Running a podcast seems like a lucrative business idea at the moment. Lots of podcasters seem to make a decent income simply by talking to their audience. So it is no surprise that many others want to get into podcasting.
However, before you even think about buying a microphone to become the next Joe Rogan, we first need to look into how podcasters make money so you can see whether it will be a good business venture for you.
There are various ways that podcasters can make money. This depends on their audience size and the kind of ad revenue they get, for example.
If you want to start a podcast where you can talk to a like-minded audience about topics that interest you, then money should not stop you.
But, if you are looking to make money through your podcast, then you need to learn the different kinds of income that come from podcast revenue.
Podcasting is actually still very profitable if you have the audience. In fact, ad revenue for podcasting is actually better than video content or written content. According to AdvertiseCast, the average CPM for a 30-second podcast ad is anywhere from $22 to $27 per 1000 listens, depending on audience size. Now that’s just the average—if your niche is finance or career, you will capture a much higher rate than that. The average ad rate for websites and video content is much lower than that. The reason might be that podcasting is longform content that demands a lot of the listener’s attention so it converts better.
Below, we explore the various ways podcasts make money so you can get a better idea of the podcasting landscape to start one yourself.
How Do Podcasters Make Money?
There are various ways that a podcast can make money. Each podcaster needs to work on different venue streams to make a decent income.
You may see celebrity podcasters make hundreds of thousands of dollars with every episode they upload. It is important to note that a vast majority of podcasts get nothing from their work. This is certainly the case for podcasts that are in their initial stages of launching. This is also the case for podcasts that only have a small audience and only have several episodes.
There are several ways you can make money podcasting. But remember, the most successful podcasts rely on multiple streams of income to do so.
According to Edison Research, podcasters earn revenue through:
1) Sponsorships
This is the most common way to earn money in podcasting. This is usually the main part of the show’s revenue.
Sponsorships work when a podcaster promotes a product, brand, or service throughout their episodes. You have likely heard various ads on your favorite podcast shows from time to time.
Advertising is one of the main ways to make money podcasting, but you need an audience to advertise to first.
Ads in podcasts can be several seconds or minutes long, and podcasters sell ad space within their episodes to sponsors. These ads are used by other brands and businesses as advertising. They have the additional benefit of being able to reach a specific target audience.
The kind of sponsorships or brand deals that a show gets depends on the number of downloads per episode the podcast gets. Podcasts typically earn revenue based on the number of podcast listens (or downloads) the podcast has.
The number of listeners is estimated by the number of downloads a show receives per episode.
The more downloads and listeners a show has, the more they can charge for ads. This is because sponsors will know they are reaching a wide amount of people.
2) Affiliate Advertising
In a similar manner to sponsorships, you can earn through affiliate marketing. Through this kind of revenue stream, podcasters earn revenue based on the amount of product sales they make through their referrals. This is opposed to the number of downloads per episode or how much a company pays to advertise with them.
Sponsors can provide affiliate links that are used on a podcast as a way for the creators to continue making money through the brand after the initial sponsorship period has ended.
Anyone can earn money through affiliate sales, which is why you will see creators on all platforms sharing links to their audience. One of the most common affiliate services is run by Amazon.
Amazon offers an affiliate link for their main shopping website, as well as other products, including Audible.
Affiliate sales work through a commission, and it requires the podcaster to share a specific affiliate URL or promo code with their audience. When the audience makes a purchase with it, the podcast can earn a percentage of that sale.
This is a form of income that can help those in podcasting or other creative work earn additional money in the background.
Pat Flynn, in his podcast Smart Passive Income, regularly talks about this and helps his podcast listeners earn more money through different revenue streams.
3) Direct Support
Depending on the size of the podcast audience, podcasters can earn directly from their listeners.
Some of the most popular podcasts you will find on Apple Podcasts or other platforms will provide their audience with additional content for a fee. A podcast program might use a third-party website like Patreon, for example, where listeners can pay a monthly fee to earn additional content.
Patreon even gives podcasters the ability to create a separate paid-only RSS feed where paying listeners can get exclusive content. An ad-free RSS feed is another great revenue for direct support cash, and it can be a brilliant perk for listeners.
Direct support can also come in the form of donations from listeners or when the podcast starts to sell its own product. Merch products are a great way to earn money from your podcast, and they can work in any niche.
4) Display Ads (Video podcasts)
Another way podcasts make money is to make a video version of it and host it on sites like Youtube. The videos are then monetized via display ads that are displayed throughout the podcast episode. Video display ads usually have the lowest CPM (how much you earn per 1000 views) but they are low maintenance as it is automated.
How Much Money Can You Make From A Podcast
It is possible to make a full-time wage from podcasting, but this is only for shows that meet specific standards, such as a vast amount of downloads.
As we have mentioned, the best way to earn through podcasts is through multiple streams of income. If your podcast manages to get thousands of downloads per episode, you are more likely going to be able to receive sponsorships and work with affiliate programs than shows that are just starting.
Some people can earn millions through their podcasts, but these are usually those who were already established before venturing into podcasting. Examples are celebrities and social media influencers. As you may have heard, Joe Rogan recently inked a $100 million exclusivity deal with Spotify. However, he still has ads on his podcast and his podcast clips are still earning display advertising on Youtube. So the money that people are able to make through podcasting is astronomical.
Typically, before you can make money with podcasting, you need to spend money and work hard.
The best content out there is made to a high standard, so products like a good microphone and hosting fees will need to be paid for before you can expect to make money.
All podcasts start out making little to no money, depending on who hosts them. It is important that you play the game and do not try to monetize your show too early, as this can ruin future plans with advertisers and other services that could help you earn money.
Do Podcasts Pay Their Guests For Appearances On A Show?
You don’t have to be an expert in anything to have your podcast. This is why a lot of people are interested in creating a show of their own. A lot of podcasts are just friends shooting the shit about current events and it just happens to resonate with people enough to build a sustainable audience.
Having a guest on your podcast episode is a win-win scenario as it is a way to share audiences, reach more downloads and get closer to your financial goals. As it is a mutually beneficial situation, most guests are not paid to appear on an episode of a podcast. The guest gets exposure to a different audience and vice versa.
Someone will be a guest on your show as a way to promote their products or content, and this is the payment they will take. Having a guest on your show is a great way to develop a good reputation and appear more credible.
Many of your listeners will come for the guest you have on or the topic of your episodes. You will find that the podcast episodes that gather the most downloads are ones with a guest.
The more downloads your show receives, the more attractive you seem to advertisers, which means your chances of being involved in a sponsorship or affiliate program have increased so you can start earning money from your content.
Do Podcasts Charge For Guests, and Should I Pay To Be A Guest On A Podcast?
Podcasts can reach audiences all over the world, and one of the best ways to increase the number of listeners you have is by appearing on another show with a fellow creator.
As we have mentioned, guests on podcasts are a win-win situation as it is a way for you to promote your information as well as being able to share listeners with another creator.
There is conflicting information out there when it comes to whether guests should pay or be paid to appear on a podcast. Typically, guests are not paid to appear on a podcast, nor should you pay to appear on another show.
Appearing on another podcast is a great marketing tactic because it is a way to share audiences with other creators. This can result in a larger audience for you, which means more downloads and then better chances of being able to earn money through advertising or sponsorships.
However, the reason why podcasting is such a great side hustle or main hustle for people to partake in is that the initial production costs are low, yet the earning potential is large.
Appearing on another podcast can be a way to attract many more people to your podcast and therefore be more attractive to advertisers, but you need to determine whether paying for this privilege will be a good use of your marketing budget.
If you are just starting and do not have much money to spare, paying to appear on another show might not be the best option just yet unless you know that the results are going to help you make the money back.
Conclusion
One of the most common questions to be asked is “is podcasting still profitable”, and we hope it has been answered for you in this article. Podcasting is still immensely popular and profitable.
Podcasting is a popular gig, and it can be a good way for people to make money if they are willing to put in the work.
While all podcasts start making little to no revenue, the potential to earn cash can be vast even using just one of these revenue streams, which is why it is worth a try if you are looking to make more money.
