Podcasts are “perhaps the greatest new revenue and subscriptions tool,” according to FIPP’s latest Innovation in Media 2019-2020 World Report. “If you go by statistics alone,” writes John Wilpers, author of the report, “the arguments for podcasts as a fast-growing, relatively inexpensive, extremely effective, lucrative revenue source and subscription-driver are hard to dispute.”
You don’t have a stable of podcasts? You’re leaving money on the table and forfeiting subscription revenue.Innovation in Media 2019-2020 World Report
Nearly 91M people listen to podcasts at least once a week
The report quotes the 2019 Edison Research study, according to which, “podcasting shows explosive year-over-year growth.” The study found that in the US alone, the number of individuals (aged 12+) who have ever listened to a podcast crossed 50% for the first time. Additionally, 32% were listening monthly, compared to 26% in the previous year. This increase is the largest since the data has been tracked.
Another study, by podcast measurement company Chartable, found that 23-25% of US adults listen to podcasts daily or a few times a week. This translates into approximately 60M people listening a few times a week or more, and 91M people, at least once a week.
What’s more, podcast listeners are more committed. The 2018 Infinite Dial Report mentions that the average podcast listener finishes 80% of a podcast episode (which average nearly 39 minutes). In comparison, a “good” YouTube finishing rate is 50% with viewing time of one to eight minutes, according to Chartable. A study by digital agency Uhuru, found that the average Facebook Watching time is just 23 seconds.
We’ve all heard the witticism that the human attention span has shrunk to less than that of a goldfish (reputed to be eight seconds). Not the podcast listener.John Wilpers, Author, Innovation in Media 2019-2020 World Report
“Revenue-producer and subscriber attraction asset”
“For the media company, it’s a relatively cheaply produced revenue-producer and subscriber attraction asset that cannot be poached,” writes Wilpers.
Podcasts are not like a news story, where a free title can come along and basically republish it, diluting the value of your paid offering. If you want a particular podcast, you have to go to the source.Joseph Evans, Senior Analyst at Enders Analysis
“And they’re a lot cheaper to put together than video, particularly the kind of editorial podcasts that news sites are looking into,” added Evans.
Podcasts offer a substantial and growing opportunity for ad revenues. IAB’s 2019 Podcast Revenue Report states that nearly $479M was spent on podcast ads in the US in 2018. This was a 53% increase from $314M the previous year. IAB projects podcast advertising revenue to reach $1B in 2021.
Here are some podcast growth statistics compiled by Wilpers:
- The Economist saw a 50% increase in monthly revenue from podcast ads in 2018
- Bloomberg reported its top podcasts bring in more than $1M per year
- The New York Times’ “Daily” podcast earned more than $10M via advertising
- Sports outlet The Ringer said it made more than $15M on podcast ad sales in 2018, averaging 35M monthly downloads
- The Financial Times’ 2019 audio ad revenue tripled over 2018
“There has been so much demand for sponsorship that it more than pays for itself,” Economist’s Head of Digital Strategy, Tom Standage, told NiemanLab. “The big change is commercial, which is that we had advertisers who started to come to us last year and say, ‘We are only going to buy two kinds of ads next year: print and podcast. What have you got?’”
The numbers are quite high for successful podcasts. For example, Freakonomics Radio averages 1.5M downloads per episode. An advertiser paying $50 for every 1,000 downloads would lead to $225,000 per episode for three mentions of the advertiser, according to the report.
These high CPMs are also driving the rapid growth of podcast ad revenue as a percentage of total media company revenue. National Public Radio in the US, is set to see its podcast sponsorship revenues surpass those from broadcast next year for the first time.
Podcasts have been a “huge return on investment for us and a major growth engine for our business,” said Deborah Cowan, CFO at NPR.
One of the reasons for the success of podcast advertisements is higher engagement and responsiveness. A 2018 Acast study found that podcast listeners had high engagement with ads. They were also more responsive with 76% of listeners saying they’ve taken action after hearing a podcast ad. This could include visiting a site, making a purchase, or taking out a subscription.
The rise of paywalled podcasts
An increasing number of publishers are putting podcasts behind some form of paywall. For example, Slate which was one of the earliest media companies to get into podcasting, introduced its membership product Slate Plus in 2014. It includes benefits like discounted tickets to live events, and access to web-only content and certain podcasts.
By late 2019, Slate Plus had 50,000 subscribers paying $60 a year which equals $3M. According to the publisher, 70% of the Slate Plus members joined to access the podcasts, which means they are responsible for $2.1M of the $3M.
However, charging for podcasts can be challenging. Popular podcast directories, including the dominant Apple Podcasts, do not offer podcasters a paid subscription option.
“The reason paywalled podcasts haven’t yet been fully exploited by publishers is because the usual podcast distribution tech doesn’t support it very well,” Evans told Digiday.
“You either have to put your podcasts on your own app, so people can’t use their own chosen player, or you have to do a weird secret RSS feed workaround, which isn’t very user-friendly and can be easily pirated,” he added.
The FIPP report suggests three workarounds to this problem. Publishers can:
- Create their own hosting platform. It can channel subscribers through the publication’s app or web page instead of a distributor like Apple. Slate did it, and now markets the platform to other podcasters.
- Use distribution platforms that allow them to charge for accessing podcasts. These include Patreon or Stitcher which allow publishers to ask for donations to access a podcast, or to special subscriber-only episodes of an otherwise free podcast.
The US-based political and humor podcast Chapo Trap House uses Patreon and generates $145,000 per month in subscription revenue.
- Put their podcast on a Netflix-like platform like Luminary. These are third-party podcast apps that charge listeners a flat fee for monthly access to a limited or unlimited number of premium podcasts in their library.
Publishers like The Ringer, Pineapple Street Media and New York magazine have listed their shows on Luminary.
While advertising, subscriptions and memberships are the popular revenue models for podcasting used by publishers, they are not the only ones.
There are quite a few other ways to generate revenue from podcasting. They include:
- Virtual summits
- Influencer relationships/joint ventures
- Online courses
- Coaching and consulting
- Affiliate marketing
- Brand extensions (selling own stuff)
- Repackaging content (for example into books)
- Paid public speaking
- Live events
- Paid apps
- Intellectual property (podcasts are getting turned into TV shows)
“It’s just getting started”
The report explores these models, and dives deep and wide into how publishers can turn podcasts into a meaningful and long-term source of revenue.
Podcasts are not the be-all and end-all solution, but they could be a very important arrow in your quiver of revenue models.John Wilpers, Author, FIPP’s Innovation in Media 2019-2020 World Report
Wilpers quotes Chartable Co-Founder and CEO, Dave Zohrob, who wrote in a 2019 blog post, “Our current Golden Age of Television started eighty years after the invention of TV, and a decade after the invention of the Web. And despite some dire warnings, the trend in more and better TV programming has yet to slow.
“In comparison, the Golden Age of Podcasts only took 15 years since the invention of the medium, and it’s just getting started.”
The full report is available for download from FIPP:
Innovation in Media 2019-2020 World Report
FIPP is organizing a webinar today, 16th of April. It will be hosted by FIPP President and CEO, James Hewes and will have John Wilpers talking about key innovations included in the report. He will also touch upon how they may help overcome the current and short-term industry challenges.
Some of the topics to be covered include recruiting and retaining talent, innovative monetization models, how to get creative, what makes for good journalism, and more.
Here’s the link to the webinar: https://zoom.us/webinar/register/9515859171174/WN_wdqPWBDPT0euug_P41i5sg
It takes place today, 16 April 2020, at:
- 9 AM Eastern Time
- 2 PM British Summer Time
- 3 PM Central European Time
- 6:30 PM Indian Standard Time