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Searching For The Pod Of Gold

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DQI Bureau
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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.

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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.

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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.

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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.

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By Heather Green

Podcasters' Playbook

Both startups and corporate giants are exploring the technology's potential

as a money magnet:

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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.

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