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Computers and Technology

What is Podcast and How do Podcast Make Money?

What is a podcast?


According to the latest studies, about 64% of Americans know the answer that what is podcast, and if you’re one of the 124 million Americans that’s listened to one, you’ll know it’s just an excellent word for a pre-recorded audio series distributed over the internet.


The term itself was invented by a BBC News reporter by joining the words “iPod” and “broadcast”. And the 1st podcasting apps came to smartphones in 2005. Later that same year, the most famous podcast was getting over 4.5 million downloads.


And by 2014, the top podcast would get the exact amount of downloads in half the time and that sort of growth is much indicative of the industry itself. It took podcasts eight years to reach one billion total downloads and within five years, that number has gone from one to fifty billion. There are more than half a million podcasts out there.


And the most profitable among them can make $70,000 or more an episode off ads. But in reality, only a small number of podcasts channels are lucky enough to make any money at all.


How does Podcast Make Money?

But who is making money in podcasting?


The answer’s more complex than it seems. 


Podcasts themselves make money the exact way all media does. 


They sell ads.


Those ads are sold on a CPM (or cost per thousand) basis and the industry-standard seems to be between $20 and $50 per thousand listeners. Even at that comparatively low cost, advertisers still only put $316 million into podcasts in 2017.


Which is tiny compared to the 17 billion dollars spent on the radio or the 68 billion dollars spent on T.V. But the figures are all relevant. Because while broadcasting Television and radio is expensive…distributing audio files on the internet is actually free.


Podcasts are free to host, free to post, and, in most cases, they’re free to listen to. But they are never free to make. Because regardless of what kind of podcast you are making – you’re going to need a microphone for the podcast.



And microphones are not cheap. That’s why there’s a bunch of audio companies that jumped up to around the same time podcasting did. And they have done amazingly well for themselves. Sales of the most popular USB microphone, grew by 89 percent in the last three years making 55 million dollars in 2017.


And they are not the only ones taking benefit of the trend. The microphone industry, as a whole, is reached 1.8 billion dollars in 2020. And the cost of a microphone is just the smallest buy-in for podcasters who want to produce their show.


But many people getting into podcasting don’t have the technical knowledge that how to make one themselves. And that’s extremely beneficial to 2 other kinds of businesses. 


First is recording studios – which usually rent by the hour and allow you to produce a high-quality podcast without the upfront cost of buying all the equipment or hiring the engineers to pull it off.

And that industry has seen an increment of more than 100 million dollars in the last three years.


And then some companies specialize in podcast production. They’re committed entirely to making high-quality podcasts for other people or companies and basically, every large name or branded podcast uses one.


Which has opened up a whole new road of advertising, where a company can become the content rather of the ad. This brings in money to both the company that pays for the podcast and the company that makes it. There are a lot more podcasting apps that improve the listening experience in many ways and there are a lot of developers on the internet making money from creating them.


On the creator end, there are some programs that allow users to easily monetize their podcasts with intuitive ad placements. Which makes it incredibly simple for podcasts with an audience to start making money from ads.


So podcasting is becoming a way to make a living for both podcasters and their followers. The world of podcasting and podcast platforms is always growing. This is great because the further big companies invest in these platforms the more chance it is for people to become career podcasters.


And that matters. Because podcasting, at its core, is about sharing. Sharing passions and skills, whether that skill is making hardware, software, products, or podcasts. And it’s about sharing ideas, conversations, and stories. And, in some little way, about sharing profits.


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