The Harsh Reality Of Audience Supported Podcasting

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Every now and then, podcast listeners tell me that they’d gladly donate a few dollars each month, if only the ads would go away. I get that. It’s a nice thought that listeners would support the content they find valuable and subscribe. It’s also a nice thought that the sum total of subscription revenue would pay the bills.

Sadly, neither of those things are true.

In my experience, less than 1% of listeners will financially support a podcast in any way. That might be through affiliate programs such as Amazon’s. That might be through Patreon patronage. That might be through Paypal donations. That might be through a regular subscription. Whatever the way is, it just doesn’t matter. Almost no one that listens to your show is likely to become a direct source of revenue.

How much money needs to come in for your show to do away with advertisements? That depends on your goals, and I’ll assume you’ve got one of two.

Goal 1. The podcast paying for itself.

One goal is for your podcast to simply pay for itself. You’d like the audience to pay for a mic upgrade, hosting services, a mobile recording rig, your move into vlogging, and maybe some coffee now and again. If the show earned perhaps $3K a year, you’d be ecstatic.

$3K a year is $250 a month. If 1% of your audience donated $1 a month, you’d need an audience of 25,000 to meet that $250 a month goal. Hmm. A 25K audience is hard to build. Very hard, indeed.

As we reflect, $3K in donations is taxable income, categorized as “self-employment” income in the US. So, from your $3K, you’ll get to keep roughly $2,100. You could funnel all the donation money through an LLC you’d have to create, and then track expenses, etc. That might help you keep some more of that money and pump it back into the podcast, if you’re generating expenses directly related to what has now become a small business.

Did you mean to be running a small business?

Goal 2. The podcast paying for your life.

The second goal some podcasters aspire to is podcasting as a career. In this scenario, how much do you need to make so that you can live, podcasting being your primary source of income?

Let’s use a round number of $96K as a desired annual income, which perhaps sounds like a lot of money. But again, after self-employment income tax in the US, you’ll be left with around $67K to live on for the year. Oh, and you might need to pay for healthcare for at least yourself if not your family, which isn’t cheap even under the ACA. My point being that $96K isn’t nearly as much as it sounds like when you’re working for yourself.

Maybe you need more money. Maybe you need less. Adjust the math to your specific situation. In our example here, you need $8K each month in donations. We’ll assume 1% of your audience donates $10 each month. That’s a generous amount for an audience member to donate by podcasting standards, but we’re trying to make the numbers work.

That means 800 listeners would donate $10 a month to bring you up to that $8K threshold. Based on my “1%” experience, you’d need an audience of 80K to support you.

Let’s face it. For most, advertising is here to stay.

If you want to podcast for fun and make enough to cover the bills, sure. You can maybe work that out. For a minimal effort show running barebones, the costs are low enough that you can afford to pay for it out of pocket anyway. Donations you get are nice little bonuses. That trickle of dollars won’t add up to much, but it’s fantastic encouragement when your audience cares enough to spend a little cash.

Making a living from your show is a different challenge, however. I acknowledge there are exceptions, but most podcasters will quickly discover that the audience just doesn’t care enough to meaningfully donate. They might subscribe, make comments on your site, send you email, and interact with you social media. Maybe. But donating money is unlikely.

If the audience won’t monetize you, you’ll have to monetize the audience — the standard business model for media of all kinds for decades if not centuries. Advertisers will pay to have their message shared with your audience, and those advertisers are willing to part with far more of their money than the audience is. Therein lies a podcaster’s business model. (Of course, you have to actually have an audience…)

A topic for another day is how to run the inevitable advertisements in a way that engages, rather than repels, your audience.

By Ethan Banks

Ethan Banks is a podcaster and writer with a BSCS and 20+ years in enterprise IT. He's operated data centers with a special focus on infrastructure — especially networking. He's been a CNE, MCSE, CEH, CCNA, CCNP, CCSP, and CCIE R&S #20655. He's the co-founder of Packet Pushers Interactive, LLC where he creates content for humans in the hot aisle.

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