Making money from Podcasts.
There’s an interesting video of Jason Calacanis of Weblogs Inc talking about models for making money out of podcasts. He spends most of the 12 mintues rubbishing various business models, especially the idea that just anyone can become the Yahoo! or Google or eBay of podcasts. He sees huge potential in a video/audio market place, if anyone can crack it technically (he doesn’t seem to have heard that eBay have just spent $3 billion on Skype).
This is a subject which naturally we are interested in, having just launched our own podcast site, Storynory.
Calacanis holds forth that podcasting is a great business model if you combine it with something else, like a blog. We definitely agree with that. Our model depends on mums and dads coming back to the site. That’s partly why we are writing reviews there.
He also says that the money follows the talent. The “star” holds a great deal of power, and can command a high fee with the threat of moving shows or setting up on their own (like Oprah). I don’t think Bertie the Frog is going to up and leave our children’s site yet. I do hope that our main story-teller, Natasha, becomes a star. When she is too busy playing in blockbusters (or perhaps at the National Theatre), we will still have the archive of her reading Bertie’s stories.
Our business model for podcasting is all about building up a classic library that should be even more valuable tomorrow than it is today. We think it’s not worth the effort to put something out for here and now, and besides, that doesn’t play to the strength of podcasting which is that you can listen to it any time.
Of course we want sponsorship, but we do face some dilemmas about this. Joel Cere kindly called on advertisers to get in early with “non-intrusive” advertising on Storynory, and followed up with another post today that gives us hope: Mommycast, a podcast for mommies everywhere, has found a sponsor. Adrian Pegg (who is one of the organisers of Podcastcon) predicts Storynory will be a major podcast revenue generator by this time next year, (thanks Adrian, I hope you are right), but he tells me that he would want to know if there are any commercial messages in our stories before he lets his children listen to them.
I think we could meet that concern. We could say in each post if there is a sponsor, and who that sponsor is. I expect the sponsor would see it as an extra plug. But even then, we wouldn’t really want the sponsorship to get in the way of the story. And besides, it’s the adult, not the child, who is going to buy the toy/book/holiday/DVD. There’s pester power, of course… but that’s controversial too. The whole kids’ advertising thing is very sensitive and we will have to tread carefully.
There are particular problems with the law in the USA. You can’t collect data, including email addresses, from children under 13 without the VERIFIABLE consent of the parent or guardian. This is a big hurdle to jump. We PROBABLY aren’t covered by US law, but we don’t want to find out the hard way, still less, put off American sponsors and advertisers or offend American tastes. This means we have to be careful about building up a community of listeners, at least in the short term, until we have more resources at our disposal.
So we come back to two of Jason’s revenue models. One is the podcast+ blog + advertising. The other is the “talent”. We make podcasts. If you want a good podcast, not a crap one, hire us!
(An acknowledgement due to problogger where I saw the link to the video, but I see few comments on his post as yet, suggesting that there’s not a huge interest in making money out of podcasts in the problogging community).