How do podcasts make money, and when to start monetizing yours

‍

So, the burning question remains: how exactly do podcasts make money? Right now, there are several solid options that will continue to evolve, with even more yet to emerge. Discover some of the best monetization tools and methods available to creators currently and at what point it makes sense to pursue each one.

‍

But first: Refine your show and grow your initial following

Before you attempt to make it rain, make sure your podcast has a strong foundation. Focus on streamlining your production, elevating your content, and building your podcast community enough to set yourself up for successful monetization.  

‍

A great place to start is to establish your niche and podcast target audience. Lean into what makes your show special and unique. Initiate conversations with your current audience to find out what they like about your show and what they want to hear more of or future topics they want to hear covered. These steps will not only help grow your existing audience but also provide ideas for new episodes.

‍

Speaking of new episodes, maintaining a consistent podcast schedule is key to keeping and growing listeners and the overall longevity of your show. Plan ahead, find a routine that works, and plot all your tasks to be done to build a sustainable and manageable production system that will keep you sane and your listeners coming back for more.

‍

How do podcasts make money? The top three methods for monetization

When you’ve laid the foundation for regular, high-quality content, it’s time to think about how to make some money from your podcast. There’s a variety of tools that creators can take advantage of to start earning depending on the type of creator, content, and audience they’ve cultivated.  

‍

1. Ads

Ads are a scalable way to start earning money for your podcast. Creators can source their own ad deals by securing host-read sponsorships for their episodes or use existing ad programs that their podcast host might offer.

‍

The Spotify Partner Program offers multiple ways for creators on Spotify for Creators to monetize, with ads being one of them. When creators are admitted to the program, advertisers create ads that can automatically be inserted in the ad breaks creators designate within their episodes. Creators who publish video may also be eligible for another revenue stream where they instead earn based on how much certain users stream their content. 

‍

Whether you source your own host-read sponsorships or work with a host’s ads program, this will be an attractive monetization channel that enables easy access to notable brands and organizations and allows creators to monetize at scale.

‍

2. Subscriptions

For creators who have cultivated a loyal, engaged audience, podcast subscriptions are an option that can be an alternative to or a complement for ads. Some creators find success using both ads and podcast subscriptions because ad-free episodes are one type of bonus content you can offer.

‍

Creators can start using podcast subscriptions through Spotify for Creators once they have at least 100 unique Spotify listeners in the last 60 days and at least two episodes published. Total listeners are only one part of the story when it comes to evaluating if you are ready for podcast subscriptions: you also need a loyal and engaged audience who is willing to pay for bonus content. A good rule of thumb is that if a large portion of those listeners are consistently connecting and interacting with your show, that’s a good signal to start considering a podcast subscription. 

‍

A Spotify marketing lead says, “Once your audience gets a bit bigger, if they happen to be very loyal and engaged, you should consider setting up a podcast subscription. This can be a much more effective way for creators with audiences in the hundreds or thousands to make money compared to ads, or at the very least is an excellent complement to ads.”

‍

Subscriptions are not only a monetization tool, but also a way for you to strengthen your podcast community by offering exclusive content like extended episodes and bonus episodes that you make just for subscribers. If you have a primarily audio podcast, that bonus content might be video podcast episodes, or maybe you’d rather publish exclusive content like Ask Me Anything episodes using questions submitted through Spotify’s comments feature. With Spotify for Creators, you’ll  also get access to email addresses of subscribers who opt in to share that information, paving the way for more exclusives like email newsletters. 

‍

Regardless of what type of content you choose to use for your subscription, it’s a monetization channel that also offers a unique community building opportunity.

‍

3. Selling merch

If there’s one thing that superfans love, it’s merch. When listeners buy merch, it really shows their love and support if they like your podcast so much that they’re willing to wear the logo on their bodies or attach it to their belongings. Technically, you can start selling these branded products anytime, but you should probably wait until you have enough dedicated fans to justify the cost and, ideally, make a profit.

‍

Once you are ready to offer merch to your audience, the possibilities are vast. You could make t-shirts, stickers, patches, coffee mugs, hats, and whatever else you can dream up. To get your audience engaged and make them part of the process, you could ask what kind of items they would want in a poll. You can even go a step further and launch a merch design contest to pick a fan-made design for one or multiple items.  

‍

Find the right mix of channels that work best for your podcast

Some of the ways podcasts make money will be more effective than others, depending on your audience. It might take trial and error to find what produces the best ROI, and that might mean leveraging several different channels at once.

‍

“Because each podcast has a different audience, as well as different goals, it makes sense to optimize your mix of monetization methods,” the Product Marketing Lead advises. There is no limit to how many ways you monetize, so you can try out multiple options and monitor your earnings from each. If you want to go the low-maintenance route, you can also just stick to whatever is easiest. “Some creators are happier saving time and adding some ads, then letting it run in the background—that's perfectly fine, too.”

‍

Regardless of which monetization mix is right for your show, Spotify for Creators has the tools to support your journey and help you turn your show into a sustainable business.