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building an indie business in the center of venture capital. I am Alex Edmonds, also known as supremerumham on the internet. And this is the building and indie business podcast. Okay, so today, we're gonna be talking about how to podcasts make money. So I'm going to be talking about sponsorships, affiliate links, products, the listeners pay model, how podcast players pay, um, some podcasts. I have my own opinions about it, and a conclusion of course. Okay. So let's get into it. Sponsorships. So what is a sponsorship? A sponsorship is a company paying a podcast to promote their product on air. There's three options for when a par, and that can be played in its pre roll, mid roll and post roll. And that's before the podcast content starts and the middle of the podcast content. And at the end of the podcast, and on an ad can be 15 seconds, 30 seconds, and 60 seconds. And the reason why I bring all this up is because the amount of money someone gets for the ad depends on when the ad is played. How long it is. How many monthly downloads that person as so like the reach they have? So yeah. With a podcast sponsorship, a podcast host is able to monetize their whole audience. Okay, so let's get into affiliate links. affiliate links, it's this type of sponsorship, but I feel like it's important enough to have its own section. So yeah, so an affiliate link is when a sponsor or a company will give the podcast their own special link to a product. So when you click on that link, you'll be clicking on like open slash bi B. And that way, the company knows who has how many clicks has been brought in by the podcast. And when someone purchases something with that affiliate link, the podcast will get a cut of the sale. Right? So I'm a podcast can use an affiliate service, where I'm the podcast is able to choose what product they want to promote. Or they can use an e commerce store, which is the same thing, but more wider variety of products that they're able to become an affiliate for. Right. So if it podcast is able to choose their own product, they should choose something of value to the audience. So for example, I wouldn't choose a pizza oven as an affiliate link. To promote to my audience, I would choose a buck or something like that. As well with affiliate links, you're monetizing a fraction of your audience because there are only so many people that would want to buy that book. Right? Not every person in the audience will want to buy it. Okay. Speaking of books, I'm a podcast host can monetize by selling a product or service. And selling a product or service on their own allows them to remain independent, and comes with a bunch of things that a sponsorship or any of the other models can't provide like remaining independent. So with the sponsorship the sponsor might have a problem with the content You provide safe you swear something like that? So when you're you're selling your own products, you could, there's no restrictions to what you can say, because it's your own stuff. So the types of products that someone can sell or podcast can sell are any book, a course or service? Yes. And with the option, the three options, someone can choose their own profit margin because they know the expenses. And they can set the price to offset those expenses. So if I'm spending, if I want an 80% margin, and I know that it caught my expenses are going to be 20%. Right? Then I could just make my product $10 and get that 80% margin. Right. It's not an immediate option for monetization, unlike affiliate links, because I have to create the product, right? So I wrote a book for B, IB. And, um, that took me four months. And also, it took me almost a year to come up with the idea to write a book. So it wasn't immediate, I had to create it. And the products can be sold on two different platforms. There's a DIY ecommerce store that you can set up. And that will, it won't get you it'll be cheaper, right. But on the other option is like a selling platform where people will be searching for products and your product will come up. And so more people might buy it. But your profit margin is a little lower because they take their own cut. So yeah. Okay. The next model is listeners pay. And what this means is you can have donations, or private podcast. So for donations, you set up like a donation, what you join and donation website. And you ask people to donate money, you might need to provide some extra value or an extra content for the donors, something like a behind the scenes look at how the podcast gets made. The donations can be set up before the first podcast so that way, as soon as you start the podcast, people have the option to donate money to the podcast if they really enjoy it. And private podcast with the way I see private podcasts is you need to have your own audience already to have a private podcast and have people listen to it. Because if you have a private podcast from the first episode, and it's your first podcast, or first way to build an audience, then no one's gonna listen to it. So I think that a private podcast is for your audience from somewhere else. Like if you have a newsletter or community. They they're already giving you money. So you might have a private podcast just for them. There's also some podcast players, that will give the option of having a paywall, and they take a cut of how much how much money is made with the paywall. So if you have each episode is $2 they might take 10% of that for every person that buys the episode. So yeah. All right. So podcast players, some podcast players will give a host money for every download that the podcast gets. And this is very rare. Um, it's like a fraction of a penny, and not every player does it. Um, so my opinion, I'm going to talk about that right now. Um, so Apple set the standard of not paying podcast hosts, and I think everyone else just follows this. Um, they pay musicians, right. So I don't understand why they don't pay podcast hosts, um, podcast, players may can share audio content, so I don't understand why they don't pay podcast hosts. Like I've produced more content than Taylor Swift this year. In her entire career, I produce more content this year alone. And so I know I don't have the, the selling power of Taylor Swift. But more people, Blake, like a single person that listens to my podcasts and my podcast alone. Or just my podcasts, right? One of my subscribers, as gives Apple podcasts or Apple? In general, they give Apple more traffic than Taylor Swift or more downloads and Taylor Swift because they download it once. Right? So I don't understand why. I don't get paid for my podcasts from Apple, but Taylor Swift does. It doesn't make sense. Um, yeah, I think what should happen is that podcast hosts, or just people who create audio content in general, and Apple, or any podcast player, I'm just, I'm just saying Apple for now, I'm sure to enter a revenue share agreement. And the ads that get played, like before, after podcast should get shared with the podcast hosts. I mean, it could be like one or 2%, right? And, like, Apple will be able to play at like, charge more Fernand based on popularity. So let's say I get 100 downloads for on my each episode, right? And then they charge like $10 per ad. And so if I get one or 2%, that's not a lot of money. So let's say my podcast grows, I get 10,000 downloads per episode. And now Apple has a lot of opportunity to make money. And let's say they charge $100 per ad. So my revenue grows with my growth as well. So I go from like 10 cents per ad to one to $2. Right. That's really good. Because, yeah. So Apple really has no downside of doing that with podcast hosts. Right? Cuz they make more money. If the more popular a podcast is. And if a podcast isn't popular, then they don't lose any money. All right. All right. So in conclusion, arm, the ecosystem for podcast hosts to monetize, their podcast is underdeveloped. There's room for growth with with a podcast player that focuses on monetization. Because there's a lot of people that start podcasts, and they want to monetize. So if they know one platform focuses on this, they'll promote their podcasts on that podcast player. Right. Um, the problem with this is that new podcast player will get crushed if a current podcast player just adds this feature, right? Um, me personally, I've made less than $100 from my podcast. It takes time to monetize an audience. But there are more listeners to podcasts coming every year. I'm more listeners will lead to more opportunity to monetize a podcast. Um, and yeah, okay. Thank you for listening. Have a nice day. Bye.