If you and your company start looking into podcasting you’re going to find the phrase “low barrier to entry” which means, it’s easy to start. So why isn’t everyone podcasting?
IT IS EASY TO START:
The equipment costs are relatively low compared to other kinds of production. You can get a really good “podcast kit” for $2k plus a lap top. You can find hosting services that have free terms of service but if you want to make money with ads, you’ll need to look closely at those terms of service.*
The distribution is easy. You set up an RSS feed, get it into iTunes and voila! Your are now discoverable on many podcast apps and platforms. You don’t have to go negotiate distribution deals with all kinds of places, you (basically) just put your RSS feed out into the wild.
(And, you now face the same challenge as every other professional and amateur podcaster: how do you get an audience.)
I mean, when you look at it that way you could say “there’s a low barrier of entry to become a novelist” all you need is pen & paper to start writing, or if you want to get fancy, a computer.
Ok…. you have a computer… now go write a best-selling novel.
There’s a “low barrier to entry” to become a painter. All you need are some brushes, paint and canvas. Any art store can get you set up for $100 I would guess. Now go become a successful painter.
See what I mean? Just because the tools of podcasting are relatively inexpensive, does not mean the work is easy.
I think too many people confuse the technological low barrier to entry with the actual high barrier of producing quality content.
This is why a lot of companies that believe they have talent or a brand or a message that can resonate with the growing podcast audience will often times look for production help. Pair a writer or TV host with an expert who knows audio production, coach the talent to speak into a mic, do interviews and structure a story for the ear. It takes time.
Gaining expertise means spending money either hiring someone to be on-staff, paying a third-party to help, or some kind of share of your revenue.*
Unless you’re at a radio company or a podcast company, most online sales divisions are not plugged into the podcast sales world. Just like producing content in an unfamiliar medium is new for your editorial team, it’s a new set of skills for the sales team too. While podcasts have CPM’s just like videos and display, the buyers are different, the metrics are different, and there is a learning curve.
If you ask your sales team to take on your podcasting efforts they will want to know the metrics. How big is the audience? How many downloads will we get?
What they’re really asking is “how easy will this be for me to sell”? Because, if you can promise any smart sales person your product is going to be popular and successful, they will find a way to sell it. If it’s going to be a hard slog trying to build a decent sized audience, that makes the sales job that much tougher, and therefore less attractive.
So, what’s the solution? Well, you could hire someone who knows podcast sales and has the connections with the buyers to be your podcast sales rep, or you could give your inventory to any number of growing podcast sales firms for some kind of rev share.*
We know the podcast audience is growing, and we have our production help and our sales help. What can we expect in return?
Rob Walch, a VP at Libsyn, (one of the larger podcast hosting platforms) gave some numbers recently to All Access.
- Median number of downloads for a podcast episode that has been live for 30 days: 160. (half get more, half get less)
- Number of downloads in 30 days it would take to get advertiser interest: 5,000
- Number of podcasts that reach that 5000 download mark: less than 10%
I’m going to say here that getting advertiser interest at 5000 downloads isn’t likely. If you have a quality brand that wants quality advertisers, it’s more like 30,000.
So what’s a podcast CPM? Last year Digiday wrote that Slate’s popular podcasts are getting a $25 to $30 CPM.
So now everyone gets out their calculator and starts adding things up. Let’s say you start a podcast, and you get 20,000 downloads per episode over 30 days, has 2 ads in it, and you charge a $25 CPM.
20,000/1000 x 2 ads x $25 = $1000
Are you telling me that you can convince your boss to do all this work for $1000 per episode? Make it 3 ads and your revenue goes up to $1500 per episode.
* Oh wait… what about all those red asterisks in this article? Don’t forget we need a hosting platform that allows ads, production help and sales help. Those things are either eating into your revenue on a rev-share model, or you would have to hire some really cheap help to turn a profit.
I think this is the point a lot of media companies get to. They look at how hard the production will be, and how they don’t have the sales know-how, and they determine that podcasting isn’t for them.
They decide that you need economy of scale like Panoply or PodcastOne to really turn a corner in podcasting, and then it stops.
BUT, IT’S GROWING….RIGHT?
In a click-bait, viral media landscape slow and steady growth isn’t sexy. Investing in a new medium that might not return a large audience or large dollars right away is a tough sell.
So what does the New York Times know that others don’t? Why are they and others jumping in to podcasting after killing off most of it a few years ago?
I can’t speak for the NY Times, but from the link above here is their strategy:
Once the team is assembled, the plan is to pursue a two-fold strategy: to launch a handful of shows with outside partners which, like Modern Love, have a strong prospect of quickly attracting a wide audience; and then use those shows as a platform from which we can build audience for shows produced within The Times that are as integral to our coverage as our live events and visual journalism efforts.
Again, I can’t say what they know, but here’s what I know:
The podcast audience is growing, the audience is engaged, the on-demand nature of podcasting is “the future of media” and in order to deepen your relationship with your audience podcasting is a great place to be.
How do you get to a place where you sell out theaters for live podcast recordings with thousands of devoted (paying) fans? How do you get to millions of downloads and not just thousands?
There are few, and possibly no, short cuts. It takes work, it takes investment, and dedication. If you measure this purely on short-term financial gain, you are missing the big picture and the long-term strategy.
If you liked this, also check out: Why Podcast?
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