How to Make Podcasting Profitable

By Thought Leaders Archives
Cover image for  article: How to Make Podcasting Profitable

Choice is a marketing tool rather than an embraced function.  In the olden days car radios had five buttons.  Drivers could pre-select a station for each button.  Most Americans only programmed three.  Two were never programmed.  Three stations did the job.  Today, SiriusXM has about 145 stations but the number most subscribers select is five.  Your home probably receives hundreds of TV channels, but Nielsen reports, year after year, that the average number of channels we watch is 17.  Similarly, iTunes lists over 500,000 podcasts, most of them featuring only one or two episodes.  Some have numerous episodes but stopped new postings years ago.

According to Podtrac, NPR, Public Radio and The New York Times podcasts occupy some of the top spots in terms of listenership and downloads.  The audience that is attracted to those earnest shows is very much like the first round of television set buyers in the early ‘50s: Well-educated.  Early television catered to the college graduate crowd with shows like Playhouse 90, The Bell Telephone Hour and Edward R. Murrow’s See it Now documentaries.

Ah, TV. Wonderful programming. New Medium. All very exciting. A profit bonanza? No. Television networks took a long time to become profitable. Indeed, the CBS Television network didn't become profitable until the early ‘70s when programming chief Fred Silverman put on shows like M*A*S*H, All in the Family and The Mary Tyler Moore Show that appealed to a demographic desired by advertisers. Until then CBS under Senior Vice President of Programming Mike Dann was just trying to gather everyone it could.

The NBC Television network didn’t become profitable until about 1970 when it started airing Rowan and Martin’s Laugh-In and CHiPs.

ABC finally became profitable in 1977 when Fred Silverman (who had moved over from CBS) developed shows that targeted younger viewers. Hits included Happy Days, Laverne & Shirley, Welcome Back Kotter, The Love Boat, Donnie & Marie and Three’s Company.

And remember, there were only three networks. It took about 15 years for all three television networks to show a profit.  Demographic targeting brought the networks to profitability.

"How do we make money?" ask the podcasters. Well, if you make a good show and wait for an audience, you won’t make any money in a sea of 500,000-plus competitors.

Part of the reason that “smart” shows dominate podcast downloads is that it takes a friggin’ intellectual to figure out how to find podcasts, download them and access them. Even the graphics of most of the podcasts look like brochure covers from the Museum of Modern Art in Manhattan.

Non-media people will not go to SoundCloud or Podbean or Podomatic to find podcasts. They will likely Google, "How do I listen to a podcast?" The answers are often confusing. Or they may go to podcast aggregators and find ugly homepages and instructions such as: "Listen to podcasts from wherever you are using our web layer, our IOS or our Android app."

You may be shocked that most people have no idea what an “IOS” is and that misunderstanding alone will drive visitors away.

Online video companies hosting user-generated content had a similar challenge trying to sell advertisers on their “influencers.” All video influencers had millions of views, but those numbers only confused advertisers! HitViews, a company I co-created and launched in 2007, was the first to identify and monetize online influencers. We called them stars because they are!  One proven strategy to make money with those video stars was to organize them by product category. By doing so, it became simpler to pick and choose the right environment for a brand.

One solution for podcast monetization is the launching of elite platforms segregated by product category. Not categorized by the most downloads but featuring performers who present precision content regardless of the results, such as makeup, cleaning, automotive and parenting.

These focused platforms would offer robust information and entertainment within the category and they would not be integrated with other product lines. (Editor's note: Try, which addresses this very problem.)

This focus would make it possible for more advertisers to grasp the opportunity offered by podcasts far beyond the numbers. They would appreciate that the podcasts are vetted for consistency and quality rather than meaningless download counts. Suddenly podcasts would become an "easy buy."

Today many aggregators define "elite" by download count.  That confuses advertisers.  All brands seek a positive environment for their messages -- informative, fun, compelling.  Brands need to believe that podcasts understand their customers.  Of course, some podcasters get this, and many podcasts are profitable for their producers, but there is much room for improvement all around.

Credibility with brands occurs when a podcast is staged with others that appeal to specific, defined customers -- customers who use the product category. Podcasts that serve a given product category will be enhanced by an aggregation platform that offers a wide range of expertise and entertaining products (blogs, images, videos) that meet the needs of category's customer base. Expertise will be valued above download count.

Photo credit: Jakub Gorajek/Unsplash

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