The buzz that built up around podcasting after its debut a year ago wasn't
about money. The technology allowed anyone to create a radio show about pretty
much anything, from German board games to vegan cooking. And to the early
purists, talk of profits was nothing less than heresy.
Not anymore. Today, all are hard at work trying to make podcasting pay. They're
experimenting with advertisements, subscriptions, even with on-air personalities
talk up certain products, like in the early days of radio. The latest sign of
commercialization? Adam Curry, a pioneer, is launching a podcast network, with
30 to 50 shows that will split ad revenues. The concept won Curry a $9.8 mn
investment from Kleiner Perkins Caufield & Byers and Sequoia Capital, two
top venture firms in Silicon Valley.
Mavericks such as Curry don't have podcasting all to themselves anymore.
Traditional media companies, including CBS, Clear Channel Communications, and
Walt Disney, are lining up their podcasts right next to those from indies. Tech
giants America Online, Apple Computer, and Yahoo! are rushing in with
aggregation services that collect thousands of podcasts in one place, laying the
foundation for selling shows and ads. iTunes offers 15,000 podcasts, and
listeners have signed up for 7 million subscriptions.
Some models are emerging. Many podcasters are turning to 15- or 30-second
sponsored audio ads at the beginning of the podcast. The popular podcasts
usually set flat rates ranging from a few thousand dollars a month to as much as
$45,000. In February, Volvo agreed to pay $60,000 for a six-month sponsorship of
the monthly podcast of Weblog's Autoblog, as well as advertising on the site
itself. Over that period, the show was downloaded 150,000 times.
As number of listeners is changing fast, a flat-rate sponsorship can be a
bargain or a bust. KCRW, the public radio station in Santa Monica, cut a deal
with Southern California Lexus Dealers for a sponsorship this summer, when the
station was getting 20,000 downloads a week. Since then the number spiked to
100,000. When the Lexus deal ends, KCRW plans to charge $25 per thousand
listeners. "Once we get out of this sweetheart deal, our goal is to cast
our net as wide as possible," says Jacki K Weber, KCRW's development
director.
The $25 per thousand listeners is pretty lofty, considering a New York City
morning radio show charges between $12 and $15.
Why the premium for some podcasts? They help advertisers reach specific
groups, even as media fragments. "You have to think of this more as
investing," says Mark Kvamme, a partner at Sequoia. That's one reason
Sequoia's Kvamme thinks podcasting could siphon $1 bn to $2 bn away from the
$30 bn radio advertising market in three to five years.
Podcasters are experimenting with ways of pulling in money without
advertising. This Week In Tech, an indie podcast with over 200,000 listeners,
asks for $2 donations per month and rakes in around $10,000 a month. Others
think listeners will pay a subscription fee.
Curry is pushing the limits for indies. His troupe of podcasters plan to
offer advertisers a host of possibilities, including spots where a podcaster
tries out a product and podcasts devoted entirely to a product or service.
Gretchen Vogelzang and Paige Heninger, the Virginia women behind the show
Mommycast in Curry's network, will promote a new toy from Hasbro, iDog, on
each episode.
Still, for all the energy some podcasters are pouring into making money, they
will be dwarfed by the thousands who aren't pursuing riches. For them, the
original allure of podcasting remains: creating their own show, even if only for
a few close friends.
By Heather Green
Podcasters' Playbook
Both startups and corporate giants are exploring the technology's potential
as a money magnet:
Get Sponsorships
Most podcasters are mimicking TV's early model by getting sponsors to pay
for the content so listeners get shows or free. Monthly prices range from a few
thousand dollars to $45,000. GrapeRadio, a weekly indie wine show, with 10,000
listeners, gets $3,200 monthly.
Pay For Listeners
As metrics become more dependable, some podcasters, including CBS and public
radio station KCRW, plan to move to the radio model of charging for every
thousand listeners. When a current sponsorship ends, KCRW plans to charge $25
per thousand listeners.
Sell Subscriptions
Sports-training podcast EnduranceRadio and wireless service Melodeo are
exploring subscriptions and pay-per-play podcasts. TWIT, a tech podcast with
over 200,000 listeners, makes $10,000 a month through $2 monthly and $20 yearly
donations.