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Four-Digit Audiences in Radio and Podcasting

In our first round of interviews, our team is focusing on podcasters that might be characterized as being in the top tenth or twentieth of American podcasting in terms of content produced and consumed.  The modal podcast series is one that only runs for a few episodes, and is only heard by the content creators’ personal contacts and a couple happenstance organic hits from Google.  Only a small proportion of series run over years, and produce content that is consumed by audiences that are measured on a scale of tens or hundreds of thousands. 

In a world that obsesses over entertainment or political stars with millions of followers, people are quick to dismiss the importance of the middle-tier content producer.  An audience in the thousands is not nothing.  In the 1990s, I worked at a commercial radio station that — at most parts of the day — would attract an audience in the thousands.  Offhand, I would guess that my station sustained about seven or eight full-time jobs, and maybe ten part-time ones. We hired advertising salespeople, techs, janitors, programmers, and of course producer/performers.  We were considered a major media outlet in our small Northern town, and City Hall and our Members of Parliament took us seriously. 

I have interests in personal finance (download my book), and was interested in the personal finances of podcasting.  How did the business of a podcaster with a four-digit audience compare to those who lived off the revenues generated by my old radio station? My first impression was that virtually no one was making money off podcasting.  Even at this nearly top tier of the market, these were mostly one-person operations, most of which could at best be characterized as a sub-minimum wage part-time job.  That’s assuming the podcast doesn’t cost its creator money to produce.    Even near the very top of the podcasting market, there does not seem to be a lot of money being made.

The traditional economic trade-off that sustained my old station — money to expose a message to our four-digit audience — seemed unable to sustain much in the way of economic activity.  It is a prevalent joke among podcasters that no one makes money off advertising.  Given the social balkanization of podcasters, it seems to have been generated by widespread, independent observation.  My initial impression is that advertising prices are very low.  While I have not yet examined the topic, I would wager that the cost of reaching one-thousand podcast listeners is far, far lower than it was to reach a similar number of comparable listeners in the 1990s.  Moreover, many advertising arrangements don’t even pay by audience exposure (e.g., number of listeners), but rather pay of clicks or sales.  Our subjects generally viewed the profit potential of advertising with skepticism.

From this vantage point, podcasting seems to be living in the rubble of what was once a gainful audio broadcast industry.  It represents the dark side of rock-bottom broadcasting costs and an explosion of audio content.  Advertisers aren’t paying to advertise on podcasts, and there aren’t a lot of entrepreneurs who seem to make audio content production their primary job, let alone hire someone else to do it.  This undoubtedly represents the demise of an old business model, but that doesn’t mean that podcasting isn’t creating jobs or that people aren’t making money off podcasting.  Instead, I see it as a reorganization of audio broadcasting, and this reorganization alters flows of money and people’s ability to make podcasting part of their livelihood.

First, there are several mismatches when comparing radio stations and podcasters in terms of productive work performed.  For example, most of the podcasts we have studied generally produce between one hour per week to one hour per month of content.  Radio stations generally broadcast between 16 to 24 hours per day.  So your favorite one-hour weekly podcast is probably equivalent to 0.5% of a radio station’s weekly programming. Moreover, given that there is no broadcast tower or office to maintain with a podcast, your favorite podcaster is only playing a limited number of roles that were being played at the radio station.  They might have played programmer, producer, and performer for that hour.  Many of our podcasters did not dedicate time to sales, and they generally outsourced technical support. The work is done by people who work for companies that perform tasks that were not performed thirty years ago — web programming, social media management, web hosting, program transcription, art licensing, etc.  At that pace of output, it might make sense that podcasters’ per episode profit might not be too far off what an producer/announcer at my station made for an hour of programming: about $10.  Or basically not much.

Second, creators revenue streams aren’t reliant on their work over a single medium.  Yesteryear’s radio station would generally employ multiple people to ensure a steady stream of audio programming around the clock.  Multiple creators would work to sustain a single medium.  Today, the situation is reversed.  Many of our content creators have a portfolio of work that is done across different media or lines of business.  So the podcaster produces podcasts, but might make money off of merchandise, live events, consulting or commercial services, or other products associated with the podcast.   Here, the podcast program is part of a broader portfolio. Some podcasters have found a way to embed their podcasting activity in the marketing operations of a larger enterprise as content marketers or public communications specialists. 

So podcasting represents a reorganization of audio broadcasting.  It is not producing something whose economic effects are as clear and obvious as they would be were there to exist a podcast station that housed and hired content creators for a local geographic community.  It’s spread out, fragmented, and blended up with other economic activities. 

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