Podcasts have surged in popularity, and many creators are eager to turn their passion into profit. But how exactly do podcasts make money? From sponsorship deals and listener donations to premium content and advertising, there are several ways podcasters can generate revenue.
By attracting a dedicated audience, podcasters can tap into various income streams, each offering its own set of opportunities and challenges. Understanding these methods can help aspiring podcasters navigate the path to monetization and turn their shows into thriving businesses. Whether you’re dreaming of launching your own podcast or just curious about how they make money, this exploration offers valuable insights.
Let’s go through some of the ways that we discovered podcasts generate revenue and what worked best for us.
This article assumes that you have a podcast already, and understand the basics of getting started. If you’re just getting started in the podcasting world, check out our beginner’s guide to get a head start!
How do podcasts make money?
Ads or sponsorships
By far, the most common way that podcasters make money on their podcasts are ad reads and sponsorships, and many different ones are frequently done. These are usually performed during the show where the host will read an ad plugging a product or sponsorship at least a few times at key moments.
The way that you make money from ad reads and sponsorships is typically dependent on the amount of downloads your podcast usually garners. However, some companies will pay a rate up front as well, depending on the brand and your relationship with them. Recording ad reads personally instead of playing a pre-recorded one can sometimes feel more personal to your listeners.
There are also ad networks that can boost a podcast’s ad reach through personalized campaigns and ad strategies.
Some of those ad networks that you can use are companies like:
These networks all have their pros and cons, but we find that Adopter Media and AdvertiseCast are two of the best options out there.
With ads, the question is always going to be about how much money you can make with them. Ads are typically sold using a CPM model, which stands for Cost per Mille. This is a measure where advertisers pay a set price for every 1,000 times that an ad is heard on a podcast. For example, if the CPM is $25 and the podcast ad is heard 28,000 times, the podcaster will receive $700 for that ad campaign.
Affiliate deals
Affiliate deals are another common way that podcasts can make money. Similarly to ad sponsorship deals, affiliate deals tend to deal with a podcast promoting a brand, product or service in exchange for a commission.
Affiliate-based ad deals will typically be from e-commerce brands (Athletic Greens as an example) or SaaS companies, which stands for Sales as a Service, with Shopify being a prime example.
Amazon Affiliate, or Amazon Associates, is a free program that allows content creators to earn money by promoting Amazon products on their websites, blogs, or social media accounts. Once approved for the program, you can use link-building tools to create and share affiliate links with your audience. When someone clicks on your link and makes a purchase, you’ll earn a commission that ranges from 1% to 20%, depending on the product category.
Premium content and community
Once you start building your podcast, a great way to monetize it is by opening up the opportunity for your community to “do more.” By this, we mean purchasing a premium subscription or content package that allows you extra benefits from the podcaster.
Some of these benefits are strictly materialistic. For example, they could be podcast merchandise or a special badge granted to the listener/viewer.
Other benefits are more mutually beneficial and can include meet-and-greets, one-on-one calls, fan-based access, coaching sessions, or similar activities. Building your podcast community is important, and if you connect with people enough on a personal level, they are more willing to purchase things from you that drive revenue for your podcast.
At the end of the day, these are the people you will, albeit indirectly for the most part, spend a significant amount of time with, and them you. You want to build a community strong enough that they are willing to follow you wherever you go, and buy products that you put your money into producing for them.
Your “core fans” or super fans, are a key aspect of your community’s health and growth, and nurturing your relationship with this group of fans will pay dividends across the board. They will tell their friends about your content and community, they will make friends with others inside of your community, AND if you’re able to develop these relationships, those fans will make not only your content a part of their life, but they will make your community part of their life.
Oftentimes, these core fans end up wanting to support you through your sponsorship and affiliate deals.
Protect these fans, nurture these relationships, and treat them with respect, it WILL pay off over the long term.
Product sales
Going alongside the community angle, a good way to bring in new revenue for your podcast is by selling a product or offering a service.
Most of the time, the product, at least initially, is branded merchandise. Print-on-demand companies like Printful make this process super easy to get started, you can legitimately have a multi-product line published and ready for sale in less than a few hours of work.
Another product you can sell is something that lines up with the content of your podcast. For example, if you have a real estate podcast, you can sell a real estate course and generate revenue that way.
Video content and repurposing for YouTube
In previous articles, we have discussed repurposing content for other mediums. One tactic that works very well is turning an audio podcast into a video podcast for use on sites like YouTube. This strategy allows you to take advantage of Google AdSense on YouTube.
AdSense is a feature for YouTube developed through Google in which users that are in the YouTube Partner Program, and how it works is that it uses an auction system to select and show ads on videos enrolled under the YouTube Partner Program.
YouTube also has some notable subscription features that you can use on someone’s channels, namely Super Chats, Super Thanks, and memberships.
We’ll hit more on memberships below, but Super Chats give your fans a chance to have one of their comments in your livestream highlighted. Oftentimes, Super Chats are sent to show support to the creator, or they can be sent in an effort to have a specific question answered. Super Thanks, on the other hand, are a relatively new feature from YouTube that allows users to have one of their comments on a non-live video to be highlighted in the same manner as Super Chats for a live stream.
These features go hand in hand with your community-building efforts. Your core fans are significantly more likely to both join your membership programs and to send Super Chats or to comment with Super Thanks.
Direct audience support
We mentioned YouTube memberships above, so now, let’s dive in.
YouTube memberships are a feature of the YouTube Partner Program that allow YouTubers to create and sell membership tiers to their community. These tiers can include custom channel badges and emojis, exclusive content like member-only live streams or videos, or community posts.
You can reward your channel members with different badges based on the level and length of their pledges. It may seem trivial from the outside, but your core fans LOVE this stuff. Trust us.
There are also other types of memberships that you can set up for your podcast that audience members can support you through monetary means, like Patreon and Discord memberships as well.
Discord has been a favorite of the video game-streaming community for years now, and has been an integral tool in building communities online. It is basically an all-in-one online chatroom, where you create your own text channels, can hang out in voice or video chats, or advertise products and services. This gives members of your community a chance to not only connect with you, but also to connect and find common ground with your other supporters.
Discord has a lot going for it as a platform, but two of the main highlights are that it’s completely free to use, and also connects seamlessly with both YouTube Memberships and our next crowd support option, Patreon.
Patreon, is a direct subscription method that allows fans to connect with the creator personally. It offers subscription tiers that the creator can build to offer benefits at an ascending level, like the higher you go, maybe the more exclusive content is available, or the highest level gets you a personal one-on-one call, and things of that nature.
We have used both Patreon and YouTube Memberships to monetize podcasts for ourselves and our clients. We find them both to be extremely effective, but if we had to pick one, for most creators, our choice would be Patreon because they take a smaller percentage of your revenue, in addition to providing some insulation against being fully reliant on the YouTube partner program.
Like most things in life, choosing the right platform for you and your content is about striking the right balance. If you have a large following on YouTube, you may find conversion to your YouTube membership program to be a lot easier than if you had a Patreon. On the other hand, if you have a large following on YouTube, and a large majority of your income comes directly from YouTube and its Partner Program, an argument can be made for diversifying your income streams away from YouTube(or Google).
Find the balance that works best for you, and take it from there.
Is it possible to make money on podcasts without ads or sponsors?
In short, the answer is yes, you can absolutely generate revenue, and a good deal of it, on podcasts without ads.
Through affiliate programs, premium content, and product sales, there are monetization opportunities to be had for content creators in this industry. If you are able to tap into building a noteworthy community around your podcast, you don’t need ads and can generate plenty of revenue by offering that community notable benefits.
Crowd-funding is another option that people have used to earn money for their podcasts. Crowd-funding is when you set up a campaign for people to donate money to you for a product or service. Kickstarter is an example of this, or people have also set up projects to fund, like cryptocurrency companies setting up NFT (Non-fungible token) projects that people buy into.
What type of monetization has worked best for us?
We’ve tried every single one of these growth and revenue-generating tools to try and bring in money from a podcast. Some have worked better than others.
Our founder, Jordan Fiegleman who had a popular podcast called Nation of Recap (average of 20k downloads per episode), found that premium content and community-building through YouTube led to generating the most revenue.
Some of the tools he used were live streaming his podcast to YouTube, building a public, free-to-join Discord channel, and combining that with sponsorship and ad revenue. What this did was maximize the community aspect of the podcast by allowing people who were big fans of the podcast an opportunity to donate money and become super fans through YouTube and then parlay that into a premium section of the Discord where premium members could hang out with our founder and his co-host.
In our experience, most podcast audiences aren’t large enough to truly cash in on the full power of sponsorships and advertisements. When you are able to garner nearly 10,000 downloads an episode, you can start taking full advantage of those sponsorships, but most podcasts (including the Nation of Recap podcast initially) tend to lean towards premium content and community in order to generate revenue until you are big enough to start taking advantage of ad revenue.
Final thoughts
In summary, monetizing a podcast involves several strategies, each with its own benefits and challenges. Ads and sponsorships remain the most common revenue sources, often dependent on audience size and engagement. Affiliate deals and premium content offer additional income opportunities, especially when building a loyal community, while selling merchandise or creating supplementary video content can further boost revenue.
While ads can be lucrative with a large audience, many successful podcasters find that focusing on community-building and premium offerings is more effective in the early stages. Ultimately, diversifying income streams and engaging with your audience are key to turning your podcast into a profitable venture.
