‘What is my podcast worth?’
This is a surprisingly hard question to find an answer to. If I want to find out the value of my house, I can do that within a minute. My old camera? 30 seconds. My car? Well, I don’t have one, but I imagine it would be easy. My dog? You can’t put a price on love.
But try and find any information on valuations for podcasting, or indeed the simple act of buying or selling a show, and the internet is deeply unfriendly. ‘Buying and selling podcasts’ brings up scores of DIY business shows, whilst the best that ‘podcast valuation’ gets you are a few articles asking if you can make a living podcasting (yes, you can). But establishing what the real-world value of your podcast is should be hugely important to us as an industry, in developing our shows, pitching to investors, and, maybe one day, exchanging one of our babies for that sweet, sustaining nectar: cash.
I have argued for a long time that podcasting, as an industry, needs to work out how it wants to be economically sustainable, even profitable. And people around me seem to be waking up to this fact — more and more, I sit down with podcasters who are clearly unhappy with the advertising rates offered by most of the key agencies, or by the idea that you have to get your audience to do a Patreon whip round if you want to feed yourself. It still feels like the wheels aren’t really moving, but people are starting to angrily shift gear, and maybe, just maybe, we’ll see a forward lurch.
And on top of people being more aware, generally, of the financial aspect of the business, we’ve also seen a lot of industrial commentary about certain acquisitions (apologies for the euphemism, read on for more) that have come with vague insinuations about the value of individual shows. So, in fairly roundabout terms (and assuming you’re not Joe Rogan or Dan Carlin), let’s talk about how much your podcast is worth.
The Hollywood end of the podcasting spectrum…
When Spotify, earlier this year, bought Gimlet Media for a reported $230m dollars, what were they buying? Gimlet are estimated to have about 50 full time employees (LinkedIn brings up 145 employees, though that tends to include freelancers) and are a year or so into a 10-year lease on a 27,000 square foot office in Downtown Brooklyn. All well and good, there’s some infrastructure there, but no one shells out big bucks in order to simply take on salary and rent obligations. So what’s worth over $200m?
The answer, I think, is twofold:
Gimlet currently has 14 shows, from Rachel Ward’s kids podcast Chompers through to founder Alex Blumberg’s talk show, Without Fail. It’s a dignified roster (they haven’t peppered it with loss-making or audience-shy shows, just kept ploughing away at the successful core) but hardly a big one. If they alone were spurring on Spotify’s investment it would mean that their feeds were, on average, priced at $16.4m. That’s quite the figure.
The second, more realistic part of this equation, is that they’re buying the Gimlet brand for content creation (and there have been lots of good articles written about how Spotify might plan to harness Gimlet’s industrial clout). When Disney bought Marvel for $4bn in 2009, yes, they wanted to get their mitts on the rights to Iron Man and Thor, but equally they wanted to have a dog in the incredibly lucrative superhero fight, and that was a way of smashing, like Hulk, into the top echelons. Spotify are doing the same thing (and for about one 16th the price of Marvel, makes Disney look like very shrewd negotiators) by purchasing extant podcast products, but also jumping the queue in a crowded marketplace by taking over the single hottest brand in the industry.
And that’s the thing with Gimlet, the thing that’s separated it from other podcasting enterprises. It’s all about the brand. It’s telling that their first podcast was StartUp, a self-mythologising documentary about their own inception process. It was a great exercise in something that was simultaneously content creation, advertising, and thought leadership (the Holy Trinity).
I might get in trouble for saying this, but Gimlet haven’t made any podcast that I would really describe as a blockbuster. Some of its most successful shows, like true-crime/social documentary Crimetown, feel like popular but relatively minor instalments in their genre canon. Reply All is, perhaps, the closest they have to a golden goose, but with about 500k listeners, it’s hardly The Avengers. All of their podcasts are very good, very polished, but compared to some of the stuff coming from NPR, NYT, BBC, WNYC and iHeartRadio (since it acquired the HowStuffWorks podcasts for a meaty $55m) it feels fairly small fry. They don’t get anywhere near Podtrac’s most recent Top 10 publishers by audience size.
So, what’s your podcast worth?
The first question, I suppose, is what are you selling? A single podcast, a slate of shows, the entire infrastructure of a podcast publishing business?
Podcasting, as an industry, hasn’t really got into the habit of horse trading over the publishing rights to single series, or single seasons of series, which I think is a shame. It would make it easier for the industry to come to terms with the value of its product if this were the case.
The most important elements for publishers, I think, when valuing their products are the following:
• On one hand, it doesn’t matter how much money your podcast is making now. You are selling an editorial, not advertorial, product that the buyer can work out how to monetise.
• On the other hand… if you’ve signed a $10k advertising contract it will obviously be proof of viability to a purchaser, and many will use revenue stream as a metric for valuation (even though I think that’s a very tricky thing in podcasting, where so much of the value, industrially, remains latent).
• What’s the size of your audience? Audience size is the second most important audience-related piece of information in terms of valuation. The size is obviously relative and heavily contextual; 100,000 listeners to a sports podcast does not equate to the same relative audience size as 100,000 listeners to a banking insurance podcast, say.
• Which brings me to the more important question of who your audience are. There’s been a lot of discussion in the media for years about The Monocle Model (i.e. if your readers are rich enough, it matters less how many of them there are) and the same applies to podcasts. If you can demonstrate the industrial lobbying power of your listenership, or that they fulfil certain demographic requirements for purchasers, you’ll be in the driving seat. By and large the equation is, sadly, that 100 listeners on Wall Street will be worth more than a 1000 rural households, for example.
• Then there’s the question of the position that you hold within your marketplace. Again, podcasts that are mid-tier in very crowded areas simply don’t have the value of top shows in more specialised areas. Think of it like this: how many shows with a better product or a better brand or simply better listening figures could your prospective purchaser buy? If the answer is zero then you’re in a great (albeit unlikely) negotiating position. But the reality is that most people will have to compete against hundreds, if not thousands, of other shows.
• And finally, as ever with any business, so much will depend on who you are and how credible your proposition looks. Your data can be brilliant, your reach and engagement wide, but that doesn’t mean you’ll i) have access to investors or buyers, or ii) be taken seriously by them. Podcasting is in a battle against its perception, which is why slick suited folk like Alex Blumberg, who looks and dresses like a young(ish) Tim Cook, get a look in, but plenty of rambling, sweary bros recording in their basement with huge audiences, don’t.
At the end of all that, I don’t have a good equation for calculating the value of a podcast. I don’t think that a show with 250,000 subscribers is worth a $1m by default, but nor do I think the podcasting industry should be bashful about claiming that. Put aside the infrastructure question (which, in one sense, should be a tick in podcasting’s column) and it seems more reasonable. A newspaper with a 250,000 weekly circulation wouldn’t hesitate to value itself at a lot more than $1m (nor would magazine, TV show, yadda yadda). And I don’t think the problem of revenue should necessarily fall at the door of the seller (a show with 100,000 free subs is clearly worth a lot more than a show with 5,000 Patreon subscribers paying 5 bucks a month). The value is the audience — the extent to which they are monetised as an advertising or subscriber group is the ultimate question/problem in podcasting, but it is one that will be solved top-down (I’m afraid).
Things to remember
I am increasingly obsessed with reminding people of the value of their intellectual property. That is the product we have in podcasting. Your branding, your shows, your feeds, your archive; that’s what’s worth something.
Where possible keep legal control of your copyright, especially with ground zero advertising deals or heavily sponsored content. A year long advertising deal is fantastic and worth something (obviously), but the loss of your intellectual property should be worth something also. If an advertiser/partner insists on retaining the publishing rights, the copyright, then that should be factored into what they’re paying, even if you don’t have proof of audience at that point.
And above all, take seriously the idea that long-running feeds with history, fans and a captive subscriber base are worth something. I hope that we all get a bit more used to the idea of buying and selling podcasts. I think it will, in the long term, be a way of stabilising independent publishers in a turbulent market, and will also answer the question of what your podcast is worth more thoroughly than any blog post could.
If you liked this, do follow me on Twitter and feel free to reach out to me at nick[@]podotpods.com with your thoughts (provided they’re not angry criticisms, please).