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Welcome to Chapter 2 in our 9-part Subscription Guide. (If you missed it, our previous chapter was Chapter 1: Podcast Subscription Is Hot & Getting Hotter: Now’s the Time to Jump In.)
The podcast subscription market is sizzling right now. Forty percent of US consumers have directly paid a creator, and creator income is rising.
But is a subscription program right for your podcast? And how much could you realistically expect to make if you launched one?
Below, our calculator helps you gauge how much recurring podcast income you might bring in based on your existing show numbers. We also explore how to think about podcast income against return on investment.
The 3 variables of subscription podcast income
As with any question about income potential, the answer to how much you can make is always a big “it depends.” With podcast subscription income, there are three main things it depends on:
1/ The size of your audience
For the best idea of your podcast audience size, look at the number of downloads you get per episode in the first 30 days of the episode’s release. If you can filter the data to unique downloads, even better. Some podcast hosts provide this number.
2/ Your conversion rate
Your conversion rate reflects how well you can convert free listeners to paid subscribers.
Most podcasts can expect a conversion rate between 2% and 7%.
Where you fall in that range is influenced by how engaged your audience is. Avid fans who are interacting with you and may already be asking for more content will land you at the higher end of the scale.
3/ The price of your plans
Obviously, your plan price matters greatly. It’s going to take a long time to reach sustainable income at $1 or $2 per month per subscriber.
Plans in the range of $5 to $15/month are the most common but we’ve also seen podcasters succeed with plans of $50, $100, or even $250/month.
Almost everyone struggles with asking for more money but focus on the value you’re delivering and don’t be afraid to charge what you’re worth.
Estimating your subscription podcast income
Now that we know the three numbers we’re working with, a rough calculation of how much your podcast might earn with a subscription program is pretty easy:
Audience size x conversion rate x plan price = potential income
For example, let’s say you have an audience of 5,000 free listeners. You pick a 4% conversion rate because it’s right in the middle of the typical 2 - 7% range. And you think you’ll price your initial plan at $10 per month. Your calculation would look like this:
5,000 x 4% x $10 = $2,000
In this estimate, you’d be making $2,000 per month from podcast subscriptions. Not too shabby—and it comes to you reliably every month.
Use our handy podcast income calculator below to play around with the variables and see how changes impact your potential income. What happens if you bump your conversion rate from 4% to 5%? What if you charged $7 instead of $10?
When should you add podcast subscription income?
Compared to advertising, where sponsors typically want to see audience numbers in the tens of thousands before they commit, you can get started with a subscription program much sooner in your show’s growth.
That said, if your audience is very small, it’s probably not the right time to offer a subscription program.
What’s too small? It varies depending on your topic, audience engagement, and income goals, but a good rule of thumb is to have at least 5,000 unique listeners per episode before you look at adding subscription.
Working backwards from your income goal
Having 5,000 listeners is a really good general milestone for adding subscription—but of course, depending on your goals, your milestone could be different.
Try starting with your desired monthly subscription income. Now work backwards with your three variables to figure out how big your audience would need to be to get you to your goal.
For example, let’s say you’d be really happy with $500 per month in revenue. And let’s assume you’d be charging $6 per month for your plan.
$500 / $6 = 83
You’d need approximately 83 monthly subscribers to reach your income goal.
Now let’s work backwards further to find out how big the free audience needs to be to get those 83 subscribers. We’ll assume a conversion rate from free to paid of 4%.
83 / .04 = 2,075
You’d need around 2,075 free listeners for each episode to reach your desired income goal of $500 from subscription.
And here’s where you want to start thinking about return on investment.
Consider your return on investment (ROI)
Creating premium content for 5 subscribers takes the same amount of time and effort as creating premium content for 500 or 5,000 subscribers. As your paying audience grows, your return on the time and effort you invest in delivering your paid program scales exponentially.
Conversely, the smaller your paying audience, the smaller your ROI on the time invested.
So can you start early and bring in some revenue from a small number of subscribers while you grow your free show and your paid subscriber base at the same time? Absolutely you can.
But we’ve found it’s much faster and more efficient to funnel 100% of your energy into growing your free audience with the best show you can make. Pour everything you’ve got into that.
Then, when you’ve got momentum on your side and you’ve got your base to at least 5,000 listeners—or whatever your reverse calculations tell you is your goal— you can launch the subscription program and grow from there.
Use low-lift perks to optimize podcast ROI
One more thing to note when it comes to understanding your ROI: Many people believe that running a podcast subscription program is time-consuming and onerous. The truth is, it can be—but it doesn’t have to be.
It’s all about being smart with what you offer, and finding a balance between what your listeners want and what you can reasonably produce.
There are many kinds of bonus content you can offer that don’t cost much or require a lot of time to produce but still add tons of value for a supporter. Be sure you include some of those low-lift extras to optimize your ROI, especially if you plan to start your subscription program with a smaller audience.
Want to know what your audience would pay for? Read what’s next in our Subscription Guide with Chapter 3: How to Know What Your Podcast Audience Really Wants