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

October 4, 2022
How can creators monetize their podcast with Spotify for Podcasters tools and when should they start? We’ve got the answers.

Podcast monetization is a relatively new development—but it’s quickly gaining momentum. Making money from your podcast is no longer a pipe dream for creators. If you’re dedicated to quality, consistency, and building up the audience for your podcast, you already have a head start.

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.

The rapid growth of the Spotify Audience Network (SPAN) and the number of advertisers leveraging it is a strong indicator of the burgeoning podcast monetization market. Since its launch in April 2021, the number of advertisers and podcasts within the advertising marketplace has significantly increased. Some prominent Spotify for Podcasters creators are among those accessible in SPAN.

But podcast ads are just one way that creators can make their hobby, passion project, or side-hustle lucrative. If you’re new to podcast monetization, as many creators are, when and how to do it can be unclear.

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 is primed for a downfall. 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 five 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. If you hit your groove early, there’s no reason not to go ahead and start straight away, as a Product Marketing Lead at Spotify, points out.

“People seem to have a perception that you need thousands of listeners, if not more, to get started with monetization, but that's simply not true. Once you start making your podcast, focus on making your content really good, and keep optimizing so you get to that first 50-listener mark,” she says.

1. Ambassador Ads

Anchor’s Ambassador ads are an ads offering, exclusively available for creators who host their podcast with Spotify for Podcasters, that allow you to start monetizing with ads early in your podcasting journey. If you’re a creator who within the last 60 days have published one episode and had at least 100 unique listeners on Spotify, you can record your own host-read ad promoting Spotify for Podcasters as your podcast hosting and creation platform. These ads are performance-based, so the more engagement your podcast receives, the more revenue you stand to earn from them. This is a useful way to test the monetization waters and see how it evolves proportionally with your podcast.

2. Podcast Subscriptions

Another monetization method to try after or in addition to Ambassador Ads are podcast subscriptions. Launching a podcast subscription is also a nice complement to Ambassador Aads because ad-free episodes are one type of bonus content you can offer.

While there is no minimum listenership to set up a subscription, you’ll get the best results once you surpass the 100-listener milestone. If a large portion of those listeners are 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 than through ads, or at the very least an excellent complement to ads.”

Subscriptions are a way you can 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 vice-versa. 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.

These can also be a tool to provide your listeners with more direct access to you as the host. For example, you could do Ask Me Anything (AMA) themed episodes where you answer listener questions about yourself, your guests, podcasting, or anything else. Listeners can see your subscriber-only episodes right on your Spotify show page, and listen directly through there—or any other listening platform through a private RSS feed—once they subscribe.

3. Automated Ads

The next option in podcast advertising is Automated ads. Automated ads are powered by  the Spotify Audience Network, Spotify’s podcast ad network that connects advertisers with millions of listeners. The advertisers create these ads that fill the ad breaks creators designate in the podcasts. This option is currently in a closed beta, but will be expanding over time

Whenever your time comes to run Automated Ads, this will be an attractive monetization channel that enables easy access to notable brands and organizations and allows creators to monetize at scale.

4. 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 Q&A or 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.  

5. Listener Support

Spotify for Podcasters' Listener Support feature is the easiest way to encourage fans to donate to your show, with no minimum listeners required for the creator. Listeners can choose from three monthly amounts to contribute with convenient automatic withdrawals. If you’re not prepared or ready to invest in creating bonus content for a Podcast Subscription, Listener Support is a low maintenance option that doesn’t require gating any of your episodes.

Don’t hesitate to make this option known to your audience and ask for their support. Let them know this will help you invest in making your podcast the best it can be and deliver content they’ll love. Promote Listener Support in your episodes, on social media, in your email newsletter, and wherever else your listeners are.

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.”

Feeling inspired?