I’ve been thinking about how to make money from podcasting. Looks like I am not alone: Wharton , Weblogsinc , (recently acquired by AOL), Forbes , First Monday. Podcasting is part of the Web 2.0 Do It Yourself (DIY) participatory culture. There is incredible hype , noise , traffic and money around building Web 2.0 companies. But I am still left asking how do people pay for all of the bandwidth when their podcast becomes popular.
The Forbes article lists 4 ways to make money from podcasting:
- Embedding advertising in the audio itself. Basically, this uses the traditional model of radio.
- Free and premium channels. This is how many content sites make money. There may even be subscription services, kind of like a magazine.
- An enterprise model. This would mean selling sophisticated products to major customers that would have special features, such as security.
- Advertising, which is currently the predominant approach.
Crofts et al., 2005 expand the potential business models:
- Sponsorships – a “throwback to the golden age of radio”
- Advertising – both on the pages/feeds that distribute podcasts as well as embedded in the podcast
- Listener donations – a tip jar, you like the content you make a donation
- Cooption – basically existing broadcasters make their existing content available (CBC does this among others).
- (Paid) Subscription model for aggregators
- (Paid) Subscription model for individual podcasters
- Infomercials – self-advertising, product demos and customer testimonals
Direct or indirect. It is still a question about where does your revenue come from. Who is doing what and where do they fit in?
Many companies and individuals are working the content subscription model. Kottke is trying. John Gruber of DaringFireball is trying. Big media is finding online subscriptions profitable too. Rush Limbaugh is providing a subscription to his podcasts.
Advertising and Sponsorship and Infomercials
Sponsorship and advertising is an easy model. Adwords, Amazon Associates, etc., we’re all looking for ways to augment our revenue streams through advertising. Creating sponsored podcasts or infomercials are just the next step from embedding radio like advertisements in a podcast. I am not an advertising guy, but I would assume that similar metrics for reach, conversion, etc. will apply.
Develop a podcasting tool/service
Build a consumer tool to allow users to publish micro-content podcasts. It has to be low cost, and with the hope of being acquired. The bandwidth question of hosting and distributing large amounts of data could kill this idea. So there may be a need to build a tool that allows users to easily install on their server for hosting. The idea is that you could build a product similar to MoveableType or pMachine (for blogging) but for podcasting. There is a fare amount of competition in this market space: AudioBlog , LastFM from AudioScrobbler , GarageBand , LoudBlog .
There are obviously missing technology pieces, like transcription thought Enablr is a stepping stone on the road to full automated transcription and search tools (check out del.icio.us tag:transcription ). But there are big names looking for solutions from transcription, content analysis, metadata, tagging, etc.
Other potential services could be to license audio content or sounds for others to use in their podcasts. This is just building on a mashup of the music industry and stock photo industry. I don’t know how to do this one, but like stock photo/art there is going to be a market for sounds and music. Much of this exists for the music industry. Basically become the GettyOne for sound. Just check out Yahoo Directory or Google Directory and there are a large number of providers of sound effects and audio loops. One of these companies could jump on the Web2.0 bandwagon with a slick AJAX interface to their existing database. There are bound to be a whole lot of interesting IA issues about classifying, categorizing, organizing and accessing audio content.
The broadcast model could be an interesting model. Companies like Odeo , Yahoo , Apple could become the channel for distributing the content and collecting advertising dollars. Evan Willams has been about providing people tools to publish content to the web , and Odeo is a publishing and aggregation tool. It combines 3 of the models: content subscriptions, advertising and software tools. Listeners, Advertisers, and Publishers, bring everyone together in a single community. I wonder if distribution deals like Apple and Disney will be more common. The question becomes how valuable is mainstream content versus the DIY content of smaller broadcasters.