Premium Podcast Models
As of late many podcasts have been including advertisements on their free podcasts. While I have no problem with it, some do, and too bad, it's a way to make money. I have to applaud them for being able to get advertisers. Having advertisers like Visa, Becks, and others invest in podcasts begins to show the legitimate nature of the medium and also allows the medium to still be viable. But that is not the only way to bring revenue to a podcast.
On the September 24th, 2008 show of This week in Media from Pixelcorps.tv, the hosts had stated that people are not willing to pay for podcasts. I have to disagree. I myself pay for Ken Ray's Mac OS Ken Day 6. Mac OS Ken runs five days a week (typically), Monday through Friday, for free, only with some ads. The cost for Day 6 is $10 a month for one additional weekly show, and eventually even more content throughout the week. The Day 6 shows are provided via RSS, which can import into any RSS aggregator. I would be willing to pay for more podcasts that would offer this type of model.
Most would ask "Why pay for it when they are free." Well, it's quite simple. I follow the thought that "you get what you pay for". When you do not pay for a show you cannot really complain if the host or hosts end up missing a show once or twice a month, you’re not paying for the show. Additionally, paying $10 a month for exclusive content, which hasn't disappointed me yet, is well worth it. Moreover, supporting a podcaster whose work you truly enjoy is something I think everybody should do. Don’t forget, premium podcasts normally do not have ads in them, which can be compelling to some.
I did contact Ken Ray directly via Twitter to inquire about Day 6 in regards to number of listeners and got a response which included "the conversion rate to paid listeners is between 3% and 5%." Ken did not give me exact numbers, just the conversion rate. This is perfectly good information for what I want to convey. I don't really need exact numbers anyway.
Let's take a look at this figure, we'll use the low figure of 3%. Let's say you do charge $10 a month for a premium companion podcast to a free one. If your "free" podcast had 1000 listeners and we take 3% of 1000, you're talking 30 listeners. 30 listeners who pay for a podcast will net about $300 a month. That's not too shabby considering that you already have the equipment and there will probably be only a slight investment initially. That totals to approximately $3600 more per year, in addition to whatever advertising revenue is generated from the free podcast. While most will probably make more from advertising than premium, it is a revenue stream.
Additionally, I also give a donation to TWiT.tv every month. It's a total of $12 a month in donations to the network. Again, I do this because I think supporting the podcasters is a good way to help the entire podcasting community. I know shows like TWiT consistently have 100,000 listeners. If even 1% paid for a premium show, that’s 1,000 listeners at $10 a month, or another $10,000 a month. Granted, TWiT.tv is not the best example since Leo does have a staff, while most podcasters are only one or two people hosting and producing the show. I myself would be willing to pay for a feed of TWiT.tv live streams, since I cannot watch when they are on, which is throughout the day.
I believe as though this is a sustainable model, perhaps with a bit more buy in from listeners or viewers. While I would like to see more of a 10% free to premium ratio, 5% is not too shabby given the lifespan of the medium. I would also like to see more podcasters do this type of model. Having a subscription model will not work that well. Providing premium content at a cost, while still providing a free version is what consumers are willing to tolerate.
The premium model has worked quite well in all other types of mediums, including DVD sales, games (whether they are console or PC). Consumers seem to be willing to pay for premium content as long as it’s compelling content.
Please keep in mind, I do not have a podcast myself, although I’ve thought about doing one, so I'm basically a pure consumer, not a producer/consumer like so many in the industry. I may be a minority, but remember, I’m the minority that is that 3 to 5% that is willing to pay for premium content, as long as it’s worthwhile and compelling.