The Podcast Monetization Problem And A Call For Change.
Note: The original version of this article called for the “unionization” of podcasting. It was a poor choice of words on my part as what I was envisioning was more of a trade group. After receiving a surreal amount of feedback on the article that follows, I decided to make some changes to better clarify what I’d like to see happen in the podcasting community at large. I appreciate the feedback and passion of all who reached out. Thanks.
If you read my recent article on Spotify, you know that monetization through advertising is about to get a lot harder than it already is. And, if you read The Outline’s article on the income of Patreon creators, you know that monetization through elective giving is not a sustainable, or even effective, method of making a living for most podcasters. Why do podcasters have such a hard time making a living?
The First Problem: Weak Value Proposition
Podcasts have an inherent value proposition but, because they are free and widely available, that proposition cannot be leveraged to any significant extent. This problem is not unique to podcasting, it plagues all of the larger artist and maker communities. Your art is only worth money if it can be used to benefit a larger commercial enterprise — this is why an artist who functions as just an artist can barely afford to eat while an artist who has decided to function as a graphic designer can make $50K a year fairly easily.
Welcome to free market capitalism — where in order to make money you must have a product people want or need if you want a prayer in hell of selling it to them.
I think the argument could be made that people want and need podcasts, but they don’t want and need yours, so if you start charging, they’ll go somewhere else.
And so all hoped-for revenue must come from ads, sponsorship, or elective support by die hard fans which make up just 1–3% of your total fan base.
The Second Problem: RSS and Authentication
If you’re a podcaster with a Patreon account, or if you’re a listener who pledges money to a podcaster on Patreon, you’ll be familiar with this:
This is a “private” RSS feed so that only you can access the content you’ve paid to access.
Here’s what the link looks like (I’ve changed it, so it won’t work): https://www.patreon.com/rss/oldstories?auth=xgP0lThDGjr9l3CTNnMU
The RSS feed is everything before the “?”, everything after that is a “token”. Nevermind what a token is, all you need to know is that this is not real authentication — this is a parlor trick no better than simple address obfuscation. Anyone with this address can access the content on the other side. Doesn’t matter if they’re using your computer while logged into your account and sitting in your bedroom, or using a podcast app on a cellphone while sitting on a couch in a house in Uganda.
In order to provide true authenticated access to an RSS feed, you have to provide a platform for users to log into with a unique username and password.
But, Patreon has that!
They do, but here’s the hangup: no one who listens to podcasts is going to log into Patreon to listen to the one podcast they choose to support out of the dozens they likely listen to. The supporter wants to be able to plug the RSS feed into the app they already use for listening to all their other podcasts.
Patreon (or anyone) cannot truly secure an RSS feed without forcing listeners to access it through a proprietary platform, one which requires them to go out of their way.
You cannot secure and RSS feed without inconveniencing listeners.
The Third Problem: Direct-to-Creator CPM Disruption
In 2014 if someone wanted to advertise on your podcast, they had to come directly to you. If you demanded a $20 CPM, you got every dime of that $20. So if you had 10K listeners, you were making $200 an episode. Not bad.
But advertisers didn’t like this. They didn’t like going to some amateur podcaster in a random suburb in Indiana creating content in their basement, to reach their potential customers. The main reason they didn’t like it was because podcasters didn’t know diddly squat about their listeners. They didn’t know who they were, how much they made, what gender they were, how they tuned in, where they were listening from — like their car or their office — , they knew barely anything. Podcasters only knew they had some number of listeners (and those numbers were hyper inflated because of the lack of reliable data). Here’s an excerpt from my Spotify article:
An advertiser’s goal is always a lower conversion cost. The less money an advertiser spends for the most conversions possible, the better. This means the more qualified the audience being advertised to, the better. This, in turn, means that the podcast creators who best understand their audience and are able to provide the most assurance to advertisers that the members of that audience are interested in their advertisements, are preferred over those who don’t and cannot.
Advertisers want to know they’re not wasting their money.
Fast forward to 2018 and Spotify starts adding podcasts to its platform. Its commercial music streaming platform that collects a good amount of information about their users and both charges a monthly premium and runs advertisements across all its content. Here’s another excerpt:
Spotify will roll out an ad revenue sharing program to podcasters soon enough, but that program will fail most podcasters because of Spotify being the middleman between the the Advertiser and the Podcaster. The $35CPM paid to Spotify will become the $7CPM paid to you (and folks, I’m being real generous with that $7CPM).
The Fourth Problem: We Seem To Have No Choice
The metaphorical gun being pointed at us only points in one fixed direction, but we seem unable or unwilling to step out of its line of fire.
We have to list our podcasts everywhere, because we have to get listeners if we want to make money. How can we NOT list on Spotify? How can we NOT list on iTunes? Stitcher? Google Podcasts?
I think there’s a way not to, but first…
A Recap Of The Problems
- We create art that is widely available, free, and, due to that free and wide availability, needed by absolutely no one.
- We are unable to truly secure our art without inconveniencing the people we rely upon to earn a living by it.
- Centralization of content on large commercial media platforms with access to resources which independent artists don’t have, reduces those artists’ ability earn an income through advert placement.
- Independent creators looking to generate a sustaining income from podcasting are staring down the barrel of a gun they’re choosing to stand in front of.
The Solution: Extreme Disruption
The great thing about podcasting is that the creators hold all the cards. It’s our content, we own it, and we can take our RSS feeds offline in a single click. We can stop producing content right this second and never record another podcast episode ever again. We’re in a position to make all the rules, and yet we make none. Why? We know exactly what’s coming, but we’re doing nothing to stop it. Why?
I think podcasters need to forcibly reject the faux free market they’re currently creating in.
Free market means you create something and if people want it, they’ll pay for it and you’ll succeed. If they don’t want it, you’ll fail. But podcasters don’t sell their podcasts, they give them away for free. When was the last time you bought something free? That’s not free market, that’s philanthropy or charitable giving.
It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.
— Adam Smith, Wealth of Nations
Have we, as podcasters, no regard for our own interests? Imagine how few supermarkets there would be if they gave away all their food and asked only for elective donations at the door.
It’s absurd. That’s not free market.
We need a platform which allows us to present podcasts themselves as the product. Not the extras, exclusives, or perks.
This imagined solution would be freely accessible to the general public through a single application/service which required user registration and would deliver content through a truly secure and fully authenticated platform.
Users listening for free would need to tolerate ads and could a la carte ad removal from the shows they chose to support. There would be no “$20 a month gets you access to everything” nonsense. 5% of those purchases would go towards improving the platform while the rest went directly to the creators. Advertisers could place ads on the platform and an 80/20 (creator/platform) split of that revenue could further increase the sustainability of podcasting as a career.
We’re giving our art away and then complaining about being broke. We have the power to redefine the rules of this game, and I think it’s time we did.