. Like with YouTube, actually identifying an exact figure is difficult. Podcasters do not always publish their listener numbers, let alone their earnings, and the process of identifying either is usually a matter of speculation.
In addition, many podcasts are designed to promote external content and businesses, so the monetary value they generate is even harder to identify. A good example of this approach is the The GaryVee Audio Experience, with which the company Vayner Media promotes its vision and mission in the form of a podcast called the Ask GaryVee Show. The original production involves the company’s CEO sitting down with another influential business and sports personality as they answer a number of user-submitted questions. The program runs for about 30 to 60 minutes. This content is then dissected into 10 to 15 minute long pieces of content, distributed on Instagram, Facebook and LinkedIn. Particularly impressive anecdotes are further transformed into cartoon panels for distribution on these same platforms, or one-minute long ‘insights’ that viewers can easily share with their unsuspecting family members. Instagram and Snapchat stories are next, hosting their fair share of insights that divert viewers back to the long-form content where the message is clear: Vayner Media knows what it’s talking about when it comes to Topic X. All in all, the company is able to produce around 30 to 60 pieces of content a day – all from a single 60 minute podcast.
Clearly, podcasting is on the rise, and with larger numbers of celebrities, companies, and even government departments using this platform to connect with their respective audiences, it is bound to grow even more in the years to come.