Monetizing Podcasts Is about Freedom of Choice; Ads Are a Smart Choice.

The Serial podcast’s astonishing popularity is incredibly impressive—and great for the business of podcasting overall. Though we don’t represent the show, many of us here at Midroll are big fans. The extra attention it’s bringing to podcasting at large is of course beneficial for the entire industry.

The success and popularity of Serial is bringing new attention not only to podcasting but to podcast advertising, thanks in part to their exceptional MailKimp, er, MailChimp ad reads. (Recent episodes have added podcast advertising stalwarts like Amazon and Squarespace into the mix.)

Serial’s accomplishments are many (and growing!). Apple says the show was the first iTunes podcast to hit 5 million total downloads. The show itself says it’s averaging more than 1.5 million downloads per episode now. Incredible!

Given how big a podcast Serial has become, and given how much financial success Midroll’s podcasts have seen from podcast advertising, we understand the surprise some folks expressed late last week when the show started a big fundraising effort. Here’s Ira Glass last Thursday on Twitter:

Should folks in the podcast industry be worried that one of the planet’s biggest podcasts says sponsorship dollars aren’t enough to support it?

In a word: No. Serial’s community fundraising speaks plainly to the uniqueness of the podcast space. Podcasters are independent, and they choose what’s best for their shows.

For example, our podcasters tell us how many ads they want to include per episode, and what style of spots (pre-rolls, mid-rolls, post-rolls, etc). They tell us what rates they want to charge. And they tell us which advertisers they do and don’t want on their shows.

Thus, Serial’s decision to seek donations doesn’t mean that podcasts can’t make money from ad sales alone. It means that Serial’s producers don’t want to rely on advertising dollars alone. As an investigative, documentary-style show Serial has higher production costs than most podcasts. It also comes from the public radio world, where direct listener support is a bedrock of the diverse funding base. We respect the producers’ choice to turn to listeners, although we do believe a show of Serial’s caliber could be supported wholly by advertising, if the producers elected go that route.

At Midroll, we exclusively offer live host-reads. Our hosts read the ads on their shows at different points in the episodes. Serial currently offers pre-recorded reads in the front of the show, with post-roll host-reads at the end of the episode. Those great “MailKimp” spots have been recycled at the start of each episode; our shows offer fresh reads each time. That’s not to say that Serial’s doing anything wrong; it’s clearly not. Rather, the show is simply making its own decisions about how it wants to make money.

Roman Mars has had tremendous success crowd-funding seasons of his hit show 99% Invisible on Kickstarter. Our owned and operated content networks—Earwolf and Wolfpop—also accept donations from listeners, supplementing the primary income from advertising.

Podcasting is a young industry, now experiencing an exciting explosion of growth and interest. We expect that new revenue streams will be developed, alongside further innovations in content and distribution.

Still, as we come to the close of the best quarter for ad sales in Midroll’s history, we’re unsurprisingly quite bullish on advertising as a massive revenue driver for podcasts. The key takeaway from Serial’s decision to seek donations for season two isn’t that podcast ads don’t work. It’s that podcasts (and podcasters) are mature enough to know that there are multiple revenue streams for the medium—and that those streams can flow together beautifully.

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