Nov

14

Podcast Economics

November 14, 2005 |

The Work Better Weblog features some provocative thoughts on the economics of podcasting . The assumption that underlies the post is that theaverage podcast has about 1000 listeners right now - notenough to attract sponsors.

Let’s say we’d like to gross $40,000 for the year (a fair amount for doing only one show a week).

Adding all this up puts your annual costs at $42,940.

For the sake of easy math, let’s say you have 1,000 listeners - the circulation of a small town Nebraskan newspaper like the Bayard Transcript. Frankly, the worldwide audience for a Klingon version of the Bible is probably a thousand.

Dividing the annual cost ($42,940) by the number of listeners (1,000) and the number of shows (52) makes the cost per listener: $0.8258

That’s less than a $1 per show per listener (iTunes - 99 cents, WalMart - 88 cents, coincidence?). One Dollar. $4 a month. $42.94 a year. Kris over at the Croncast settled on nearly the same numbers.

With numbers as small as these, I don’t see advertisers beating down the doors of podcasters. In the broadcast world, millions of dollars are sunk into spectrum, hardware, and talent. This gives advertisers the upper hand.

I am not sure I can agree here. The 1000 audience members are probably a highly specialized species of listener. Think about what kind of a premium people pay to get to the right people with a Google AdWords campaign. If I make a book recommendation to my 1000 listeners - maybe I can get a hundred people to go out and buy the book. With a print ad that reaches 100.000 people, you might not get any better numbers either.

Okay, I admit - the numbers are a bit of speculation. I will try this as an experiment on my podcast next week - lets see what happens. I will report about it here, of course.

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