Should you start a podcast to make money?
In the past couple of weeks, there's been lots of economic uncertainty. Plus, many of us are stuck at home. It's no wonder that lots of folks are looking to start a podcast!
At Transistor, we're seeing a surge of interest. However, I'm worried that some folks want to start a podcast now because they're hoping to make some quick money.
Podcasting has been an incredibly positive part of my life. I want everyone to experience its benefits. However, if you're going to start podcasting, do it with your eyes wide open.
If you need to make money fast, don't start a podcast
Unless you already have an established audience, podcasts typically grow slowly, and organically, through word-of-mouth.
I started podcasting in 2012. For the first year and a half, I didn't make a dime from my show. I showed up every week and kept trying to make the show better.
In late 2013, I launched an online community for my listeners. My podcast was for bootstrappers, and my listeners wanted a place where they could interact, and learn from each other. The demand for the community was pretty strong, and that year I made $9,363. That's not bad! But it was the culmination of two years of work. It definitely wasn't "fast money."
Since it launched, my podcast's community has done an average of $22,635 per year:
As my podcast has continued to gain momentum, my community has been earning more revenue in recent years. In the last 12 months, it's done $36,627.
(These screenshots are from Memberful)
Now, $36,627 won't pay all of my bills in a recession, but I'm certainly glad I started my podcast and membership site all those years ago!
You can achieve similar results, but it will likely take years to build up enough momentum.
If you're OK with starting small, I would start with Patreon
Jon and I started our podcast as we were launching Transistor. We had no customers and no revenue. Just a couple of microphones.
Every week on our podcast, we'd show up and share our journey. We talked honestly about what it was like to start a software company in 2018.
Surprisingly, people wanted to support us on our journey. They started contributing to our Patreon, which eventually grew to $300 / month. Later, we started selling advertising spots for $600 / month. Ironically, there were many months where our podcast was making more revenue than our software was!
Sidenote: the reason most folks sign up is they want to get a "shout out" at the end of each episode. Listeners love it, and some of our long-running Patreon supports have become a regular part of the show.
My point is: Patreon works great if you're OK with growing revenue slowly. It also has a cap (we've leveled off at around $300 / month).
But that's OK! In times of economic uncertainty, it's nice to have a few different streams of revenue.
Warning: getting advertisers is going to be difficult in this economy
Facebook, Google, Snapchat, Twitter: they've all seen revenues plummet during the coronavirus outbreak in the USA.
Even prior to the pandemic, it was a challenge for small indie podcasts to attract advertisers. It's going to be even harder now. There are fewer businesses advertising and more podcasters looking for sponsorships.
If you are going to do ads, I would recommend selling 2-3 months at a time. For example, on our show, you could get two months for $600 (8 episodes). We would take a maximum of two sponsors at a time, which helped us earn an additional $600 / month.
Finally, remember: your podcast has to be good
If you're starting a new podcast, you want to make it so good that people will tell their friends about it.
There are too many podcasts with "two friends, talking about sports" or "two friends, talking about movies." To stand out, you've got to be different.
I talked a bit about this in this talk I gave at PodSummit:
The other day, I was listening to Sam Harris' podcast. He's consistently had some of the best content about COVID-19 during the pandemic.
Lately, he's been trying this new technique where he "fades out" the conversation halfway through on his free podcast. To get the rest of the episode, you need to become a member.
His content has been so good lately, I become a member while I was out walking my dog. I stopped on the sidewalk, visited his website, took out my credit card, and paid.
If people are willing to pay for your podcast while they're out walking the dog, that's a good show.
There are plenty of good reasons to start a podcast right now
Seth Godin has provided one of the best rationales for starting a podcast that I've heard:
In another post, he provides more tangible reasons to create a podcast: you'll create new connections, you'll clarify your thinking, earn credibility, and create an asset you can use in the future.
For me personally, podcasting has positively impacted my career more than any other activity:
The best job offer I've ever received came from a CEO who was a listener.
I've had clients who started as listeners and have stuck with me for years.
I met my co-founder, Jon, because of my podcast. Four years later, we created Transistor together.
So should you start a podcast in the present environment? Yes! But make sure you're prepared to be patient and put in the work. It will take time before you start seeing the benefits, but the benefits will be worth it.