How Do Podcasts Make Money?

Dear future/ up and coming podcasters, with podcasts going mainstream and people recognizing how profitable starting a podcast could be, many people want to know how that exactly works before they start producing a podcast. 

So, how exactly do podcasts make money? There are many ways that podcasters can make money off of their podcasts. The five that I am going to discuss today are the following:

  1. Getting their podcast sponsored
  2. Using Affiliate links
  3. Starting a Patreon page
  4. Selling your own services or products
  5. Selling merch

If you are interested to learn about how you can make money from podcasts, then continue reading this blog post. Beware, though, this is not a get rich quick scheme. You will have to put in a lot of work and be patient during your podcasting journey. Without any further ado, let us get started.

How do podcasts make money

Podcasters can monetize and earn money from their podcasts in many different ways. Today, I will only be focusing on five of them. The five ways podcasts can generate money from are the following:

  1. Getting their podcast sponsored
  2. Using Affiliate links
  3. Starting a Patreon page
  4. Selling your own services or products
  5. Selling merch
How Do Podcasts Make Money

If you are familiar with how YouTubers make money, then you have probably seen how YouTubers make money using these methods. When it comes to podcasting, things are not so different, and these methods are still popular and applicable.

However, I want to stress one last time how this is not a get rich quick scheme. I feel like I need to mention this again because many people ( more than one hundred thousand people) google search how to create a podcast and how to make money from it.

And with reports showing how the biggest podcasters are making more than one million dollars per year from their podcasts, I see why the craze exists.

However, one must be aware that though making money from podcasts is possible, it takes a lot of work, dedication, patience, and, unfortunately, luck. The percentage of people who earn a lot of money for podcasts is small.

Some people can earn a decent monthly income, while others won’t make much money. Which is why you should have at least one more reason to start a podcast, the first being earning money.

If you are passionate about the topics that you are going to discuss and you enjoy at least one ore two aspects of podcast creation, then worst-case scenario, you will be earning some extra cash doing something that you enjoy.

Now that this out of the way, let us talk about the five different ways that you can monetize your podcast! First up on this list is making money by getting sponsored!

How do podcasts make money: Getting sponsored

There are not only many sponsorship models but also different methods of doing them. No, models and methods are not the same. Let us start by talking about two of the methods that are used in sponsorships.

How Do Podcasts Make Money: Sponsorships
Click here to read my How Do Podcasts Make Money: Sponsorships blog post!

When I say sponsorship models, I am talking about how the podcaster is going to get paid for the sponsorship that they are taking. When I say sponsorship methods, I am talking about how the sponsorship is going to be delivered.

Let us start by talking about two of the methods that are used in sponsorships. These two methods are:

  1. The host reads ads method
  2. The radio-stylee ads method

Method no. one: The host read Ads

This method of sponsorships is considered to be very effective because the podcasters themselves are talking about the service or product that they are sponsoring.

Unlike the radio-stylee ads method, which I will be discussing very soon, the company that is offering the sponsorship is not the one speaking about the product or service.

But why is not the sponsorship recorded by the company sponsoring the podcast? After all, do not those people know much more about the products and services that they are offering than the podcaster?

Well, if you observe the world around you, you will realize how popular and effective it is to have influencers talk about specific products or services instead of a random person doing so. This is due to a phenomenon called the psychology of influence.

When people look up to and trust an influencer, they are more likely to purchase whatever they are recommending.

This means that when a podcaster promotes something to their passionate audience, their listeners are more likely to purchase that product than if it was delivered to them by a stranger.

This is an organic advertising method because there are no sudden interruptions of strangers marketing their products during the episode.

Method no. two: The radio-style Ads

This is exactly what it appears to be. Basically, the company itself records the ad and send it to the podcaster to insert it into their episode.

Although this might mean less work on the podcaster’s end, it results in an advertisement that is not very effective.

People listen to a specific podcast because they are interested in what the podcaster has to say, not to be bombarded with annoying sale pitches that are jarring from a stranger.

What are the pricing models when it comes to podcast sponsors?

How do podcasts make money

The three primary pricing models for podcast sponsorships are:

  1. Cost per acquisition (CPA)
  2. Cost per Mille (CPM)
  3. Negotiating a price with the sponsor

Pricing model number one: Cost per Acquisition (CPA)

The cost per acquisition (CPA) model works by paying the podcaster a specific amount of money or a particular percentage for every acquired customer. This usually the model used in affiliate sponsorships.

Pricing model number two: Cost per Mille (CPM)

The cost per mille (CPM) model works by paying the podcaster a specific amount of money for every one thousand impressions. Impressions could be either episode streams or downloads.

Pricing model number three: Negotiating a price with the sponsor

Negotiating a price with a sponsor is a great model for new podcasts that are in a specific niche and have a highly engaged audience.

Why?

If podcasts do not get many streams or download per month, they are probably not going to make much via either of the cost per acquisition (CPA) or the cost per mille (CPM) models.

This means that if they negotiate a flat flee for a sponsorship on their small yet niche podcast that has a passionate audience, they are going to get a better deal.

How much can you expect to earn from your podcast with sponsorships?

An ad can be played at the beginning, at the end of the episode, or somewhere in the middle of an episode

Thus, the three ad slots for podcast sponsorships are:

  1. Pre-Roll:
  2. Post-Roll
  3. Mid-Roll 

The Pre-roll ad slot

  • It is an ad slot that is played at the beginning of an episode.
  • It is the most popular ad slot.

The Post-roll ad slot

  • It is an ad slot that is played at the end.
  • It has a duration of fifteen to thirty seconds ( 15- 30 sec) long.
  • It is the last call to action.
  • This is the least preferred ad slot.
  • It is the cheapest ad slot.

The Mid-roll ad slot

  • This is an ad slot that takes place during the episode.
  • The most flexible ad slot because it allows the podcaster to incorporate it organically.
  • It is considered to be the most effective ad slot.
  • It is the most desired ad slot
  • It is the most expensive ad slot.

What is the industry standard for podcast sponsorships?

How Do Podcasts Make Money: Sponsorships - Industry standards

Currently, the Industry Standard for podcast sponsorship is a package that includes the pre-roll ad slot and a mid-roll ad slot.

The pre-roll ad slot is fifteen seconds ( 15 sec) long, while the mid-roll ad slot is sixty seconds ( 60 sec) long. 

The payment rates for the Industry Standard for Podcast Sponsorships are the following:

  • Usually, a fifteen-second ( 15 sec) pre-roll has a (CPM) cost per thousand listens of eighteen dollars (18 dollars).
  • Usually, a thirty-second ( 30 sec) post-roll has a (CPM) cost per thousand listens of ten dollars (10 dollars).
  • Usually, a sixty-second mid-roll has a (CPM) cost per thousand listens of twenty-five dollars (25 dollars).

Let us assume that your podcast gets about three thousand ( 3K) listens per episode within its first four weeks of its publication.

This means that you will be making about one hundred and twenty-nine dollars ( 129 dollars) per episode according to the Industry Standard for podcast sponsorship combo.

Here is the breakdown of that:

18 x 3 (because you are getting three thousand “3K” listens): So, you will get fifty-four dollars “$54” for the pre-roll ad slot.

25 x 3 (because you are getting three thousand “3K” listens): So, you will get seventy-five dollars “$75” for the mid-roll ad slot.

If you can get two sponsors for your podcast, then you will easily be able to double your revenue per episode. So if you do that, you will be earning about two hundred and fifty-eight dollars “258 dollars” per episode.

I know that this does not look like a lot of money, but you will earn more as your audience grows.

But, you can also earn more by doubling or even quadrupling your revenue depending on how many episodes you can create and upload every month. Let us continue our calculations, assuming that you have two sponsors per episode.

  • If you can make two episodes per month, then you can earn about five hundred and sixteen dollars (516 dollars)
  • If you can make four episodes per month, then you can earn a total of one thousand and thirty-two dollars. (1032 dollars)

Please note that these CPM numbers are the Industry Standard for podcast sponsorships, which means that some podcaster will end up having a higher or lower cost per mille (CPMS).

Did you know that some big podcasters have a CPM of one hundred dollars ($100)?

How do podcasts make money: Using Affiliate Links

Affiliate links are considered to be under the sponsorship umbrella, which makes sense because it is deemed to be illegal to avoid mentioning that you could get a commission if someone uses the product links you leave on your site or episode description and purchases something.

However, using affiliate links is not the same thing as being sponsored. You do not typically have to contact someone to get the green light to start earning money.

Some companies limit who they allow to be associates and get affiliate links, but generally speaking, all you need to become an affiliate associate is to a companies website and sign up.

The most popular site that allows podcasters to monetize their podcasts is Amazon through their Amazon Associates program. However, make sure that at least hundreds of listeners are listening to your podcast on a monthly bases.

I recommend having a minimum of five hundred listeners per episode before you consider signing up for the program.

Why?

Because if you do not make at least three sales within your first one hundred and eighty days ( 180 days) of joining the program, you will be kicked out of it.

I highly recommend that you watch this video from Income School before you become and Amazon Affiliate.

Of course, there are other sites that offer affiliate programs for content creators, but Amazon Associates is the most popular one.

If you want me to make a blog post on the best affiliate programs for podcasts, then email me at podcastingdiaries@gmail.com.

How do podcasts make money: Starting a Patreon page

YouTubers, ASMRists, artists, writers, and podcasters turn to Patreon and their audiences to support them so they can continue creating their content.

With many creators being unable to earn enough money by hosting their content on a particular platform, they have turned to Patreon. This is a membership-based site that allows people to support their favorite creators by paying for exclusive content that is mostly on a monthly bases.

Many podcasters have their podcast on Patreon. Some of them offer it on that platform without ads, so people pay for a luxurious experience. Other podcasters have exclusive episodes and segments that are only available on Patreon. 

Patreon supporters can even vote on and recommend what topics they would like the podcaster to make episodes on.

How do podcaster make money- Patreon

In a nutshell, Patreon is:

  • A membership-based platform that allows an audience to fund or donate money to support content creators on per final product bases or monthly bases. 
  • Podcasters upload their episodes without sponsorships or ads for people who want to enjoy the podcast without interruptions.
  • Podcasters also often offer other bonus perks and incentives.

To show how great this platform is for podcasters, I am going to talk about five of the top-earning podcasts on Patreon.

1) The Chapo Trap House podcast

The Chapo Trap House podcast has over thirty thousand (30K+) patreons backing it up. The podcasters make about one hundred and thirty thousand dollars ($130K+) per month just from Patreon.

  • Podcast Name: The Chapo Trap House podcast
  • Number of patreons: Over thirty thousand (30K+)
  • Monthly earnings: One hundred and thirty thousand dollars ($130K+)

2) The True Crime Obsessed podcast

The True Crime Obsessed podcast has over fourteen thousand (14K+) patreons backing it up. The podcasters earn more than seventy thousand dollars ($70K+) every month.

  • Podcast Name: The True Crime Obsessed
  • Number of patreons: Over fourteen thousand (14K+) patreons
  • Monthly earnings: More than seventy thousand dollars ($70K+)

3) The Last Podcast on the Left

The Last Podcast on the Left podcast has over eleven thousand (11K+) patreons backing it. The podcasters earn around fifty-six thousand dollars ($56K) per month.

  • Podcast Name: The Last Podcast on the Left
  • Number of patreons: Over eleven thousand (11K+) patreons
  • Monthly earnings: Around fifty-six thousand dollars ($56K) per month.

4) The Second Captains World Service podcast

The Second Captains World Service podcast has over eleven thousand (11K+) patreons backing it up. The podcasters earn around fifty-five thousand dollars ($55K) per month.

  • Podcast Name: The Second Captains World Service
  • Number of patreons: Over eleven thousand (11K+) patreons
  • Monthly earnings: Around fifty-five thousand dollars ($55K) 

5) The Tiny Meat Gang podcast

The Tiny Meat Gang podcast has over ten thousand and five hundred (10.5K+) patreons backing it up. The podcasters earn around fifty-two thousand dollars ($52K) per month.

  • Podcast Name: The Tiny Meat Gang
  • Number of patreons: Over ten thousand and five hundred (10.5K+)
  • Monthly earnings: Around fifty-two thousand dollars ($52K) per month

Please note that these earning are gross revenues. Patreon is going to take a percentage of that first, so these numbers are not the podcasters’ net revenue.

How do podcasts make money: Selling your own service or products

Being sponsored, using affiliate links, and offering membership fees for people to access your podcast are not the only ways for you to monetize your podcast. Selling your own services and products is also another great way to monetize your podcast.

Of course, you should have experience or knowledge in a particular subject before you create and offer something like that to your audience. But what kind of products can you provide to your listeners?

You can write a short book, offer one on one calls, sells courses, etc. There is a lot that you can provide if you have excellent knowledge about something that your listeners could be interested in.

If you are a podcast that talks about budgeting, then you can write and sell a budgeting 101 book.

You can offer one on one calls where you help whoever is calling you budget their money and explain to them how they can get out of debt, and help them choose the perfect saving account for them.

You can also create a course that helps people become debt-free. Honestly, if you have the knowledge, you will be able to offer your audience great value and monetize your podcast at the same time.

However, if you can not offer them a valuable service, then skip this method of podcast monetization until you accumulate enough experience and knowledge on a particular subject.

You do not want to make your listeners feel like you are scamming them and just using them to make money. If you currently can not offer your listeners any services, then do not worry. You are going to love the last next method of podcast monetization that I am going to discuss today.

How do podcasts make money: Selling merch

That’s right! Selling merchandise is not limited only to YouTubers. Many podcasters sell their own merchandise and are thus able to have another source of income from their podcasts.

Here is the thing, podcasters who create good content for their audiences, whether it is for entertainment purposes or for learning processes, their listeners feel like they are gaining something useful for free.

That is why many people like to give back or support their favorite podcasters by requesting that they sell their merchandise, and when it is available for purchase, they usually buy it.

This is an excellent way for podcasters to earn a little bit more cash and become closer to their audiences. Some people mostly only make money from their merchandise, for example, YouTubers who always have their videos demonetized.

But, does not that take a lot of time and effort? Where are you going to get all the stuff that you are going to sell, and how long is it going to take you to ship all of the orders?

Here is the thing, you do not have to worry about any of that. There are many sites that you can use that will handle all of that for you for a flat fee per item.

All you have to do is come up with the design you want, which you can hire someone on Upwork and freelancer.com to do for you, upload it to the site you are using, and choose which items you want to sell. Are you just going to sell T-shirts and hoodies, or do you want to sell socks and mugs as well?

These sites offer a lot of options, so take your time picking what you want and feel free to ask your supporters what kind of merchandise are they interested in.

But, which sites offer these kinds of services?

Well, there is a lot, but a couple of popular ones include the following:

  1. Teespring
  2. Printful
  3. RedBubble
  4. Printify

Before you settle with one site, make sure that you do enough research and look for people who compare the quality of products of these sites.

For example, many people use Teespring; however, my friend has a terrible experience with them because they keep on printing the design on mugs very badly. Every time she sends a complaint, they say that they will fix it, then they end up sending her the same, distorted design on the mug.

Other questions related to how do podcasts make money

What platforms can I use to diversify my podcast’s revenue?

There are a lot of platforms that you can use to diversify your podcast’s revenue — platforms like YouTube, Patreon, Stitcher, Spreaker, and Spotify.

How can I monetize my podcast?

There are a variety of ways to monetize a podcast, and the most popular one is by getting sponsored. Two of the major models are cost per mille (CPM), which means cost per millie or thousand listens, and cost per acquisition (CPA).

What does CPM mean?

Cost per mille ( CPM) is a model that sponsors use to pay influencers and podcasters for the sponsorships that they take. This means that they will pay them a specific amount of money per thousand listens or downloads. For Youtube, this means that the YouTuber gets paid per thousand monetized views.

How can I improve my podcast’s CPM?

The more influential you become, the higher the possibilities are for you to get a higher cost per mille/ cost per thousand listens CPM. Focus on creating great content, growing your audience, and engaging with them.

On average, a podcast’s CPM ranges between eighteen to twenty-five dollars ( $18-$25). The top podcasters, on the other hand, have a CPM that ranges between twenty-five to one hundred dollars. ( $25- $100).

How to Make A Podcast Unique?

There is a lot of things that you could do to make your podcast unique. A few factors that you could work on to make your podcast stand out include picking a niche, having a format that is different than what most podcasts have, and of course, being authentic.

To learn about this in more detail, make sure you check out my How to Make A Podcast Unique blog post.

That’s it for today’s post. You should now know how you can monetize your podcast using five different methods. If you have any questions related to how so podcasts make money, then feel free to email me at podcastingdiaries@gmail.com.

If you have recently launched a podcast and you would like a shout, then feel free to email your podcast’s name and link at podcastingdiaries@gmail.com.

My Sources:

Till next time,

Ayah

Ayah Assem

I am a creator and a consumer of many forms of artistic content. With podcasting leaving its mark and declaring its significance in the current content world, I have decided to learn everything related to how to create a podcast. Who knows, maybe in the near future I will start uploading and sharing my creative work in the audio format. Join me on my journey of understanding the podcasting world, as I will be sharing with you all of the information that I am going to learn. Feel free to share with me your podcasting journey at podcastingdiaries@gmail.com and keep an eye on all of the music, books, podcasts, movies, tv shows, and YouTube channels that I always reference.

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