The Economics of Podcasting

First off, this post defines podcasting is an effective way to deliver highly niche audio to a very enthusiastic audience (the World English Bible translated into Klingon or Tips for Triathletes in the Southwestern US for example).

Secondly, the numbers used here are rough and make for easy math.

Let’s say you’re making one show a week for a year. Here’s a quick pass at some costs:

Monthly Server & Bandwidth costs ($40 * 12 months): $480
Production and editing effort per show ($200 * 52 shows): $10,400
Equipment Costs (mics, software, etc): $500

  • Beer, coffee, and other production/editing necessities per show ($20 * 52 shows): $1,040
  • Monthly Server & Bandwidth costs ($150 * 12 months): $1,800
  • Equipment Costs -mics, software, etc ($500 amoritized over 5 years): $100

Let’s say we’d like to gross $40,000 for the year (a fair amount for doing only one show a week).

Adding all this up puts your annual costs at $42,940.

For the sake of easy math, let’s say you have 1,000 listeners – the circulation of a small town Nebraskan newspaper like the Bayard Transcript. Frankly, the worldwide audience for a Klingon version of the Bible is probably a thousand.

Dividing the annual cost ($42,940) by the number of listeners (1,000) and the number of shows (52) makes the cost per listener: $0.8258

That’s less than a $1 per show per listener (iTunes – 99 cents, WalMart – 88 cents, coincidence?). One Dollar. $4 a month. $42.94 a year. Kris over at the Croncast settled on nearly the same numbers.

With numbers as small as these, I don’t see advertisers beating down the doors of podcasters. In the broadcast world, millions of dollars are sunk into spectrum, hardware, and talent. This gives advertisers the upper hand.

Early on, Heineken realized it was easier to start their own podcast than enter into an advertising agreement with the Rock ‘n Roll Geek Show. I agree. The economics of podcasting make it far more attractive to start your own thing than shoehorn in an awkward ad subsidized model.

If we go back to the original podcasting is best with niche audio assumption, there’s a point where the “ad message” is as valuable to the listener as the “show message”. One degreee further and the podcast is produced by the “advertiser” as part of their marketing campaign.

That’s far more interesting.

If your favorite podcaster has a tip jar (Croncast, IT Conversations, Evil Genius Chronicles) I encourage you to give them a dollar for every show you’ve enjoyed.

Micropayment pioneer Scott McCloud digs into this same issue in his I Can’t Stop Thinking comic.

If You’re a Guru, You Need a Podcast

There are a handful of vocations ideally positioned for connecting with customers on a regular basis via audio (podcasting):

  • Politicians
  • Motivational Speakers
  • Professional Consultants
  • Musicians
  • Poet, Author, or other Professional Writers

If your vocation is in that list, find a speech or presentation and hit record. Then send it to your most passionate customers. It’s an easy way to effect them on a different level than just text – more along the lines of a telephone conversation or a voicemail. At a most basic level, audio is better than text for addressing many people at once (that’s why we talk – Grooming, Gossip, and the Evolution of Language).

Despite your reservations, marketing guru Seth Godin, you should podcast. Whether or not you charge for it that’s an entirely different conversation.

RSS is Advertising, Not a Channel for Advertising

(originally published at MNteractive.com)

This afternoon, I was listening to an interview on RSS advertising. Overall, it sounded like Pheedo is shoehorning the dying interruption-based ad model into the relationship-based world of RSS.

There are a number of companies trying to make RSS measurement more accurate (Pheedo, Feedster, FeedBurner). This is excellent, RSS feeds are the way to connect with passionate, influential people on their terms. The more tools available to refine RSS feeds, the stronger the relationship.

The problem is, “the RSS feed is itself an ad.”. Putting an ad in a feed is like putting an ad within a 30 second spot. Like Crest buying product-placement within a Coke ad. That doesn’t make sense.

Instead of advertising within another feed, I recommend companies publish their own feed, start their own relationships with customers – directly. Stop being parasites. New product announcements, press releases, customer research inquiries, and promotions are all useful, valuable items to publish in a feed.

If a company publishes a feed and no one subscribes, is the company relevant to the marketplace?

Blogging for Business

(originally published at MNteractive.com)

Jim Cuene noticed Forrester has finally followed Jupiter Research into using weblogs to increase their analysts’ reputations and GoogleJuice.

I agree with 2.5 of Jim’s 3 suggestions for both Forrester and Jupiter. ‘Go out on a Limb’ and ‘Allow Comments’, both of these reinforce the ‘your readers know more than you’ notion. This notion builds a community around a weblog. Not only will the comments solidify the analyst’s findings, they could become an inexpensive recruiting tool.

In addition to commenting, I’d like to see these research firms offer TrackBacks. Whereas comments are internal to the weblog, TrackBacks are external and a very quantitative way to measure how much buzz a specific story has generated.

Oh, and Forrester, don’t forget the RSS feeds. Jupiter already offers them for each of their analysts.

Which brings me to the 1/2 point I disagree with Jim on. As far back as I can remember, Jupiter and Forrester made their money by selling research. I don’t see any reason for that to change. Just as I see RSS feeds as the compact disc for the 21st century, I think these research firms could charge for access to their blogs. These blogs would be their customer’s semi-private research channel, containing everything they publish on the topics purchased with special, semi-exclusive, in-depth coverage.

The real value in both these firms have is their customer list. With private blogs and commenting, Forrestor and Jupiter are in an amazing position to leverage Metcalf’s Law. How much would you pay to hear your major competitor’s reaction to the latest Jupiter report?

These research firms’ job is to start a smart conversation, for the real value is where the conversation goes. The question they need to ask themselves is: Are they in the newspaper business or the fish-wrap business?.

Elsewhere:
Jupiter’s thoughts on the benefits of half-using a weblog

“You should be fired if you do a marketing site without an RSS feed.”

(originally published at MNteractive.com)

What the internet does really, really well is connect things through hyperlinks. The outcome of hyperlinks is connecting people. When people are connected, there’s a relationship.

Websites are an excellent marketing tool. Like any tool, they need to be used correctly. To do so, they need to build a relationship between the company and it’s customers.

This is a nice way to say what Microsoft’s resident weblogger Robert Scoble said:

“You should be fired if you do a marketing site without an RSS feed.”

Why are weblogs addictive and marketing sites not? Authenticity, reality. and relationships.

It still surprises me how many websites aren’t weblogs. There are mechanisms with most weblog systems you get the following for free:

  • Easy to maintain content management system
  • RSS feeds
  • Categories and sections
  • Searching
  • Permalinks
  • Commenting systems
  • and they’re Google-friendly

This means, these things don’t need to be build from scratch and it’s a fertile ground to build a relationship with customers.

Maybe like the old Tootsie Roll commercial, everything looks like a weblog to me. Then again, maybe weblogs are the most mature, effective mechanism to communicate news quickly to everyone that cares.

UPDATE: Dave Winer says not having RSS is like not having business cards. I completely agree. Considering the high percentage of my correspondance is through email, I’m frequently well into a working relationship before there’s an opportunity to exchange business cards.

The first thing I do before I meet someone, Google them. If a website with an RSS feed doesn’t come up, or worse – they can’t be found – I always hesitate.

Stowe Boyd over at Cornate’s Get Real blog, confirms my hesitation in his More Egosurfing post:

“…Google Juice is about people ‘voting’ on your relevance to the issues you have decided to wrestle with, and represents the degree to which you’d be missed if you stopped blogging.”

“…as an indicator of the karma that bloggers have built up, by crafting posts that make people think, link, and comment, Google Juice means something important.”