Why Paid Memberships Are the Best Way to Make Money With a Podcast
It’s easy for podcasters to make more from their audience than they’d ever make from ads.
Podcasting hasn’t changed much since it was created, but podcast monetization has. It takes 30 seconds to see why:
Serial made about $500,000 in yearly ad revenue with over 250,000,000 listeners (i.e. $0.002/listener). Chapo Trap House, a podcast with less 1% of Serial’s audience, makes about $2,000,000 in annual revenue from its paid membership (i.e. more than $1/listener).
How does Chapo Trap House manage to make hundreds of times per listener than Serial, the most popular podcast America’s ever made? They make a podcast episode each week.
How much money you make with a paid membership depends on:
- How big your audience is.
- How engaged your audience is.
- How much you charge for your paid membership.
- How much you invest in making your paid membership’s premium content.
If you have an engaged audience, you can expect more of them to convert into paid subscribers. If your premium content is valuable to this audience, paid subscribers will pay more for it.
Information from Supercast and Graphetron reveals that:
- Between 2-7% of an audience will become paid subscribers if given a premium option
- Paid subscribers typically average $2-10 month.
These projects are in addition to ads, merchandise, and other revenue sources your podcast may have.
Ads aren’t the only way to get paid to podcast, nor are they the best way: it takes a lot of time to solicit advertisers, audiences often find them distracting, and it’s not a predictable way to generate revenue. Maybe you don’t like doing ads (or maybe they’re not appropriate for your show).
The paid membership model solves all these challenges: revenue is predictable, recurring, and supports production. And it results in a better podcast by aligning your show’s interests with the interests of your most dedicated fans.
Within a week of launching a paid membership on Supercast, FoundMyFitness doubled its monthly revenue. Subscription revenue is almost always higher than advertising revenue—but there’s no reason most podcasts can’t pursue both. In fact, an ad-free version of your show is one of the many ways you can create a paid membership for subscribers who want to pay you.
This model aligns you and your show’s interests with the interests of your most dedicated listeners.
- Your show’s most dedicated fans want to support you. They want to give you money to support additional content. It makes them feel good and they get value from what you’re creating.
- It's easy to setup. All you need is a few hours. the right tools, and some premium content.
- It’s more money and more predictable than ads, but you can still do ads and collect ad revenue. (And offering an ad-free version of your show is a big benefit to paid members.)
You can set up a paid membership in about three hours. Your only additional time commitment is figuring out the premium content. (And here’s a complete list of premium content that your podcast can use to create a paid membership.)
All you need to do is offer something your audience will find valuable. Most content that supports a paid membership can be created at the same time as a typical podcast episode.