Every podcaster, no matter how big of a nerd they are, and no matter how much they love the medium, will tell you that putting out great episodes on a regular basis is no cakewalk. You may have heard that it only takes a mic, a computer and a little enthusiasm to start bringing your very own show to the masses. But while it’s cheap to start a podcast, it remains costly to sustain one.
Even if you decide to cheat your subscribers out of a quality audio or video experience by using the absolute dirt cheapest equipment available, you also have to put in time and effort recording, editing, coming up with content and marketing your show. Even if a podcast episode is not released as regularly as every Thursday, a podcaster must produce shows on a regular basis to keep their subscribers happy. And without a revenue model, much of that time may be better spent actually earning a living.
A lot of podcasters can’t hack it and fall prey to a phenomenon called “podfading,” coined by podcaster Scott Fletcher in 2005 after he abandoned two of his own podcasts. According to a Wired article published earlier this year, Rob Walch of the Podcast 411 estimates that 1/5 of all podcasts never make it past the 10th episode.
In an ideal world, a podcaster will be able to sustain themselves by getting lots of enthusiastic subscribers and making a little bit of money selling ads and sponsorships on their show. The more revenue that’s generated by the podcast, the more money the podcaster can sink into better equipment, and the more creativity they’re encouraged to exercise. The subsequently higher production quality of each episode, and the more effort and money that can be put into marketing the show will in turn draw more subscribers. More subscribers means more valuable advertising and so on.
Like TV and radio before it, as companies try to flesh out the best method of monetizing podcasts and draw closer to the podcasting ideal, we should start to see more and more high-quality shows with larger audiences. Podcasters are playing with their new medium.
And like the early days of broadcast advertising, we are seeing podcasts experiment with sponsorship messages, on-air reads, product placements, and shorter versions of the 30 second spot. They’re deciding whether an ad should play in the beginning of an episode, after the intro, in the middle, or at the end. Podcasting has also taken its toll on the monetization of traditional media. Alex Laats of podcast search company PodZinger makes no distinction when it comes to “old” media or “new” media. “The line between what is a podcast and what is not a podcast will blur over time,” he says, because “it’s just audio and video.”
Luckily there is no shortage of companies trying to help podcasters take advantage of this new medium. Companies like Fruitcast, Kiptronic, RadioTail, and Podtrac are all slightly different, but all of them attempt to insert advertising into the body of a podcast. Where broadcasted shows are typically one-shot deals unless they go into syndication, podcast episodes stick around for as long as their media files are hosted, cached, archived, etc. This also gives different opportunities for revenue generation that aren’t possible for broadcast. PodZinger just launched its podcast search advertising network last week, which places banners next to search results and inserts 15 second pre-roll videos in a corresponding Flash-based player.
Podcasting also depends on subscribers—literally the undersigned—who explicitly opt-in to a show. While it eliminates infomercials and other forms of advertising that prey on passive users, it also makes podcast advertising similar in some respects to print magazine advertising. There are no up-fronts, because there are no podcasting seasons, and no “sweeps” weeks. And even if a podcast contains advertising that can change dynamically each time it’s downloaded, once it’s on your hard drive, the ad is set. Every time you play it, it will contain the same advertising content. And if you decide to pass it around to your friends (depending on what the podcast’s copyright license allows for), they will see or hear that same fixed advertising as well.
But just like broadcasting finally settled on the 30 second spot as the standard form of advertising in most cases, the podcast advertising scene will also eventually stabilize, revealing one or two standard methods for generating revenue. Even the volatile world of online banners seems to have settled on Google-like contextual advertising as the most effective type. There will always be new technology to build on what podcasting already has, but its feet will settled firmly on some method that becomes tried and true.