Serial is one of the most downloaded and popular podcasts these days, and has several significant backers (plus the marketing muscle of the This American Life public radio show to the advertising power of Mailchimp). But even it has had to ask (successfully as it turns out) for listener donations to fund a second season. What does that say about the economics of podcasting for business?
A podcast for your business is different from a podcast that is your business. The first is a marketing tool, and thus an advertising expense. Its value is measured differently than the second, which is something that is actually expected to make a profit. Serial falls somewhere in between, because it is a nonprofit venture, so is only looking to sustain its operations.
Quality Podcasts Cost Money
According to Medium, ad revenues for nine episodes of Serial added up to approximately $405,000. While you can download Serial for free, the podcasters have to pay to distribute the content. The more popular the podcast, the higher the cost of distribution. While it’s not public knowledge what Serial is actually paying, one estimate puts it somewhere in the neighborhood of $4,000 a month.
Serial has five staff members, including two high-profile public radio personalities that have base salaries in the range of $150,000 annually. Granted, these two individuals aren’t working exclusively for Serial, but whatever time they are devoting to the show is part of the budget. Salaries for the remaining three employees conservatively start at $40,000, but are probably higher.
By a conservative calculation, salaries take up half of the ad revenues. That leaves a couple hundred thousand dollars to cover distribution, use of production facilities, equipment, travel, music and general business expenses. It’s no wonder that Serial has to ask for donations.
Serial is part of a nonprofit enterprise, but nevertheless illustrates the potential expenses of a high-quality, widely distributed podcast. There are several successful for-profit podcasts, including Entrepreneur on Fire, which reported net monthly income during 2014 in the high $100,000 range; in November it reported making $218,621.50, nearly as high as the July net of $241,587.74. So it is possible to make money, largely through advertising and sale of related products.
Given that there are some 115,000 English-language podcasts; however, those that are actually self-sustaining businesses are in the minority.
Related Article: 9 Brilliant Podcasts for Aspiring Entrepreneurs
Podcasts that primarily promote your business, on the other hand, can be a relatively inexpensive way to communicate with customers and stimulate sales. It’s a matter of scale—you’re not looking to be a full-fledged broadcast (with the associated costs), but rather a targeted marketing message. Consequently, both production and distribution costs are significantly lower.
How much lower? For example: the podcast Side Hustle Nation does it on a budget that any business can afford.
Almost all computers these days come in with a built in microphone, but you could upgrade for better sound quality with a microphone in the $50 to $200 range. There’s a variety of free podcast production software, and even the “professional” packages don’t cost more than $30. You probably don’t have a professional voiceover artist, though you could hire one on Voice123 for not more than a couple hundred dollars if you or one of your employees doesn’t have “stage presence.”
Since you’re targeting a narrow audience, you most likely have enough space on your own website to host your podcast. But there are podcast hosting sites that cost as little $5 a month. Bottom line: you could probably do a podcast for as little as $100 a month, which seems to be a more than reasonable budget to advertise your products and services in a format that is growing in popularity.